Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 06, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | QTS Realty Trust, Inc. | |
Entity Central Index Key | 1,577,368 | |
Entity Filer Category | Accelerated Filer | |
Current Fiscal Year End Date | --12-31 | |
Qualitytech, LP [Member] | ||
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | QualityTech, LP | |
Entity Central Index Key | 1,561,164 | |
Entity Filer Category | Non-accelerated Filer | |
Current Fiscal Year End Date | --12-31 | |
Common Class A [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 40,825,412 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 133,000 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Real Estate Assets | ||
Land | $ 52,430 | $ 48,577 |
Buildings and improvements | 1,073,120 | 914,286 |
Less: Accumulated depreciation | (205,284) | (180,167) |
Total real estate assets | 920,266 | 782,696 |
Construction in progress | 320,885 | 214,719 |
Real Estate Assets, net | 1,241,151 | 997,415 |
Cash and cash equivalents | 10,744 | 10,788 |
Rents and other receivables, net | 30,548 | 15,579 |
Acquired intangibles, net | 122,005 | 18,000 |
Deferred costs, net | 38,013 | 37,058 |
Prepaid expenses | 7,132 | 3,079 |
Goodwill | 173,237 | |
Other assets, net | 29,198 | 24,640 |
TOTAL ASSETS | 1,652,028 | 1,106,559 |
LIABILITIES | ||
Mortgage notes payable | 70,000 | 86,600 |
Unsecured credit facility | 330,000 | 239,838 |
Senior notes, net of discount | 297,852 | 297,729 |
Capital lease and lease financing obligations | 56,211 | 13,062 |
Accounts payable and accrued liabilities | 92,708 | 64,607 |
Dividends and distributions payable | 15,322 | 10,705 |
Advance rents, security deposits and other liabilities | 19,444 | 3,302 |
Deferred income taxes | 16,449 | |
Deferred income | 19,557 | 10,531 |
TOTAL LIABILITIES | 917,543 | 726,374 |
EQUITY | ||
Common stock, $0.01 par value, 450,133,000 shares authorized, 40,881,002 and 29,408,138 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | 409 | 294 |
Additional paid-in capital | 664,751 | 324,917 |
Accumulated dividends in excess of earnings | (38,014) | (22,503) |
Total stockholders' equity | 627,146 | 302,708 |
Noncontrolling interests | 107,339 | 77,477 |
TOTAL EQUITY | 734,485 | 380,185 |
TOTAL LIABILITIES AND EQUITY | 1,652,028 | 1,106,559 |
Qualitytech, LP [Member] | ||
Real Estate Assets | ||
Land | 52,430 | 48,577 |
Buildings and improvements | 1,073,120 | 914,286 |
Less: Accumulated depreciation | (205,284) | (180,167) |
Total real estate assets | 920,266 | 782,696 |
Construction in progress | 320,885 | 214,719 |
Real Estate Assets, net | 1,241,151 | 997,415 |
Cash and cash equivalents | 10,744 | 10,788 |
Rents and other receivables, net | 30,548 | 15,579 |
Acquired intangibles, net | 122,005 | 18,000 |
Deferred costs, net | 38,013 | 37,058 |
Prepaid expenses | 7,132 | 3,079 |
Goodwill | 173,237 | |
Other assets, net | 29,198 | 24,640 |
TOTAL ASSETS | 1,652,028 | 1,106,559 |
LIABILITIES | ||
Mortgage notes payable | 70,000 | 86,600 |
Unsecured credit facility | 330,000 | 239,838 |
Senior notes, net of discount | 297,852 | 297,729 |
Capital lease and lease financing obligations | 56,211 | 13,062 |
Accounts payable and accrued liabilities | 92,708 | 64,607 |
Dividends and distributions payable | 15,322 | 10,705 |
Advance rents, security deposits and other liabilities | 19,444 | 3,302 |
Deferred income taxes | 16,449 | |
Deferred income | 19,557 | 10,531 |
TOTAL LIABILITIES | 917,543 | 726,374 |
EQUITY | ||
Partners' capital | 734,485 | 380,185 |
TOTAL LIABILITIES AND EQUITY | $ 1,652,028 | $ 1,106,559 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 450,133,000 | 450,133,000 |
Common stock, shares issued | 40,881,002 | 29,408,138 |
Common stock, shares outstanding | 40,881,002 | 29,408,138 |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Revenues: | |||||
Rental | $ 52,193 | $ 41,966 | $ 101,526 | $ 82,545 | |
Recoveries from customers | 5,582 | 3,852 | 11,246 | 7,543 | |
Cloud and managed services | 8,220 | 4,970 | 14,015 | 9,201 | |
Other | 2,122 | 550 | 2,716 | 992 | |
Total revenues | 68,117 | 51,338 | 129,503 | 100,281 | |
Operating Expenses: | |||||
Property operating costs | 22,031 | 16,529 | 41,367 | 32,752 | |
Real estate taxes and insurance | 1,474 | 1,118 | 2,959 | 2,336 | |
Depreciation and amortization | 18,062 | 13,817 | 34,305 | 27,064 | |
General and administrative | 14,615 | 11,473 | 28,453 | 22,251 | |
Restructuring | 1,046 | 1,046 | |||
Transaction and integration costs | 4,669 | 1,089 | 4,774 | 1,153 | |
Total operating expenses | 60,851 | 45,072 | 111,858 | 86,602 | |
Operating income | 7,266 | 6,266 | 17,645 | 13,679 | |
Other income and expenses: | |||||
Interest income | 1 | 1 | 8 | ||
Interest expense | (4,799) | (2,208) | (10,141) | (4,273) | |
Other (expense) income, net | (83) | (110) | (83) | (110) | |
Income before taxes | 2,385 | 3,948 | 7,422 | 9,304 | |
Tax benefit (expense) of taxable REIT subsidiaries | 3,135 | (27) | 3,135 | (55) | |
Net income | 5,520 | 3,921 | 10,557 | 9,249 | |
Net income attributable to noncontrolling interests | (888) | (831) | (1,843) | (1,961) | |
Net income | 4,632 | 3,090 | 8,714 | 7,288 | |
Unrealized gain on swap | 127 | 232 | |||
Comprehensive income | $ 4,632 | $ 3,217 | $ 8,714 | $ 7,520 | |
Net income per share attributable to common shares: | |||||
Basic | $ 0.13 | $ 0.11 | $ 0.26 | $ 0.25 | |
Diluted | $ 0.12 | $ 0.11 | $ 0.25 | $ 0.25 | |
Weighted average common shares outstanding: | |||||
Basic | 36,668,755 | 29,016,774 | 33,996,467 | 29,001,374 | |
Diluted | [1] | 44,444,104 | 37,009,746 | 41,867,944 | 36,934,210 |
Qualitytech, LP [Member] | |||||
Revenues: | |||||
Rental | $ 52,193 | $ 41,966 | $ 101,526 | $ 82,545 | |
Recoveries from customers | 5,582 | 3,852 | 11,246 | 7,543 | |
Cloud and managed services | 8,220 | 4,970 | 14,015 | 9,201 | |
Other | 2,122 | 550 | 2,716 | 992 | |
Total revenues | 68,117 | 51,338 | 129,503 | 100,281 | |
Operating Expenses: | |||||
Property operating costs | 22,031 | 16,529 | 41,367 | 32,752 | |
Real estate taxes and insurance | 1,474 | 1,118 | 2,959 | 2,336 | |
Depreciation and amortization | 18,062 | 13,817 | 34,305 | 27,064 | |
General and administrative | 14,615 | 11,473 | $ 28,453 | 22,251 | |
Restructuring | 1,046 | 1,046 | |||
Transaction and integration costs | 4,669 | 1,089 | $ 4,774 | 1,153 | |
Total operating expenses | 60,851 | 45,072 | 111,858 | 86,602 | |
Operating income | 7,266 | 6,266 | 17,645 | 13,679 | |
Other income and expenses: | |||||
Interest income | 1 | 1 | 8 | ||
Interest expense | (4,799) | (2,208) | (10,141) | (4,273) | |
Other (expense) income, net | (83) | (110) | (83) | (110) | |
Income before taxes | 2,385 | 3,948 | 7,422 | 9,304 | |
Tax benefit (expense) of taxable REIT subsidiaries | 3,135 | (27) | 3,135 | (55) | |
Net income | 5,520 | 3,921 | 10,557 | 9,249 | |
Unrealized gain on swap | 127 | 232 | |||
Comprehensive income | $ 5,520 | $ 4,048 | $ 10,557 | $ 9,481 | |
[1] | Includes 7,063 Class A and Class RS units, 492 "in the money" value of Class O units on an "as if" converted basis and 220 "in the money" value of options to purchase shares of Class A common stock on an "as if" converted basis as of the three months ended June 30, 2015, and 7,189 Class A and Class RS units, 464 "in the money" value of Class O units on an "as if" converted basis and 218 "in the money" value of options to purchase shares of Class A common stock on an "as if" converted basis as of the six months ended June 30, 2015. As of the three months ended June 30, 2014, this amount included 7,797 Class A and Class RS units, 89 "in the money" value of Class O units on as "as if" converted basis and 107 "in the money" value options to purchase shares of Class A common stock on an "as if" converted basis, and as of the six months ended June 30, 2014, this amount included 7,797 Class A and Class RS units, 57 "in the money" value of Class O units on an "as if" converted basis and 79 "in the money" value options to purchase shares of Class A common stock on as "as if" converted basis. |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) - 6 months ended Jun. 30, 2015 - USD ($) shares in Thousands, $ in Thousands | Qualitytech, LP [Member]Partnership Units [Member]General Partner [Member] | Qualitytech, LP [Member]Partnership Units [Member]Limited Partner [Member] | Qualitytech, LP [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Dividends in Excess of Earnings [Member] | Total stockholders' Equity [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance at Dec. 31, 2014 | $ 294 | $ 324,917 | $ (22,503) | $ 302,708 | $ 77,477 | $ 380,185 | |||
Beginning balance at Dec. 31, 2014 | $ 380,185 | $ 380,185 | |||||||
Beginning balance, shares at Dec. 31, 2014 | 29,408 | ||||||||
Beginning balance, shares at Dec. 31, 2014 | 1 | 36,935 | |||||||
Issuance of shares through equity award plan | $ 2 | (2) | |||||||
Issuance of shares through equity award plan, shares | 193 | 193 | |||||||
Net proceeds from equity offering | $ 369,309 | $ 369,309 | $ 108 | 331,050 | 331,158 | 38,151 | 369,309 | ||
Net proceeds from equity offering, shares | 10,750 | 10,750 | |||||||
Reclassification of noncontrolling interest to APIC upon conversion of partnership units to common stock | $ 5 | 6,196 | 6,201 | (6,201) | |||||
Reclassification of noncontrolling interest to APIC upon conversion of partnership units to common stock, shares | 530 | ||||||||
Equity-based compensation expense | $ 3,138 | 3,138 | 2,590 | 2,590 | 548 | 3,138 | |||
Dividend to shareholders | (24,225) | (24,225) | (24,225) | (24,225) | (24,225) | ||||
Distribution to noncontrolling interests | (4,479) | (4,479) | |||||||
Partnership distribution | (4,479) | (4,479) | |||||||
Net income | 10,557 | 10,557 | 8,714 | 8,714 | 1,843 | 10,557 | |||
Ending balance at Jun. 30, 2015 | $ 409 | $ 664,751 | $ (38,014) | $ 627,146 | $ 107,339 | $ 734,485 | |||
Ending balance at Jun. 30, 2015 | $ 734,485 | $ 734,485 | |||||||
Ending balance, shares at Jun. 30, 2015 | 40,881 | ||||||||
Ending balance, shares at Jun. 30, 2015 | 1 | 47,878 |
STATEMENTS OF CASH FLOW (UNAUDI
STATEMENTS OF CASH FLOW (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flow from operating activities: | ||
Net income | $ 10,557 | $ 9,249 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 33,475 | 25,668 |
Amortization of deferred loan costs | 1,585 | 1,314 |
Amortization of senior notes discount | 123 | |
Equity-based compensation expense | 3,138 | 1,976 |
Bad debt expense | 366 | 269 |
Write off of deferred loan costs | 83 | 110 |
Deferred tax benefit | (3,135) | |
Changes in operating assets and liabilities | ||
Rents and other receivables, net | (1,556) | 1,592 |
Prepaid expenses | (2,760) | (2,501) |
Other assets | (326) | (252) |
Accounts payable and accrued liabilities | (1,823) | (7,996) |
Advance rents, security deposits and other liabilities | (454) | (64) |
Deferred income | 1,888 | 285 |
Net cash provided by operating activities | 41,161 | 29,650 |
Cash flow from investing activities: | ||
Acquisitions, net of cash acquired | (288,865) | (73,300) |
Additions to property and equipment | (170,150) | (114,157) |
Cash used in investing activities | (459,015) | (187,457) |
Cash flow from financing activities: | ||
Credit facility proceeds | 350,162 | 182,500 |
Debt repayment | (260,000) | |
Payment of deferred financing costs | (512) | (924) |
Payment of cash dividend | (19,673) | (15,368) |
Distribution to noncontrolling interest | (4,414) | (4,654) |
Principal payments on capital lease obligation | (1,227) | (367) |
Scheduled mortgage principal debt repayments | (16,600) | (1,100) |
Equity proceeds, net of costs | 370,074 | |
Net cash provided by financing activities | 417,810 | 160,087 |
Net (decrease) increase in cash and cash equivalents | (44) | 2,279 |
Cash and cash equivalents, beginning of period | 10,788 | 5,210 |
Cash and cash equivalents, end of period | 10,744 | 7,489 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest (excluding deferred financing costs and amounts capitalized) | 8,866 | 2,973 |
Noncash investing and financing activities: | ||
Accrued capital additions | 56,366 | 32,638 |
Capital lease and lease financing obligations acquired | 43,832 | |
Qualitytech, LP [Member] | ||
Cash flow from operating activities: | ||
Net income | 10,557 | 9,249 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 33,475 | 25,668 |
Amortization of deferred loan costs | 1,585 | 1,314 |
Amortization of senior notes discount | 123 | |
Equity-based compensation expense | 3,138 | 1,976 |
Bad debt expense | 366 | 269 |
Write off of deferred loan costs | 83 | 110 |
Deferred tax benefit | (3,135) | |
Changes in operating assets and liabilities | ||
Rents and other receivables, net | (1,556) | 1,592 |
Prepaid expenses | (2,760) | (2,501) |
Other assets | (326) | (252) |
Accounts payable and accrued liabilities | (1,823) | (7,996) |
Advance rents, security deposits and other liabilities | (454) | (64) |
Deferred income | 1,888 | 285 |
Net cash provided by operating activities | 41,161 | 29,650 |
Cash flow from investing activities: | ||
Acquisitions, net of cash acquired | (288,865) | (73,300) |
Additions to property and equipment | (170,150) | (114,157) |
Cash used in investing activities | (459,015) | (187,457) |
Cash flow from financing activities: | ||
Credit facility proceeds | 350,162 | 182,500 |
Debt repayment | (260,000) | |
Payment of deferred financing costs | (512) | (924) |
Payment of cash dividend | (19,673) | (15,368) |
Partnership distributions | (4,414) | (4,654) |
Principal payments on capital lease obligation | (1,227) | (367) |
Scheduled mortgage principal debt repayments | (16,600) | $ (1,100) |
Equity proceeds, net of costs | 370,074 | |
Net cash provided by financing activities | 417,810 | $ 160,087 |
Net (decrease) increase in cash and cash equivalents | (44) | 2,279 |
Cash and cash equivalents, beginning of period | 10,788 | 5,210 |
Cash and cash equivalents, end of period | 10,744 | 7,489 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for interest (excluding deferred financing costs and amounts capitalized) | 8,866 | 2,973 |
Noncash investing and financing activities: | ||
Accrued capital additions | 56,366 | $ 32,638 |
Capital lease and lease financing obligations acquired | $ 43,832 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2015 | |
Description of Business [Abstract] | |
Description of Business | 1. Description of Business QTS Realty Trust, Inc. (“QTS”) through its controlling interest in QualityTech, LP (the “Operating Partnership” and collectively with QTS and their subsidiaries, the “Company”) and the subsidiaries of the Operating Partnership, is engaged in the business of owning, acquiring, redeveloping and managing multi-tenant data centers. The Company’s portfolio consists of 25 wholly-owned and leased properties with data centers located throughou t the United States, Canada, Europe and the Asia-Pacific region. QTS was formed as a Maryland corporation on May 17, 2013. On October 15, 2013, QTS completed its initial public offering of 14,087,500 shares of Class A common stock, $0.01 par value per share (the “IPO”), including shares issued pursuant to the underwriters’ option to purchase additional shares, which was exercised in full, and received net proceeds of approximately $279 million. QTS elected to be taxed as a real estate investment trust (“REIT”), for U.S. federal income tax purposes, commencing with its taxable year ended December 31, 2013. As a REIT, QTS generally is not required to pay federal corporate income taxes on its taxable income to the extent it is currently distributed to its stockholders. Concurrently with the completion of the IPO, the Company consummated a series of transactions, including the merger of General Atlantic REIT, Inc. with the Company, pursuant to which the Company became the sole general partner and majority owner of QualityTech, LP, the Operating Partnership. QTS contributed the net proceeds received from the IPO to the Operating Partnership in exchange for partnership units therein. As of June 30, 2015 , QTS owned approximately 85.4% of the interests in the Operating Partnership. Substantially all of QTS’ assets are held by, and QTS’ operations are conducted through, the Operating Partnership. QTS’ interest in the Operating Partnership entitles QTS to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to QTS’ percentage ownership. As the sole general partner of the Operating Partnership, QTS generally has the exclusive power under the partnership agreement to manage and conduct the Operating Partnership’s business and affairs, subject to certain limited approval and voting rights of the limited partners. QTS’ board of directors manages the Company’s business and affairs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation – The accompanying financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying financial statements are presented for both QTS Realty Trust, Inc. and QualityTech, LP. References to “QTS” mean QTS Realty Trust, Inc. and its controlled subsidiaries; and references to the “Operating Partnership” mean QualityTech, LP and its controlled subsidiaries. Management operates QTS and the Operating Partnership as one business. The management of QTS consists of the same employees as the management of the Operating Partnership. QTS is the sole general partner of the Operating Partnership, and i ts only material asset consists of its ownership interest in the Operating Partnership. QTS does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. QTS has not issued or guaranteed any indebtedness. Except for net proceeds from public equity issuances by QTS, which are contributed to the Operating Partnership in exchange for units of limited partnership interest of the Operating Partnership, the Operating Partnership generates all remaining capital required by the business through its operations, the direct or indirect incurrence of indebtedness, and the issuance of partnership units. A s general partner with control of the Operating Partnership, QTS consolidates the Operating Partnership for financial reporting purposes. The Company believes, therefore, that providing one set of notes for the financial statements of QTS and the Operating Partnership provides the following benefits: · enhances investors’ understanding of QTS and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; · eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both QTS and the Operating Partnership; and · creates time and cost efficiencies through the preparation of one set of notes instead of two separate sets of notes. In addition, in light of these combined notes, the Company believes it is important for investors to understand the few differences between QTS and the Operating Partnership in the context of how QTS and the Operating Partnership operate as a consolidated company. The presentation of stockholders’ equity and partners’ capital are the main areas of difference between the consolidated balance sheets of QTS and those of the Operating Partnership. The Operating Partnership’s capital includes general and limited common units that are owned by QTS and the other partners. QTS' stockholders’ equity includes common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. The primary difference in QTS' Statements of Operations and Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate share of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. These combined notes refer to actions or holdings as being actions or holdings of “the Company.” Although the Operating Partnership is generally the entity that enters into contracts, holds assets and issues debt, management believes that these general references to “the Company” in this context is appropriate because the business is one enterprise operated through the Operating Partnership. As discussed above, QTS owns no operating assets and has no operations independent of the Operating Partnership and its subsidiaries. Also, the Operating Partnership owns no operating assets and has no operations independent of its subsidiaries . Obligations under the 5.875% Senior Notes due 2022 and the unsecured credit facility, both discussed in Note 5, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries, other than QTS Finance Corporation, the co-issuer of the 5.875% Senior Notes due 2022 , and entities related to Carpathia Hosting, Inc. The indenture governing the 5.875% Senior Notes due 2022 restricts the ability of the Operating Partnership to make distributions to QTS, subject to certain exceptions, including distributions required in order for QTS to maintain its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended. The interim condensed consolidated financial statements of QTS Realty Trust, Inc. for the three and six months ended June 30, 2015 and 2014 , and as of June 30, 2015 and December 31, 2014 present the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries. This includes the operating results of the Operating Partnership for all periods presented. Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and deferred tax assets and the valuation of derivatives, real estate assets, acquired intangible assets and certain accruals. Principles of Consolidation – The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its majority-owned subsidiaries. The consolidated financial statements of QualityTech, LP include the accounts of QualityTech, LP and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in the financial statements. Real Estate Assets – Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful lives are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation is generally provided on a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred. For the three months ended June 30, 2015 , depreciation expense related to real estate assets and non-real estate assets was $12.4 million and $1.7 million, respectively, for a total of $14.1 million . For the three months ended June 30, 2014 , depreciation expense related to real estate assets and non-real estate assets was $9.1 million and $1.6 million, respectively , for a total of $10.7 million. For the six months ended June 30, 2015 , depreciation expense related to real estate assets and non-real estate assets was $23.3 million and $3.6 million, respectively, for a total of $26.9 million. For the six months ended June 30, 2014 , depreciation expense related to real estate assets and non-real estate assets was $17.9 million and $3.0 million, respectively, for a total of $20.9 million. The Company capitalizes certain development costs, including internal costs incurred in connection with development. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect costs) begins when development efforts commence and ends when the asset is ready for its intended use. Capitalization of such costs, excluding interest, aggregated to $2.6 million and $2.5 million for the three months ended June 30, 2015 and 2014 , respectively , an d $5.9 million and $4.7 million for the six months ended June 30, 2015 and 2014 , respectively. Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual development and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $2.4 million and $1.8 million for the three months ended June 30, 2015 and 2014 , respectively , and $ 4.4 million and $3.4 million for the six months ended June 30, 2015 and 2014 , respectively . Acquisitions – Acquisitions of real estate and other entities are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. Purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance with the accounting requirements of ASC 805, Business Combinations , which requires the recording of net assets of acquired businesses at fair value. The fair value of the consideration transferred is allocated to the acquired tangible assets, consisting primarily of land, building and improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases , value of customer relationships , trade names, software intangibles and capital leases . The excess of the fair value of liabilities assumed, common stock issued and cash paid over the fair value of identifiable assets acquired is allocated to goodwill, which is not amortized by the Company. In developing estimates of fair value of acquired assets and assumed liabilities, management analyzed a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets. Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in place lease costs totaled $0.5 million and $0.6 million for the three months ended June 30, 2015 and 2014 , respectively , and $0.9 million and $1.3 million for the six months ended June 30, 2015 and 2014 , respectively . This amortization expense is accounted for as real estate amortization expense. Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships totaled $0.6 million and $0.3 million for the three months ended June 30, 2015 and 2014 , respectively , and $0.9 million and $0.7 million for the six months ended June 30, 2015 and 2014 , respectively . This amortization expense is accounted for as real estate amortization expense. Other acquired intangible assets, which includes platform , above or below market leases, and trade name intangibles, are amortized on a straight-line basis over their respective expected lives. Platform and trade name intangibles are amortized as amortization expense, which totaled $0.2 million for the three and six months ended June 30, 2015. Above or below market leases are amortized as rent expense, which was immaterial for the three and six months ended June 30, 2015. There was no amortization expense related to platform and trade name intangibles for the three and six months ended June 30, 2014. The expense associated with above and below market leases is accounted for as real estate expense, whereas the expense associated with the amortization of platform and trade name intangibles is accounted for as non-real estate expense. See Note 3 for discussion of the preliminary pu rchase price allocation for the acquisition of Carpathia Hosting, Inc. on June 16, 2015, as well as the final purchase price allocation for the Princeton facility that the Company acquired on June 30, 2014. Impairment of Long-Lived and Intangible Assets – The Company reviews its long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is generally measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset exceeds the value of the undiscounted cash flows, the fair value of the asset is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value. No impairment losses were recorded for the three and six months ended June 30, 2015 and 2014 , respectively. As a result of the Carpathia acquisition in June 2015, the Company recognized approximately $173 million in goodwill. The fair value of goodwill is the consideration transferred which is not allocable to identifiable intangible and tangible assets. The Company believes that it has one reporting unit for goodwill purposes, thus will assess goodwill for impairment at least annually on that basis. Based on the initial purchase price allocation, the Company does not believe there is any immediate impairment that would need to be recognized in relation to goodwill. Cash and Cash Equivalents – The Company considers all demand deposits and money market accounts purchased with a maturity date of three months or less at the date of purchase to be cash equivalents. The Company’s account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is concentration of credit risk related to amounts on deposit in excess of FDIC coverage. The Company mitigates this risk by depositing a majority of its funds with several major financial institutions. The Company also has not experienced any losses and, therefore, does not believe that the risk is significant. Deferred Costs – Deferred costs, net, on the Company’s balance sheets include both financing costs and leasing costs. Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Amortization of the deferred financing costs was $0.8 million and $0.6 million for the three months ended June 30, 2015 and 2014 , respectively, and $1.6 million and $1.2 million for the six months ended June 30, 2015 and 2014 , respectively. During the three months ended June 30, 2015, the Company wrote off unamortized financing costs of $0.1 million in connection with the repayment of the Atlanta Metro equipment loan, as discussed in Note 5. During the three months ended June 30, 2014, the Company wrote off unamortized financing costs of $0.1 million in connection with the modification of its credit facility that is secured by the Richmond data center. Deferred financing costs, net of accumulated amortization are as follows: June 30, December 31, (dollars in thousands) 2015 2014 (unaudited) Deferred financing costs $ $ Accumulated amortization Deferred financing costs, net $ $ Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $2.8 million and $2.1 million for the three months ended June 30, 2015 and 2014 , respectively, and $5.5 million and $4.2 million for the six months ended June 30, 2015 and 2014 , respectively. Deferred leasing costs, net of accumulated amortization are as follows (excluding $2.9 million, net of amortization, related to a leasing arrangement at the Company’s Princeton facility in 2014): June 30, December 31, (dollars in thousands) 2015 2014 (unaudited) Deferred leasing costs $ $ Accumulated amortization Deferred leasing costs, net $ $ Advance Rents and Security Deposits – Advance rents, typically prepayment of the following month’s rent, consist of payments received from customers prior to the time they are earned and are recognized as revenue in subsequent periods when earned. Security deposits are collected from customers at the lease origination and are generally refunded to customers upon lease expiration. Deferred Income – Deferred income generally results from non-refundable charges paid by the customer at lease inception to prepare their space for occupancy. The Company records this initial payment, commonly referred to as set-up fees, as a deferred income liability which amortizes into rental revenue over the term of the related lease on a straight-line basis. Deferred income was $19.6 million and $10.5 million as of June 30, 2015 and December 31, 2014 , respectively. Additionally, $1.4 million and $1.2 million of deferred income was amortized into revenue for the three months ended June 30, 2015 and 2014 , respectively, and $2.7 million and $2.4 million for the six months ended June 30, 2015 and 2014 , respectively. Interest Rate Derivative Instruments – The Company utilizes derivatives to manage its interest rate exposure. During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which were cash flow hedges and qualified for hedge accounting. For these hedges, the effective portion of the change in fair value was recognized through other comprehensive income or loss. Amounts were reclassified out of other comprehensive income (loss) as the hedged item was recognized in earnings, either for ineffectiveness or for amounts paid relating to the hedge. The Company reflected all changes in the fair value of the swaps in other comprehensive income (loss) during the three and six months ended June 30 , 2014, as there was no ineffectiveness recorded in that period. The Company had no interest ra te swaps outstanding at June 30 , 2015 and December 31, 2014. Equity-based Compensation – All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification. Equity-based compensation expense net of forfeited and repurchased awards was $1.8 million and $1.1 million for the three months ended June 30, 2015 and 2014 , respectively, and $ 3.1 million and $ 2.0 million for the six months ended June 30, 2015 and 2014 , respectively. Rental Revenue – The Company, as a lessor, has retained substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. The amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net was $5.8 million and $4.0 million as of June 30, 2015 and December 31, 2014 , respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above. Cloud and Managed Services Revenue – The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. Allowance for Uncollectible Accounts Receivable – Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $5.2 million and $3.7 million as of June 30, 2015 and December 31, 2014 , respectively. Capital Leases and Lease Financing Obligations – The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease in accordance with U.S GAAP. The Company periodically enters into capital leases for certain equipment. In addition, through its acquisition of Carpathia Hosting, Inc. (“Carpathia”) on June 16, 2015, the Company is now party to capital leases for property and equipment, as well as financing obligations related to a sale-leaseback transaction. The outstanding liabilities for the capital leases were $32.3 million and $13.1 million as of June 30, 2015 and December 31, 2014 , respectively. The outstanding liabilities for the lease financing obligations were $ 23.9 million as of June 30, 2015 . The value of the assets associated with these leases approximates the outstanding obligations as of June 30, 2015 and December 31, 2014 , respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operation s and Comprehensive Income . See Note 3 for further discussion of the acquisition of Carpathia and Note 5 for further discussion of capital leases and lease financing obligations. Recoveries from Customers – Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Income in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues. Segment Information – The Company manages its business as one operating segment and thus one reportable segment consisting of a portfolio of investments in data centers located in the United States , Canada, Europe and the Asia-Pacific region . Customer Concentrations – As of June 30, 2015 , one of the Company’s customers represented 7.3% of its total monthly rental revenue. No other customers exceeded 5% of total monthly rental revenue. As of June 30, 2015 , three of the Company’s customers exceeded 5% of total accounts recei vable. In aggregate, these three customers accounted for 36% of total accounts receivable. Two of thes e three customers individually exceeded 10% of total accounts receivable. Income Taxes – The Company elected for one of its existing subsidiaries to be taxed as a taxable REIT subsidiary pursuant to the REIT rules of the U.S. Internal Revenue Code. For the taxable REIT subsidiary, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. As of December 31, 2014, the taxable REIT subsidiary’s deferred tax assets were primarily the result of U.S. net operating loss carryforwards. A valuation allowance was recorded against its gross deferred tax asset balance as of December 31, 2014. As a result of the acquisition of Carpathia, the Company has determined that it is more likely than not that pre-existing deferred tax assets will be realized by the combined entity, and the valuation allowance should be eliminated. The change in the valuation allowance resulting from the change in circumstances is included in income, recognized in deferred income tax benefit in the three and sixth months ended June 30, 2015. Fair Value Measurements – ASC Topic 820, Fair V alue Measurements , emphasizes that fair-value is a market-based measurement, not an entity-specific measurement. Therefore, a fair-value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, a fair-value hierarchy is established that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the level in the fair-value hierarchy within which the entire fair-value measurement falls is based on the lowest level input that is significant to the fair-value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. As the Company’s previous interest rate swaps matured on September 28, 2014, there are no financial assets or liabilities measured at fair value on a recurring basis on the consolidated balance sheets as of June 30, 2015 and December 31, 2014 . New Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. The new guidance narrows the definition of discontinued operations to disposals that represent a strategic shift in operations and requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective for annual and interim reporting periods beginning on and after December 15, 2014. Early adoption is permitted. Adoption of this standard did not have any effect on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the current revenue recognition requirements in ASC 606, Revenue Recognition. Under this new guidance, entities should recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. This ASU also requires enhanced disclosures. In July 2015, the FASB finalized its decision to delay the effective date of t he amendments in this ASU by one year, and as such, they are effective for annual and interim periods b eginning after December 15, 2017. Early adoption is permitted ; however, entities are not permitted to adopt the standard earlier than December 15, 2016, the original effective date. Retrospective and modified retrospective application is allowed. The Company is currently assessing the i mpact of this standard on its consolidated financial s tatements. In April 2015, the FASB issued ASU 2015-03, “ Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs ”. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and not as a separate deferred charge. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. In June 2015, the Securities and Exchange Commission (“SEC”) stated that given the absence of authoritative guidance within this ASU for debt issuance costs related to revolving debt arrangements, the SEC staff would not object to an entity deferring and presenting such costs as an asset and subsequently amortizing them ratably over the term of the revolving debt arrangement. This announcement confirms that revolver arrangement costs are not within the scope of this ASU. The amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. The amendments are required to be applied on a retrospective basis, and upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. Adoption of this standard will affect the Company’s Consolidated Balance Sheets . |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2015 | |
Acquisitions [Abstract] | |
Acquisitions | 3. Acquisitions Carpathia Acquisition On June 16, 2015, the Company completed the acquisition of 100% of the outstanding stock of Carpathia Hosting, Inc. (“Carpathia”), a Virginia-based colocation, cloud and managed services provider for approximately $326 million (as defined in the purchase and sale agreement). Upon completion of this acquisition, the Company assumed all of the assets and liabilities of Carpathia Acquisition, Inc. Carpathia Acquisition, Inc. and its subsidiaries, including Carpathia, became indirect, wholly-owned subsidiaries of the Company. Carpathia is a p rovider of colocation, hybrid cloud and Infrastructure-as-a-Service (IaaS) servicing enterprise customers and federal agencies, with a customer base of approximately 230 customers as of June 16, 2015. Carpathia utilizes eight domestic data centers located in Dulles, Virginia; Phoenix, Arizona; San Jose, California; Harrisonburg, Virginia and Ashburn, Virginia; and five international data centers located in Toronto; Amsterdam; London; Hong Kong and Sydney. The Company accounted for this acquisition in accordance with ASC 805, Business Combinations , as a business combination. The preliminary purchase price allocation was based on an assessment of the fair value of the assets acquired and liabilities assumed , and excludes acquisition-related costs which in accordance with ASC 805 were expensed as inc urred. The Company is valuing the assets acquired and liabilities assumed using Level 3 inputs. The following table summarizes the consideration for the Carpathia acquisition and the preliminary allocation of the fair value of assets acquired and liabilities assumed at the acquisition date (in thousands). This allocation is subject to change pending the final valuation of these assets and liabilities: June 16, 2015 Land $ 1,130 Buildings and improvements Construction in process Acquired intangibles, net Net working capital Total identifiable assets acquired Capital lease and lease financing obligations Deferred income taxes Total liabilities assumed Net identifiable assets acquired Goodwill Net assets acquired $ 294,684 Goodwill recognized in the transaction relates primarily to anticipated operating synergies, Carpathia’s in-place workforce and access to Carpathia’s broader customer base. Based on the preliminary purchase price allocation, amortization expenses relative to the intangible assets acquired are expected to be approximately $5.9 million, $10.9 million, $10.9 million, $8.8 million and $6.6 million for the years ended December 31, 2015 through December 31, 2019, respectively. The following table represents the pro forma condensed consolidated statements of operations for the three-month periods ended June 30, 2015 and 2014, and for the six-month periods ended June 30, 2015 and 2014 (in thousands): (Unaudited) Pro Forma Condensed Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenue $ 90,984 $ 75,493 $ 174,309 $ 147,877 Net income $ 9,363 $ 4,804 $ 16,500 $ 8,766 These amounts have been calculated after applying the Company’s accounting policies, and give effect to the Carpathia acquisition, related issuance of equity and certain historical transactions as if they had occurred on January 1, 2014, including the acquisition of the Princeton, NJ facility discussed below, the issuance of $300 million of senior unsecured notes, the issuance of approximately $387 million of Class A common stock, the acquisition of the Chicago, IL facility and the modification of the unsecured credit facility and the credit facility secured by the Richmond Property resulting in decreased interest rates on both. The purchase price allocation for this acquisition has been prepared on a preliminary basis. Accordingly, the purchase accounting adjustments made in connection with the development of the unaudited pro forma consolidated statements of operations are preliminary and subject to change. The unaudited pro forma condensed consolidated financial information is for comparative purposes only and not necessarily indicative of what actual results of operations of the Company would have been had the transactions noted above been consummated on January 1, 2014, nor does it purport to represent the results of operations for future periods. Revenue and net income generated by Carpathia subsequent to the Company’s acquisition from June 16, 2015 to June 30, 2015 were $3.7 million and $0. 2 million, respectively . Princeton Acquisition On June 30, 2014 , the Company completed the acquisition of a data center facility in New Jersey (the “Princeton facility”), from McGraw Hill Financial, Inc., for an aggregate cost of approximately $73.3 million. This facility is located on approximately 194 acres and consists of approximately 560,000 gross square feet, including approximately 58,000 square feet of raised floor, and 12 MW of gross power. This acquisition was funded with a draw on the unsecured revolving credit facility. Concurrently with acquiring this data center the Company entered into a 10 year lease for the facility’s 58,000 square feet of raised floor with Atos, an international information technology services company headquartered in Bezos, France. The lease includes, at the option of Atos, the ability to renew for up to 15 years. The Company accounted for this acquisition in accordance with ASC 805, Business Combinations , as a business combination. The preliminary purchase price allocation was based on an assessment of the fair value of the assets acquired, and excludes acquisition-related costs which in accordance with ASC 805 were expensed as incurred. The Company acquired the Princeton facility on June 30, 2014. The Company valued the assets acquired using Level 3 inputs. In June 2015, the Company finalized the Princeton facility purchase price allocation. The following table summarizes the consideration for the Princeton facility and the final valuation of the fair value of assets acquired as of June 30, 2015 (in thousands): Princeton facility Weighted average useful life Buildings $ 32,126 40 Land N/A Acquired intangibles 13 Deferred costs 10 Other assets 10 Intangible liabilities 17 Total purchase price $ 73,300 |
Real Estate Assets and Construc
Real Estate Assets and Construction in Progress | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate Assets and Construction in Progress [Abstract] | |
Real Estate Assets and Construction in Progress | 4. Real Estate Assets and Construction in Progress The following is a summary of properties owned or leased by the Company as of June 30, 2015 and December 31, 2014 (in thousands): As of June 30, 2015 (unaudited): Property Location Land Buildings and Improvements Construction in Progress Total Cost Owned Properties Suwanee, Georgia (Atlanta-Suwanee) $ $ $ $ Atlanta, Georgia (Atlanta-Metro) Santa Clara, California* - Richmond, Virginia Sacramento, California Princeton, New Jersey Dallas-Fort Worth, Texas Chicago, Illinois - - Miami, Florida Lenexa, Kansas Wichita, Kansas - - Leased Properties Carpathia properties *** Jersey City, New Jersey - Overland Park, Kansas ** - $ $ $ $ * Owned facility subject to long-term ground sublease. ** This does not include the portion of the business that is used for QTS office space or other real estate not used by customers. *** Includes 13 facilities. All facilities are leased, including those subject to capital leases. As of December 31, 2014 : Property Location Land Buildings and Improvements Construction in Progress Total Cost Owned Properties Suwanee, Georgia (Atlanta-Suwanee) $ $ $ $ Atlanta, Georgia (Atlanta-Metro) Santa Clara, California* - Richmond, Virginia Sacramento, California Princeton, New Jersey Dallas-Fort Worth, Texas Chicago, Illinois - - Miami, Florida Lenexa, Kansas Wichita, Kansas - - Leased Properties Jersey City, New Jersey - Overland Park, Kansas ** - - $ $ $ $ _____________________________ * Owned facility subject to long-term ground sublease. ** This does not include the portion of the business that is used for QTS office space or other real estate not used by customers. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt [Abstract] | |
Debt | 5. Debt Below is a listing of the Company’s outstanding debt, including capital leases and lease financing obligations, as of June 30, 2015 and December 31, 2014 (in thousands): June 30, December 31, 2015 2014 (Unaudited) Unsecured Credit Facility $ $ Senior Notes, net of discount Richmond Credit Facility Atlanta-Metro Equipment Loan - Capital Lease and Lease Financing Obligations Total $ $ Credit Facilities, Senior Notes and Mortgage Notes Payable (a) Unsecured Credit Facility – On May 1, 2013 , the Company entered into a $575 million unsecured credit facility comprised of a five -year $225 million term loan and a four -year $350 million revolving credit facility with a one year extension, subject to satisfaction of certain conditions, and had the ability to expand the total credit facility by an additional $100 million subject to certain conditions set forth in the credit agreement. In July 2014 , the Company’s term loan was reduced by $75 million to $150 million in connection with the issuance of the Senior Notes. On December 17, 2014, the Company amended and restated its unsecured credit facility to provide for a $650 million unsecured credit facility comprised of a five -year $100 million term loan maturing December 17, 2019 and a four -year $550 million revolving credit facility maturing December 17, 2018 , with the option to extend one year until December 17, 2019 , subject to the satisfaction of certain conditions. The lenders under the unsecured credit facility may issue up to $30 million in letters of credit subject to the satisfaction of certain conditions. The total unsecured credit facility may be increased from the current capacity of $650 million to up to $850 million subject to certain conditions set forth in the credit agreement, including the consent of the administrative agent and obtaining necessary commitments. As of June 30, 2015 , borrowings under the unsecured credit facility consisted of $ 230.0 million outstanding under the revolving credit facility and $ 100.0 million outstanding under the term loan. The unsecured credit facility requires monthly interest payments and requires the Company to comply with various customary affirmative and negative covenants and quarterly financial covenant requirements relating to the debt service coverage ratio, fixed charge ratio, leverage ratio and tangible net worth and various other operational requirements. In connection with the unsecured credit facility, as of June 30, 2015 , the Company had an additional $2.5 million letter of credit outstanding. Amounts outstanding under the unsecured credit facility bear interest at a variable rate equal to, at the Company’s election, LIBOR or a base rate, plus a spread that will vary depending upon the Company’s leverage ratio. For revolving credit loans, the spread ranges from 1.70% to 2.25% for LIBOR loans and 0.70% to 1.25% for base rate loans. For term loans, the spread ranges from 1.65% to 2.20% for LIBOR loans and 0.65% to 1.20% for base rate loans. As of June 30, 2015 , the weighted average interest rate for amounts outstanding under the unsecured credit facility was 1.87% . (b) Senior Notes – On July 23, 2014 , the Operating Partnership and QTS Finance Corporation, a subsidiary of the Operating Partnership formed solely for the purpose of facilitating the offering of the notes described below (collectively, the “Issuers”), issued $300 million aggregate principal amount of 5.875% Senior Notes due 2022 (the “Senior Notes”). The Senior Notes have an interest rate of 5.875% per annum, were issued at a price equal to 99.211% of their face value and mature on August 1, 2022 . The proceeds from the offering were used to repay amounts outstanding under the unsecured credit facility, including $75 million outstanding under the term loan. The Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Operating Partnership’s existing subsidiaries (other than foreign subsidiaries , Carpathia related subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Issuers or any other subsidiary guarantor. The Company will not initially guarantee the Senior Notes and will not be required to guarantee the Senior Notes except under certain circumstances. The offering was conducted pursuant to Rule 144A of the Securities Act of 1933, as amended, and the Senior Notes were issued pursuant to an indenture, dated as of July 23, 2014, among the Operating Partnership, QTS Finance Corporation, the Company, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (the “Indenture”). On March 23, 2015, the SEC declared effective the Operating Partnership and QTS Finance Corporation’s registration statement on Form S-4 pursuant to which th e issuers exchanged the originally issued Senior Notes for $300 million of 5.875% Senior Notes due 2022 (the “Exchange Notes”) that are registered under the Securities Act of 1933, as amended. The exchange offer was completed on April 23, 2015, and all outstanding originally issued Senior Notes were tendered. The Exchange Notes did not provide the Company with any additional proceeds and satisfied its obligations under a registration rights agreement entered into in connection with the issuance of the Senior Notes. (c) Richmond Credit Facility – In December 2012, the Company entered into a credit facility secured by the Company’s Richmond data center (the “Richmond Credit Facility”). As of June 30, 2015 , the Richmond Credit Facility had capacity of $120 million and includes an accordion feature that allows the Company to increase the size of the credit facility up to $200 million. The Richmond Credit Facility matures June 30, 2019 . The Richmond Credit Facility requires the Company to comply with covenants similar to the unsecured credit facility. Amounts outstanding under the Richmond Credit Facility bear interest at a variable rate equal to, at the Company’s election, LIBOR or a base rate, plus a spread that will range, depending upon the Company’s leverage ratio, from 2.10% to 2.85% for LIBOR loans or 1.10% to 1.85% for base rate loans. As of June 30, 2015 , the interest rate for amounts outstanding under the Richmond Credit Facility was 2.29% . On December 17, 2014, the Company further amended the Richmond Credit Facility to, among other things, conform certain terms of the Richmond Credit Facility to the unsecured credit facility and allow two subsidiaries of the Operating Partnership that were parties to the Richmond Credit Facility to guarantee unsecured obligations of the Operating Partnership and its subsidiaries, including the unsecured credit facility and the Senior Notes. (d) Atlanta-Metro Equipment Loan – On April 9, 2010, the Company entered into a $25 million loan to finance equipment related to an expansion project at the Company’s Atlanta-Metro data center (the “Atlanta-Metro Equipment Loan ”). The loan originally required monthl y interest-only payments and subsequently required monthly interest and pr incipal payments. The loan bore interest at 6.85% and was scheduled to mature on June 1, 2020 . This debt was repaid in June 2015 when its prepayment penalties expired. The annual remaining principal payment requirements as of June 30, 2015 per the contractual maturities and excluding extension options, capital leases and lease financing obligations, are as follows (in thousands): 2015 $ - 2016 - 2017 - 2018 2019 Thereafter Total $ As of June 30, 2015 , the Company was in compliance with all of its covenants. Capital Leases The Company has historically entered into capital leases for certain equipment. In addition, through its acquisition of Carpathia on June 16, 2015, the Company acquired capital leases of both equipment and certain properties. Total outstanding liabilities for capital leases were $ 32.3 million as of June 30, 2015 , of which $19.6 million were assumed through the Carpathia acquisition, $19.2 million of which was related to the lease of real property. Carpathia had entered into capital lease arrangements for datacenter space under two lease agreements expiring in 2018 and 2019 at its Harrisonburg, Virginia and Ashburn, Virginia locations. Total recurring monthly payments range from approximately $0.2 million to $0.5 million during the terms of the leases, in addition to payments made for utilities. Depreciation related to the associated assets for the capital leases is included in depreciation and amortization expense in the Statements of Operation s and Comprehensive Income . Lease Financing Obligations Through the acquisition of Carpathia, the Company acquired lease financing obligations totaling $23.9 million at June 30, 2015 , of which $21.3 million related to a sale-leaseback transaction where Carpathia has continuing involvement. On December 23, 2011, Carpathia sold the shell of a building and the associated land to an unrelated third party. Carpathia leases the property back and is a party to an agreement with the same third party to construct a new building on the adjoining property for use as a data center. Carpathia is primarily responsible for financing the improvements and outfitting the building with the necessary equipment. The third party leases back the new building in stages to Carpathia as the various stages are completed. In accordance with ASC 840-40, Leases , Carpathia has continuing involvement with the related leased assets; therefore, the Company will continue to account for the existing building shell and the associated land as fixed assets and will capitalize the construction costs of the new building. The financing obligation related to the building and equipment was $19.6 million at June 30, 2015. In addition, due to Carpathia’s continuing involvement, it was required to defer a gain on the sale of the assets. The deferred gain was $1.7 million at June 30, 2015, and is also included in lease financing obligations. The financing obligation is reduced as rental payments are made on the existing build ing, which payments started in January 2012. Rental payments, which includ e amounts attributable to both principal and interest, increased to approximately $0.2 million per month in March 2013, which is when the newly constru cted building was inhabited by Carpathia. Depreciation expense on the related asset is included in depreciation and amortization expense in the Statements of Operation s and Comprehensive Income . The Company , through its acquisition of Carpathia, also has a lease financing agreement in conne ction with a $4.8 million tenant improv ement allowance on one of its data center lease agreements. The f inancing requires monthly payments of principal and interest of less than $0.1 million through February 2019 . The outstanding balance on the financing agreement was $2.6 million as of June 30, 2015 . Depreciation expense on the related leasehold improvements is included in depreciation and amortization expense in the Statements of Operation s and Comprehensive Income . The following table summarizes the Company’s combined future payment obligations, excluding interest, as of June 30, 2015 , on the capital leases and lease financing obligations above (in thousands): 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
Interest Rate Derivative Instru
Interest Rate Derivative Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Interest Rate Derivative Instruments [Abstract] | |
Interest Rate Derivative Instruments | 6. Interest Rate Derivative Instruments The Company entered into interest rate swap agreements with a notional amount of $150 million on February 8, 2012 , which were designated as cash flow hedges for hedge accounting, and matured on September 28, 2014 . For derivative instruments that are accounted for as hedges, the change in fair value for the effective portions of qualifying hedges is recorded through other comprehensive income (loss). The total amount of unrealized gains recorded in other comprehensive income (loss) for the six months ended June 30, 2014 was $0.2 million, with no unrealized gains or losses recorded for the six months ended June 30, 2015 . Interest expense related to payments on interest rate swaps for the three and six months ended June 30, 2014 was $0.2 million and $0.3 million, respectively , with no interest expense recorded for the three and six months ended June 30, 2015 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 7 . Commitments and Contingencies The Company is subject to various routine legal proceedings and other matters in the ordinary course of business. The Company does not currently have any litigation that would have a material adverse impact on the Company’s financial statements. |
Partners' Capital, Equity and I
Partners' Capital, Equity and Incentive Compensation Plans | 6 Months Ended |
Jun. 30, 2015 | |
Partners' Capital, Equity and Incentive Compensation Plans [Abstract] | |
Partners' Capital, Equity and Incentive Compensation Plans | 8 . Partners’ Capital, Equity and Incentive Compensation Plans QualityTech, LP QTS has the full power and authority to do all the things necessary to conduct the business of the Operating Partnership. As of June 30, 2015 , the Operating Partnership had three classes of limited partnership units outstanding: Class A units of limited partnership interest (“Class A units”), Class RS LTIP units of limited partnership interest (“Class RS units”) and Class O LTIP units of limited partnership units (“Class O units”). The Class A Units are redeemable at any time on or after one year following the later of November 1, 2013 (which is the beginning of the first full calendar month following the completion of the IPO) or the date of initial issuance. The Company may in its sole discretion elect to assume and satisfy the redemption amount with cash or its shares. Class RS units or Class O units were issued upon grants made under the QualityTech, LP 2010 Equity Incentive Plan (the “2010 Equity Incentive Plan”). Class RS units and Class O units may be subject to vesting and are pari passu with Class A units. Each Class RS unit and Class O unit is convertible into Class A units by the Operating Partnership at any time or by the holder at any time following full vesting (if such unit is subject to vesting) based on formulas contained in the partnership agreement. In addition, upon certain circumstances set forth in the partnership agreement, vested Class RS units automatically convert into Class A units of the Operating Partnership. QTS Realty Trust, Inc. In connection with its IPO, QTS issued Class A common stock and Class B common stock. Class B common stock entitles the holder to 50 votes per share and was issued to enable the Company’s Chief Executive Officer to exchange 2% of his Operating Partnership units so he may have a vote proportionate to his economic interest in the Company. Also in connection with its IPO, QTS adopted the QTS Realty Trust, Inc. 2013 Equity Incentive plan (the “2013 Equity Incentive Plan”), which authorized 1.75 million shares of Class A common stock to be issued under the plan, including options to purchase Class A common stock, restricted Class A common stock, Class O units, and Class RS units. In March 2015, the Board of Directors approved an amendment to the 2013 Equity Incentive Plan to, among other things, increase the number of shares available for issuance under the plan by 3,000,000 , subject to stockholder approval. The stockholders approved the amendment at the annual meeting of s tockholders held on May 4, 2015, increasing the total number of shares available for issuance under the 2013 Equity Incentive Plan to 4,750,000 . The following is a summary of award activity under the 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and related information for the six months ended June 30, 2015 : 2010 Equity Incentive Plan 2013 Equity Incentive Plan Number of Class O units Weighted average exercise price Weighted average fair value Number of Class RS units Weighted average grant date value Options Weighted average exercise price Weighted average fair value Restricted Stock Weighted average grant date value Outstanding at December 31, 2014 $ $ $ $ $ $ Granted — — — — — Exercised/Vested (2) — — Released from restriction (1) — — — — — — — — Cancelled/Expired (3) — — — — — Outstanding at June 30, 2015 $ $ $ $ $ $ (1) This represents Class RS units that upon vesting have converted to Operating Partnership units. (2) This represents the Class A common stock that has been released from restriction and which was not surrendered by the holder to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. (3) Includes 9,625 restricted Class A common stock surrendered by certain employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. The assumptions and fair values for restricted stock and options to purchase shares of Class A common stock granted for the six months ended June 30, 2015 are included in the following table on a per unit basis. Class O units and options to purchase shares of Class A common stock were valued using the Black-Scholes model. Three and Six Months Ended June 30, 2015 Fair value of restricted stock granted $35.81 - $37.64 Fair value of options granted $8.00 - $8.05 Expected term (years) 5.5 -6.1 Expected volatility Expected dividend yield 3.50 - 3.57% Expected risk-free interest rates 1.67 - 1.69% The following table summarizes information about awards outstanding as of June 30, 2015 . Operating Partnership Awards Outstanding Exercise prices Awards outstanding Weighted average remaining vesting period (years) Class RS Units $ - 2 Class O Units $ 20 -25 1 Total Operating Partnership awards outstanding QTS Realty Trust, Inc. Awards Outstanding Exercise prices Awards outstanding Weighted average remaining vesting period (years) Restricted stock $ - 3 Options to purchase Class A common stock $ 21 -36.54 1 Total QTS Realty Trust, Inc. awards outstanding All nonvested LTIP unit awards are valued as of the grant date and generally vest ratably over a defined service period. Certain nonvested LTIP unit awards vest on the earlier of achievement by the Company of various performance goals or specified dates in 2015 and 2016. As of June 30, 2015 there were 0.6 million, 0.1 million, 0.4 million and 0.4 million nonvested Class O units, Class RS units , restricted Class A common stock and options to purchase Class A common stock outstanding, respectively. As of June 30, 2015 the Company had $16.8 million of unrecognized equity-based compensation expense which will be recognized over the remaining vesting period of up to 4 years. The total intrinsic value of the awards outstanding at June 30, 2015 was $44.1 million. On January 7, 2014 , the Company paid its first and prorated dividend to common stockholders of $0.24 per common share and the Operating Partnership made a distribution to its partners of $0.24 per unit in an aggregate amount of $9.0 million. On April 8, 2014 , the Company paid its regular quarterly cash dividend of $0.29 per common share and the Operating Partnership made a distribution to its partners of $0.29 per unit in an aggregate amount of $10.7 million. Additionally, a distribution of approximately $200,000 was made to Class O LTIP holders during the three months ended June 30, 2014 to cover federal, state and local taxes on the allocated taxable income of the O LTIPs. On January 7, 2015, the Company paid its regular quarterly cash dividend of $0.29 per common share and the Operating Partnership made a distribution to its partners of $0.29 per unit in an aggregate amount of $10.7 million. On April 7, 2015 , the Company paid its regular quarterly cash dividend of $0.32 per common share and the Operating Partnership made a distribution to its partners of $0.32 per unit in an aggregate amount of $13.4 million. On March 2, 2015 , the Company issued 5,000,000 shares of QTS’ Class A common stock and GA QTS Interholdco, LLC, a selling stockholder and an affiliate of General Atlantic LLC, sold 4,350,000 shares of QTS’ Class A common stock at a price of $34.75 per share. The selling stockholder granted the underwriters a 30-day option to purchase an aggregate of up to an additional 1,402,500 shares of QTS’ Class A common stock at the public offering price, which the underwriters exercised. The Company used the net proceeds of approximately $166.4 million to repay amounts outstanding under its unsecured revolving credit facility. The Company did not receive any proceeds from the offering of share s by the selling stockholder. On June 5, 2015, the Company issued 5,750,000 shares of QTS’ Class A common stock and GA QTS Interholdco, LLC, a selling stockholder, sold 1,250,000 shares of QTS’ Class A common stock at a price of $37.00 per share. The selling stockholder granted the underwriters a 30-day option to purchase an aggregat e of up to an additional 1,050,000 shares of QTS’ Class A common stock at the public offering price, which the underwriters exercised. The Company used the net proceeds of approximately $203.7 million to fund a portion of the cash consideration payable by the Company in the Carpathia acquisition, and prior to such use, it used a portion of the net proceeds to repay amounts outstanding under its unsecured revolving credit facility and to pay off its Atlanta-Metro Equipment Loan . The Company did not receive any proceeds from the offering of share s by the selling stockholder. QTS Realty Trust, Inc. Employee Stock Purchase Plan In June 2015, the Company established the QTS Realty Trust, Inc. Employee Stock Purchase Plan (the “Plan”) to give eligible employees the opportunity to purchase, through payroll deductions, shares of the Company’s Class A common stock in the open market by an independent broker selected by the Company’s Board of Directors (the “Board”) or the plan’s administrator. Eligible employees include all employees of the Company and its majority-owned subsidiaries (excluding executives) who have been employed for at least thirty days and who perform at least thirty hours of service per week for the Company. The Plan will be effective July 1, 2015 and will be administered by the Board or by a committee of one or more persons appointed by the Board. The Company has reserved 250,000 shares for purchase under the Plan and has also agreed t o pay the brokerage commissions and fees associated with a Plan partic ipant's purchase of shares . An eligible employee may deduct a minimum of $40 per month and a maximum of $2,000 per month towards the purchase of shares. On June 17, 2015, the Company filed a registration statement on Form S-8 to register the 250,000 shares of the Company’s Class A common stock related to the Plan. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9 . Related Party Transactions The Company periodically executes transactions with entities affiliated with its Chairman and Chief Executive Officer. Such transactions include automobile, furniture and equipment purchases as well as building operating lease payments and receipts, and reimbursement for the use of a private aircraft service by the Company’s officers and directors. The transactions which occurred during the three and six months ended June 30, 2015 and 2014 are outlined below (in thousands): Three Months Ended Six Months Ended June 30, June 30, (dollars in thousands) 2015 2014 2015 2014 Tax, utility, insurance and other reimbursement $ $ $ $ Rent expense Capital assets acquired Total $ $ $ $ |
Noncontrolling Interest
Noncontrolling Interest | 6 Months Ended |
Jun. 30, 2015 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | 10 . Noncontrolling Interest Concurrently with the completion of the IPO, QTS consummated a series of transactions pursuant to which QTS became the sole general partner and majority owner of QualityTech, LP, which then became its operating partnership. The previous owners of QualityTech, LP retained 21.2% ownership of the Operating Partnership. Commencing at any time beginning November 1, 2014, at the election of the holders of the noncontrolling interest, the Class A units are redeemable for cash or, at the election of the Company, common stock of the Company on a one -for-one basis. During the first and second quarter s of 2015, approximately 230,000 and 300,000 Class A units , respectively, were redeemed for the Company’s Class A common stock. As a result, the noncontrolling ownership interest of QualityTech, LP, after taking into account the Class A units redeemed, the grant of equity awards and the issuance of 5,000,000 and 5,750,000 shar es of common stock in March and June 2015, respectively , was 14.6% at June 30, 2015 . |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings per Share [Abstract] | |
Earnings per Share | 11 . Earnings per share of QTS Realty Trust, Inc. Basic income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share adjusts basic income (loss) per share for the effects of potentially dilutive common shares. Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2015 2014 2015 2014 Net income available to common stockholders $ 4,632 $ 3,090 $ 8,714 $ 7,288 Weighted average shares outstanding—basic Net income per share—basic $ 0.13 $ 0.11 $ 0.26 $ 0.25 Net income $ 5,520 $ 3,921 $ 10,557 $ 9,249 Weighted average shares outstanding—diluted (1) Net income per share—diluted $ 0.12 $ 0.11 $ 0.25 $ 0.25 (1) Includes 7,063 Class A and Class RS units, 492 “in the money” value of Class O units on an “as if” converted basis and 220 “in the money” value of options to purchase shares of Class A common stock on an “as if” converted basis as of the three months ended June 30, 2015 , and 7,189 Class A and Class RS units, 464 “in the money” value of Class O units on an “as if” converted basis and 218 “in the money” value of options to purchase shares of Class A common stock on an “as if” converted basis as of the six months ended June 30, 2015 . As of the three months ended June 30, 2014 , this amount included 7,797 Class A and Class RS units, 89 “in the money” value of Class O units on as “as if” converted basis and 107 “in the money” value options to purchase shares of Class A common stock on an “as if” converted basis, and as of the six months ended June 30, 2014 , this amount included 7,797 Class A and Class RS units, 57 “in the money” value of Class O units on an “as if” converted basis and 79 “in the money” value options to purchase shares of Class A common stock on as “as if” converted basis. |
Customer Leases, as Lessor
Customer Leases, as Lessor | 6 Months Ended |
Jun. 30, 2015 | |
Customer Leases, as Lessor [Abstract] | |
Customer Leases, as Lessor | 12 . Customer Leases, as Lessor Future minimum lease payments to be received under non-cancelable operating customer leases ( inclusive of payments for contracts which have not yet commenced, and exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands): Period Ending December 31, 2015 (July - December) $ 2016 2017 2018 2019 Thereafter Total $ |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 13 . Fair Value of Financial Instruments ASC Topic 825 requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows based upon market yields or by using other valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, fair values are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value amounts. Short-term instruments: The carrying amounts of cash and cash equivalents and restricted cash approximate fair value. Credit facilities, Senior Notes and mortgage notes payable: The fair value of the Company’s floating rate mortgage loans was estimated using Level 2 “significant other observable inputs” such as available market information based on borrowing rates that the Company believes it could obtain with similar terms and maturities. The Company’s unsecured credit facility and Richmond Credit Facility did not have interest rates which were materially different than current market conditions and therefore, the fair value of each of the credit facilities approximated the carrying value of each note. The fair value of the Company’s Senior Notes was estimated using Level 2 “significant other observable inputs,” primarily based on quoted market prices for the same or similar issuances. At June 30, 2015 , the fair value of the Senior Notes was approximately $299.3 million. Other debt instruments: The fair value of the Company’s other debt instruments (including capital leases and lease financing obligations ) were estimated in the same manner as the credit facilities and mortgage notes payable above. Similarly, because each of these instruments did not have interest rates which were materially different than current market conditions and therefore, the fair value of each instrument approximated the respective carrying values. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 6 Months Ended |
Jun. 30, 2015 | |
Condensed Consolidating Financial Information [Abstract] | |
Condensed Consolidating Financial Information | 14. Condensed Consolidating Financial Information QualityTech, LP has no significant operations independent of its subsidiaries. Obligations under the Senior Notes are jointly and severally guaranteed by substantially all of our restricted subsidiaries, except for Carpathia Hosting, Inc. and its subsidiaries (the “Non-Guarantor Subsidiaries”). The tables below present condensed consolidating financial statements for QualityTech, LP and its subsidiaries that guarantee the Senior Notes (the “Guarantor Subsidiaries”), and the Non-Guarantor Subsidiaries as of June 30, 2015, and for the three and six months ended Ju ne 30, 2015. As there were no Non-G uarantor Subsidiaries as of December 31, 2014 or for the three and six months ended June 30, 2014, no condensed consolidating financial statements are presented for those respective periods or dates. The financial information may not necessarily be indicative of the results of operations, cash flows or financial position had the subsidiaries operated as independent entities. Interim Condensed Consolidating Balance Sheet June 30, 2015 (in thousands) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Real Estate Assets Land $ 51,300 $ 1,130 $ - $ 52,430 Buildings and improvements - Less: Accumulated depreciation - - Construction in progress - Real Estate Assets, net - Cash and cash equivalents - Rents and other receivables, net Acquired intangibles, net - Deferred costs, net - - Prepaid expenses - Goodwill - - Investment in subsidiaries - - Other assets, net - TOTAL ASSETS $ 1,570,737 $ 376,149 $ (294,858) $ 1,652,028 LIABILITIES Mortgage notes payable $ 70,000 $ - $ - $ 70,000 Unsecured credit facility - - Senior notes, net of discount - - Capital lease and lease financing obligations - Accounts payable and accrued liabilities - Dividends and distributions payable - - Advance rents, security deposits and other liabilities - Deferred income taxes - Deferred income - TOTAL LIABILITIES - PARTNERS' CAPITAL Partners' capital TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 1,570,737 $ 376,149 $ (294,858) $ 1,652,028 Interim Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Three Months Ended June 30, 2015 (in thousands) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Rental $ 50,740 $ 1,453 $ - $ 52,193 Recoveries from customers - - Cloud and managed services - Other - Total revenues - Operating Expenses: Property operating costs - Real estate taxes and insurance - - Depreciation and amortization - General and administrative - Restructuring - - - - Transaction and integration costs - - Total operating expenses - Operating income - Other income and expenses: Interest income - - Interest expense - Other (expense) income, net - - Equity in net income of subsidiaries - - Income (loss) before taxes Tax benefit of taxable REIT subsidiaries - - Net income (loss) $ 5,520 $ 174 $ (174) $ 5,520 Interim Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Six Months Ended June 30, 2015 (in thousands) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Rental $ 100,073 $ 1,453 $ - $ 101,526 Recoveries from customers - - Cloud and managed services - Other - Total revenues - Operating Expenses: Property operating costs - Real estate taxes and insurance - - Depreciation and amortization - General and administrative - Restructuring - - - Transaction and integration costs - - Total operating expenses - Operating income - Other income and expenses: Interest income - - Interest expense - Other (expense) income, net - - Equity in net income of subsidiaries - - Income (loss) before taxes Tax benefit of taxable REIT subsidiaries - - Net income (loss) $ 10,557 $ 174 $ (174) $ 10,557 Interim Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2015 (in thousands) Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidated Net cash provided by operating activities $ $ $ Cash flow from investing activities: Acquisitions, net of cash acquired - Additions to property and equipment - Cash used in investing activities - Cash flow from financing activities: Credit facility proceeds - Debt repayment - Payment of deferred financing costs - Payment of cash dividends - Partnership distributions - Principal payments on capital lease obligations - Scheduled mortgage principal debt repayments - Equity proceeds, net of costs - Net cash provided by financing activities - Net (decrease) increase in cash and cash equivalents Cash and cash equivalents, beginning of period - Cash and cash equivalents, end of period $ $ $ - |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events On July 8, 2015 , the Company paid its regular quarterly cash dividend of $0.32 per common share and per unit in the Operating Partnership to stockholders and unit holders of record as of the close of business on June 19, 2015 . On August 6, 2015 , the Company declared its cash dividend for the third quarter of 2015 of $0.32 per common share and per unit in the Operating Partnership. The dividend is payable on October 6, 2015 to stockholders and unit holders of record as of the close of business on September 18, 2015 . |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – The accompanying financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying financial statements are presented for both QTS Realty Trust, Inc. and QualityTech, LP. References to “QTS” mean QTS Realty Trust, Inc. and its controlled subsidiaries; and references to the “Operating Partnership” mean QualityTech, LP and its controlled subsidiaries. Management operates QTS and the Operating Partnership as one business. The management of QTS consists of the same employees as the management of the Operating Partnership. QTS is the sole general partner of the Operating Partnership, and i ts only material asset consists of its ownership interest in the Operating Partnership. QTS does not conduct business itself, other than acting as the sole general partner of the Operating Partnership and issuing public equity from time to time. QTS has not issued or guaranteed any indebtedness. Except for net proceeds from public equity issuances by QTS, which are contributed to the Operating Partnership in exchange for units of limited partnership interest of the Operating Partnership, the Operating Partnership generates all remaining capital required by the business through its operations, the direct or indirect incurrence of indebtedness, and the issuance of partnership units. A s general partner with control of the Operating Partnership, QTS consolidates the Operating Partnership for financial reporting purposes. The Company believes, therefore, that providing one set of notes for the financial statements of QTS and the Operating Partnership provides the following benefits: · enhances investors’ understanding of QTS and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; · eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both QTS and the Operating Partnership; and · creates time and cost efficiencies through the preparation of one set of notes instead of two separate sets of notes. In addition, in light of these combined notes, the Company believes it is important for investors to understand the few differences between QTS and the Operating Partnership in the context of how QTS and the Operating Partnership operate as a consolidated company. The presentation of stockholders’ equity and partners’ capital are the main areas of difference between the consolidated balance sheets of QTS and those of the Operating Partnership. The Operating Partnership’s capital includes general and limited common units that are owned by QTS and the other partners. QTS' stockholders’ equity includes common stock, additional paid in capital, accumulated other comprehensive income (loss) and accumulated dividends in excess of earnings. The remaining equity is the portion of net assets that are retained by partners other than QTS, referred to as noncontrolling interests. The primary difference in QTS' Statements of Operations and Comprehensive Income (Loss) is that for net income (loss), QTS retains its proportionate share of the net income (loss) based on its ownership of the Operating Partnership, with the remaining balance being retained by the Operating Partnership. These combined notes refer to actions or holdings as being actions or holdings of “the Company.” Although the Operating Partnership is generally the entity that enters into contracts, holds assets and issues debt, management believes that these general references to “the Company” in this context is appropriate because the business is one enterprise operated through the Operating Partnership. As discussed above, QTS owns no operating assets and has no operations independent of the Operating Partnership and its subsidiaries. Also, the Operating Partnership owns no operating assets and has no operations independent of its subsidiaries . Obligations under the 5.875% Senior Notes due 2022 and the unsecured credit facility, both discussed in Note 5, are fully, unconditionally, and jointly and severally guaranteed by the Operating Partnership’s existing subsidiaries, other than QTS Finance Corporation, the co-issuer of the 5.875% Senior Notes due 2022 , and entities related to Carpathia Hosting, Inc. The indenture governing the 5.875% Senior Notes due 2022 restricts the ability of the Operating Partnership to make distributions to QTS, subject to certain exceptions, including distributions required in order for QTS to maintain its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended. The interim condensed consolidated financial statements of QTS Realty Trust, Inc. for the three and six months ended June 30, 2015 and 2014 , and as of June 30, 2015 and December 31, 2014 present the accounts of QTS Realty Trust, Inc. and its majority owned subsidiaries. This includes the operating results of the Operating Partnership for all periods presented. |
Use of Estimates | Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and deferred tax assets and the valuation of derivatives, real estate assets, acquired intangible assets and certain accruals. |
Principles of Consolidation | Principles of Consolidation – The consolidated financial statements of QTS Realty Trust, Inc. include the accounts of QTS Realty Trust, Inc. and its majority-owned subsidiaries. The consolidated financial statements of QualityTech, LP include the accounts of QualityTech, LP and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in the financial statements. |
Real Estate Assets | Real Estate Assets – Real estate assets are reported at cost. All capital improvements for the income-producing properties that extend their useful lives are capitalized to individual property improvements and depreciated over their estimated useful lives. Depreciation is generally provided on a straight-line basis over 40 years from the date the property was placed in service. Property improvements are depreciated on a straight-line basis over the life of the respective improvement ranging from 20 to 40 years from the date the components were placed in service. Leasehold improvements are depreciated over the lesser of 20 years or through the end of the respective life of the lease. Repairs and maintenance costs are expensed as incurred. For the three months ended June 30, 2015 , depreciation expense related to real estate assets and non-real estate assets was $12.4 million and $1.7 million, respectively, for a total of $14.1 million . For the three months ended June 30, 2014 , depreciation expense related to real estate assets and non-real estate assets was $9.1 million and $1.6 million, respectively , for a total of $10.7 million. For the six months ended June 30, 2015 , depreciation expense related to real estate assets and non-real estate assets was $23.3 million and $3.6 million, respectively, for a total of $26.9 million. For the six months ended June 30, 2014 , depreciation expense related to real estate assets and non-real estate assets was $17.9 million and $3.0 million, respectively, for a total of $20.9 million. The Company capitalizes certain development costs, including internal costs incurred in connection with development. The capitalization of costs during the construction period (including interest and related loan fees, property taxes and other direct and indirect costs) begins when development efforts commence and ends when the asset is ready for its intended use. Capitalization of such costs, excluding interest, aggregated to $2.6 million and $2.5 million for the three months ended June 30, 2015 and 2014 , respectively , an d $5.9 million and $4.7 million for the six months ended June 30, 2015 and 2014 , respectively. Interest is capitalized during the period of development by first applying the Company’s actual borrowing rate on the related asset and second, to the extent necessary, by applying the Company’s weighted average effective borrowing rate to the actual development and other costs expended during the construction period. Interest is capitalized until the property is ready for its intended use. Interest costs capitalized totaled $2.4 million and $1.8 million for the three months ended June 30, 2015 and 2014 , respectively , and $ 4.4 million and $3.4 million for the six months ended June 30, 2015 and 2014 , respectively . |
Acquisitions | Acquisitions – Acquisitions of real estate and other entities are either accounted for as asset acquisitions or business combinations depending on facts and circumstances. Purchase accounting is applied to the assets and liabilities related to all real estate investments acquired in accordance with the accounting requirements of ASC 805, Business Combinations , which requires the recording of net assets of acquired businesses at fair value. The fair value of the consideration transferred is allocated to the acquired tangible assets, consisting primarily of land, building and improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases , value of customer relationships , trade names, software intangibles and capital leases . The excess of the fair value of liabilities assumed, common stock issued and cash paid over the fair value of identifiable assets acquired is allocated to goodwill, which is not amortized by the Company. In developing estimates of fair value of acquired assets and assumed liabilities, management analyzed a variety of factors including market data, estimated future cash flows of the acquired operations, industry growth rates, current replacement cost for fixed assets and market rate assumptions for contractual obligations. Such a valuation requires management to make significant estimates and assumptions, particularly with respect to the intangible assets. Acquired in-place leases are amortized as amortization expense on a straight-line basis over the remaining life of the underlying leases. Amortization of acquired in place lease costs totaled $0.5 million and $0.6 million for the three months ended June 30, 2015 and 2014 , respectively , and $0.9 million and $1.3 million for the six months ended June 30, 2015 and 2014 , respectively . This amortization expense is accounted for as real estate amortization expense. Acquired customer relationships are amortized as amortization expense on a straight-line basis over the expected life of the customer relationship. Amortization of acquired customer relationships totaled $0.6 million and $0.3 million for the three months ended June 30, 2015 and 2014 , respectively , and $0.9 million and $0.7 million for the six months ended June 30, 2015 and 2014 , respectively . This amortization expense is accounted for as real estate amortization expense. Other acquired intangible assets, which includes platform , above or below market leases, and trade name intangibles, are amortized on a straight-line basis over their respective expected lives. Platform and trade name intangibles are amortized as amortization expense, which totaled $0.2 million for the three and six months ended June 30, 2015. Above or below market leases are amortized as rent expense, which was immaterial for the three and six months ended June 30, 2015. There was no amortization expense related to platform and trade name intangibles for the three and six months ended June 30, 2014. The expense associated with above and below market leases is accounted for as real estate expense, whereas the expense associated with the amortization of platform and trade name intangibles is accounted for as non-real estate expense. See Note 3 for discussion of the preliminary pu rchase price allocation for the acquisition of Carpathia Hosting, Inc. on June 16, 2015, as well as the final purchase price allocation for the Princeton facility that the Company acquired on June 30, 2014. |
Impairment of Long-Lived and Intangible Assets | Impairment of Long-Lived and Intangible Assets – The Company reviews its long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is generally measured by comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset group. If the net carrying value of the asset exceeds the value of the undiscounted cash flows, the fair value of the asset is assessed and may be considered impaired. An impairment loss is recognized based on the excess of the carrying amount of the impaired asset over its fair value. No impairment losses were recorded for the three and six months ended June 30, 2015 and 2014 , respectively. As a result of the Carpathia acquisition in June 2015, the Company recognized approximately $173 million in goodwill. The fair value of goodwill is the consideration transferred which is not allocable to identifiable intangible and tangible assets. The Company believes that it has one reporting unit for goodwill purposes, thus will assess goodwill for impairment at least annually on that basis. Based on the initial purchase price allocation, the Company does not believe there is any immediate impairment that would need to be recognized in relation to goodwill. |
Cash and Cash Equivalents | Cash and Cash Equivalents – The Company considers all demand deposits and money market accounts purchased with a maturity date of three months or less at the date of purchase to be cash equivalents. The Company’s account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is concentration of credit risk related to amounts on deposit in excess of FDIC coverage. The Company mitigates this risk by depositing a majority of its funds with several major financial institutions. The Company also has not experienced any losses and, therefore, does not believe that the risk is significant. |
Deferred Costs | Deferred Costs – Deferred costs, net, on the Company’s balance sheets include both financing costs and leasing costs. Deferred financing costs represent fees and other costs incurred in connection with obtaining debt and are amortized over the term of the loan and are included in interest expense. Amortization of the deferred financing costs was $0.8 million and $0.6 million for the three months ended June 30, 2015 and 2014 , respectively, and $1.6 million and $1.2 million for the six months ended June 30, 2015 and 2014 , respectively. During the three months ended June 30, 2015, the Company wrote off unamortized financing costs of $0.1 million in connection with the repayment of the Atlanta Metro equipment loan, as discussed in Note 5. During the three months ended June 30, 2014, the Company wrote off unamortized financing costs of $0.1 million in connection with the modification of its credit facility that is secured by the Richmond data center. Deferred financing costs, net of accumulated amortization are as follows: June 30, December 31, (dollars in thousands) 2015 2014 (unaudited) Deferred financing costs $ $ Accumulated amortization Deferred financing costs, net $ $ Deferred leasing costs consist of external fees and internal costs incurred in the successful negotiations of leases and are deferred and amortized over the terms of the related leases on a straight-line basis. If an applicable lease terminates prior to the expiration of its initial term, the carrying amount of the costs are written off to amortization expense. Amortization of deferred leasing costs totaled $2.8 million and $2.1 million for the three months ended June 30, 2015 and 2014 , respectively, and $5.5 million and $4.2 million for the six months ended June 30, 2015 and 2014 , respectively. Deferred leasing costs, net of accumulated amortization are as follows (excluding $2.9 million, net of amortization, related to a leasing arrangement at the Company’s Princeton facility in 2014): June 30, December 31, (dollars in thousands) 2015 2014 (unaudited) Deferred leasing costs $ $ Accumulated amortization Deferred leasing costs, net $ $ |
Advance Rents and Security Deposits | Advance Rents and Security Deposits – Advance rents, typically prepayment of the following month’s rent, consist of payments received from customers prior to the time they are earned and are recognized as revenue in subsequent periods when earned. Security deposits are collected from customers at the lease origination and are generally refunded to customers upon lease expiration. |
Deferred Income | Deferred Income – Deferred income generally results from non-refundable charges paid by the customer at lease inception to prepare their space for occupancy. The Company records this initial payment, commonly referred to as set-up fees, as a deferred income liability which amortizes into rental revenue over the term of the related lease on a straight-line basis. Deferred income was $19.6 million and $10.5 million as of June 30, 2015 and December 31, 2014 , respectively. Additionally, $1.4 million and $1.2 million of deferred income was amortized into revenue for the three months ended June 30, 2015 and 2014 , respectively, and $2.7 million and $2.4 million for the six months ended June 30, 2015 and 2014 , respectively. |
Interest Rate Derivative Instruments | Interest Rate Derivative Instruments – The Company utilizes derivatives to manage its interest rate exposure. During February 2012, the Company entered into interest rate swaps with a notional amount of $150 million which were cash flow hedges and qualified for hedge accounting. For these hedges, the effective portion of the change in fair value was recognized through other comprehensive income or loss. Amounts were reclassified out of other comprehensive income (loss) as the hedged item was recognized in earnings, either for ineffectiveness or for amounts paid relating to the hedge. The Company reflected all changes in the fair value of the swaps in other comprehensive income (loss) during the three and six months ended June 30 , 2014, as there was no ineffectiveness recorded in that period. The Company had no interest ra te swaps outstanding at June 30 , 2015 and December 31, 2014. |
Equity-based Compensation | Equity-based Compensation – All equity-based compensation is measured at fair value on the grant date or date of modification, as applicable, and recognized in earnings over the requisite service period. Depending upon the settlement terms of the awards, all or a portion of the fair value of equity-based awards may be presented as a liability or as equity in the consolidated balance sheets. Equity-based compensation costs are measured based upon their estimated fair value on the date of grant or modification. Equity-based compensation expense net of forfeited and repurchased awards was $1.8 million and $1.1 million for the three months ended June 30, 2015 and 2014 , respectively, and $ 3.1 million and $ 2.0 million for the six months ended June 30, 2015 and 2014 , |
Rental Revenue | Rental Revenue – The Company, as a lessor, has retained substantially all of the risks and benefits of ownership and accounts for its leases as operating leases. For lease agreements that provide for scheduled rent increases, rental income is recognized on a straight-line basis over the non-cancellable term of the leases, which commences when control of the space has been provided to the customer. The amount of the straight-line rent receivable on the balance sheets included in rents and other receivables, net was $5.8 million and $4.0 million as of June 30, 2015 and December 31, 2014 , respectively. Rental revenue also includes amortization of set-up fees which are amortized over the term of the respective lease as discussed above. Cloud and Managed Services Revenue – The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. |
Cloud and Managed Services Revenue | Cloud and Managed Services Revenue – The Company may provide both its cloud product and use of its managed services to its customers on an individual or combined basis. Service fee revenue is recognized as the revenue is earned, which generally coincides with the services being provided. |
Allowance for Uncollectible Accounts Receivable | Allowance for Uncollectible Accounts Receivable – Rents receivable are recognized when due and are carried at cost, less an allowance for doubtful accounts. The Company records a provision for losses on rents receivable equal to the estimated uncollectible accounts, which is based on management’s historical experience and a review of the current status of the Company’s receivables. As necessary, the Company also establishes an appropriate allowance for doubtful accounts for receivables arising from the straight-lining of rents. The aggregate allowance for doubtful accounts was $5.2 million and $3.7 million as of June 30, 2015 and December 31, 2014 , respectively. |
Capital Leases and Lease Financing Obligations | Capital Leases and Lease Financing Obligations – The Company evaluates leased real estate to determine whether the lease should be classified as a capital or operating lease in accordance with U.S GAAP. The Company periodically enters into capital leases for certain equipment. In addition, through its acquisition of Carpathia Hosting, Inc. (“Carpathia”) on June 16, 2015, the Company is now party to capital leases for property and equipment, as well as financing obligations related to a sale-leaseback transaction. The outstanding liabilities for the capital leases were $32.3 million and $13.1 million as of June 30, 2015 and December 31, 2014 , respectively. The outstanding liabilities for the lease financing obligations were $ 23.9 million as of June 30, 2015 . The value of the assets associated with these leases approximates the outstanding obligations as of June 30, 2015 and December 31, 2014 , respectively. Depreciation related to the associated assets is included in depreciation and amortization expense in the Statements of Operation s and Comprehensive Income . See Note 3 for further discussion of the acquisition of Carpathia and Note 5 for further discussion of capital leases and lease financing obligations. |
Recoveries from Customers | Recoveries from Customers – Certain customer leases contain provisions under which the customers reimburse the Company for a portion of the property’s real estate taxes, insurance and other operating expenses, which include certain power and cooling-related charges. The reimbursements are included in revenue as recoveries from customers in the Statements of Operations and Comprehensive Income in the period the applicable expenditures are incurred. Certain customer leases are structured to provide a fixed monthly billing amount that includes an estimate of various operating expenses, with all revenue from such leases included in rental revenues. |
Segment Information | Segment Information – The Company manages its business as one operating segment and thus one reportable segment consisting of a portfolio of investments in data centers located in the United States , Canada, Europe and the Asia-Pacific region . |
Customer Concentrations | Customer Concentrations – As of June 30, 2015 , one of the Company’s customers represented 7.3% of its total monthly rental revenue. No other customers exceeded 5% of total monthly rental revenue. As of June 30, 2015 , three of the Company’s customers exceeded 5% of total accounts recei vable. In aggregate, these three customers accounted for 36% of total accounts receivable. Two of thes e three customers individually exceeded 10% of total accounts receivable. |
Income Taxes | Income Taxes – The Company elected for one of its existing subsidiaries to be taxed as a taxable REIT subsidiary pursuant to the REIT rules of the U.S. Internal Revenue Code. For the taxable REIT subsidiary, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. As of December 31, 2014, the taxable REIT subsidiary’s deferred tax assets were primarily the result of U.S. net operating loss carryforwards. A valuation allowance was recorded against its gross deferred tax asset balance as of December 31, 2014. As a result of the acquisition of Carpathia, the Company has determined that it is more likely than not that pre-existing deferred tax assets will be realized by the combined entity, and the valuation allowance should be eliminated. The change in the valuation allowance resulting from the change in circumstances is included in income, recognized in deferred income tax benefit in the three and sixth months ended June 30, 2015. |
Fair Value Measurements | Fair Value Measurements – ASC Topic 820, Fair V alue Measurements , emphasizes that fair-value is a market-based measurement, not an entity-specific measurement. Therefore, a fair-value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair-value measurements, a fair-value hierarchy is established that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair-value measurement is based on inputs from different levels of the fair-value hierarchy, the level in the fair-value hierarchy within which the entire fair-value measurement falls is based on the lowest level input that is significant to the fair-value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. As the Company’s previous interest rate swaps matured on September 28, 2014, there are no financial assets or liabilities measured at fair value on a recurring basis on the consolidated balance sheets as of June 30, 2015 and December 31, 2014 . |
New Accounting Pronouncements | New Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. The new guidance narrows the definition of discontinued operations to disposals that represent a strategic shift in operations and requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The amendments in the ASU are effective for annual and interim reporting periods beginning on and after December 15, 2014. Early adoption is permitted. Adoption of this standard did not have any effect on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the current revenue recognition requirements in ASC 606, Revenue Recognition. Under this new guidance, entities should recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. This ASU also requires enhanced disclosures. In July 2015, the FASB finalized its decision to delay the effective date of t he amendments in this ASU by one year, and as such, they are effective for annual and interim periods b eginning after December 15, 2017. Early adoption is permitted ; however, entities are not permitted to adopt the standard earlier than December 15, 2016, the original effective date. Retrospective and modified retrospective application is allowed. The Company is currently assessing the i mpact of this standard on its consolidated financial s tatements. In April 2015, the FASB issued ASU 2015-03, “ Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs ”. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and not as a separate deferred charge. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. In June 2015, the Securities and Exchange Commission (“SEC”) stated that given the absence of authoritative guidance within this ASU for debt issuance costs related to revolving debt arrangements, the SEC staff would not object to an entity deferring and presenting such costs as an asset and subsequently amortizing them ratably over the term of the revolving debt arrangement. This announcement confirms that revolver arrangement costs are not within the scope of this ASU. The amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. The amendments are required to be applied on a retrospective basis, and upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. Adoption of this standard will affect the Company’s Consolidated Balance Sheets |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Deferred Financing Costs, Net of Accumulated Amortization | Deferred financing costs, net of accumulated amortization are as follows: June 30, December 31, (dollars in thousands) 2015 2014 (unaudited) Deferred financing costs $ $ Accumulated amortization Deferred financing costs, net $ $ |
Deferred Leasing Costs, Net of Accumulated Amortization | Deferred leasing costs, net of accumulated amortization are as follows (excluding $2.9 million, net of amortization, related to a leasing arrangement at the Company’s Princeton facility in 2014): June 30, December 31, (dollars in thousands) 2015 2014 (unaudited) Deferred leasing costs $ $ Accumulated amortization Deferred leasing costs, net $ $ |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Acquisitions [Abstract] | |
Schedule of the Preliminary Allocation of the Fair Value of Assets Acquired and Liabilities Assumed in Acquisition | The following table summarizes the consideration for the Carpathia acquisition and the preliminary allocation of the fair value of assets acquired and liabilities assumed at the acquisition date (in thousands). This allocation is subject to change pending the final valuation of these assets and liabilities: June 16, 2015 Land $ 1,130 Buildings and improvements Construction in process Acquired intangibles, net Net working capital Total identifiable assets acquired Capital lease and lease financing obligations Deferred income taxes Total liabilities assumed Net identifiable assets acquired Goodwill Net assets acquired $ 294,684 |
Pro Forma Consolidated Statements of Operations Including Acquisition | The following table represents the pro forma condensed consolidated statements of operations for the three-month periods ended June 30, 2015 and 2014, and for the six-month periods ended June 30, 2015 and 2014 (in thousands): (Unaudited) Pro Forma Condensed Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenue $ 90,984 $ 75,493 $ 174,309 $ 147,877 Net income $ 9,363 $ 4,804 $ 16,500 $ 8,766 |
Consideration for the New Jersey Facility and the Preliminary Allocation of the Fair Value of Assets Acquired | In June 2015, the Company finalized the Princeton facility purchase price allocation. The following table summarizes the consideration for the Princeton facility and the final valuation of the fair value of assets acquired as of June 30, 2015 (in thousands): Princeton facility Weighted average useful life Buildings $ 32,126 40 Land N/A Acquired intangibles 13 Deferred costs 10 Other assets 10 Intangible liabilities 17 Total purchase price $ 73,300 |
Real Estate Assets and Constr25
Real Estate Assets and Construction in Progress (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate Assets and Construction in Progress [Abstract] | |
Summary of Properties Owned or Leased by the Company | The following is a summary of properties owned or leased by the Company as of June 30, 2015 and December 31, 2014 (in thousands): As of June 30, 2015 (unaudited): Property Location Land Buildings and Improvements Construction in Progress Total Cost Owned Properties Suwanee, Georgia (Atlanta-Suwanee) $ $ $ $ Atlanta, Georgia (Atlanta-Metro) Santa Clara, California* - Richmond, Virginia Sacramento, California Princeton, New Jersey Dallas-Fort Worth, Texas Chicago, Illinois - - Miami, Florida Lenexa, Kansas Wichita, Kansas - - Leased Properties Carpathia properties *** Jersey City, New Jersey - Overland Park, Kansas ** - $ $ $ $ * Owned facility subject to long-term ground sublease. ** This does not include the portion of the business that is used for QTS office space or other real estate not used by customers. *** Includes 13 facilities. All facilities are leased, including those subject to capital leases. As of December 31, 2014 : Property Location Land Buildings and Improvements Construction in Progress Total Cost Owned Properties Suwanee, Georgia (Atlanta-Suwanee) $ $ $ $ Atlanta, Georgia (Atlanta-Metro) Santa Clara, California* - Richmond, Virginia Sacramento, California Princeton, New Jersey Dallas-Fort Worth, Texas Chicago, Illinois - - Miami, Florida Lenexa, Kansas Wichita, Kansas - - Leased Properties Jersey City, New Jersey - Overland Park, Kansas ** - - $ $ $ $ _____________________________ * Owned facility subject to long-term ground sublease. ** This does not include the portion of the business that is used for QTS office space or other real estate not used by customers. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt [Abstract] | |
Outstanding Debt Excluding Capital Leases | Below is a listing of the Company’s outstanding debt, including capital leases and lease financing obligations, as of June 30, 2015 and December 31, 2014 (in thousands): June 30, December 31, 2015 2014 (Unaudited) Unsecured Credit Facility $ $ Senior Notes, net of discount Richmond Credit Facility Atlanta-Metro Equipment Loan - Capital Lease and Lease Financing Obligations Total $ $ |
Annual Remaining Principal Payment | The annual remaining principal payment requirements as of June 30, 2015 per the contractual maturities and excluding extension options, capital leases and lease financing obligations, are as follows (in thousands): 2015 $ - 2016 - 2017 - 2018 2019 Thereafter Total $ |
Schedule of Combined Future Payment Obligations, Excluding Interest | The following table summarizes the Company’s combined future payment obligations, excluding interest, as of June 30, 2015 , on the capital leases and lease financing obligations above (in thousands): 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
Partners' Capital, Equity and27
Partners' Capital, Equity and Incentive Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Partners' Capital, Equity and Incentive Compensation Plans [Abstract] | |
Summary of Award Activity Under 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and Related Information | The following is a summary of award activity under the 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and related information for the six months ended June 30, 2015 : 2010 Equity Incentive Plan 2013 Equity Incentive Plan Number of Class O units Weighted average exercise price Weighted average fair value Number of Class RS units Weighted average grant date value Options Weighted average exercise price Weighted average fair value Restricted Stock Weighted average grant date value Outstanding at December 31, 2014 $ $ $ $ $ $ Granted — — — — — Exercised/Vested (2) — — Released from restriction (1) — — — — — — — — Cancelled/Expired (3) — — — — — Outstanding at June 30, 2015 $ $ $ $ $ $ (1) This represents Class RS units that upon vesting have converted to Operating Partnership units. (2) This represents the Class A common stock that has been released from restriction and which was not surrendered by the holder to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. (3) Includes 9,625 restricted Class A common stock surrendered by certain employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. |
Summary of Assumptions and Fair Values for Restricted Stock and Options to Purchase Shares of Class A Common Stock Granted | Class O units and options to purchase shares of Class A common stock were valued using the Black-Scholes model. Three and Six Months Ended June 30, 2015 Fair value of restricted stock granted $35.81 - $37.64 Fair value of options granted $8.00 - $8.05 Expected term (years) 5.5 -6.1 Expected volatility Expected dividend yield 3.50 - 3.57% Expected risk-free interest rates 1.67 - 1.69% |
Summary of Information About Awards Outstanding | The following table summarizes information about awards outstanding as of June 30, 2015 . Operating Partnership Awards Outstanding Exercise prices Awards outstanding Weighted average remaining vesting period (years) Class RS Units $ - 2 Class O Units $ 20 -25 1 Total Operating Partnership awards outstanding QTS Realty Trust, Inc. Awards Outstanding Exercise prices Awards outstanding Weighted average remaining vesting period (years) Restricted stock $ - 3 Options to purchase Class A common stock $ 21 -36.54 1 Total QTS Realty Trust, Inc. awards outstanding |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | The transactions which occurred during the three and six months ended June 30, 2015 and 2014 are outlined below (in thousands): Three Months Ended Six Months Ended June 30, June 30, (dollars in thousands) 2015 2014 2015 2014 Tax, utility, insurance and other reimbursement $ $ $ $ Rent expense Capital assets acquired Total $ $ $ $ |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings per Share [Abstract] | |
Summary of Basic and Diluted Earnings Per Share | Diluted income (loss) per share adjusts basic income (loss) per share for the effects of potentially dilutive common shares. Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2015 2014 2015 2014 Net income available to common stockholders $ 4,632 $ 3,090 $ 8,714 $ 7,288 Weighted average shares outstanding—basic Net income per share—basic $ 0.13 $ 0.11 $ 0.26 $ 0.25 Net income $ 5,520 $ 3,921 $ 10,557 $ 9,249 Weighted average shares outstanding—diluted (1) Net income per share—diluted $ 0.12 $ 0.11 $ 0.25 $ 0.25 (1) Includes 7,063 Class A and Class RS units, 492 “in the money” value of Class O units on an “as if” converted basis and 220 “in the money” value of options to purchase shares of Class A common stock on an “as if” converted basis as of the three months ended June 30, 2015 , and 7,189 Class A and Class RS units, 464 “in the money” value of Class O units on an “as if” converted basis and 218 “in the money” value of options to purchase shares of Class A common stock on an “as if” converted basis as of the six months ended June 30, 2015 . As of the three months ended June 30, 2014 , this amount included 7,797 Class A and Class RS units, 89 “in the money” value of Class O units on as “as if” converted basis and 107 “in the money” value options to purchase shares of Class A common stock on an “as if” converted basis, and as of the six months ended June 30, 2014 , this amount included 7,797 Class A and Class RS units, 57 “in the money” value of Class O units on an “as if” converted basis and 79 “in the money” value options to purchase shares of Class A common stock on as “as if” converted basis. |
Customer Leases, as Lessor (Tab
Customer Leases, as Lessor (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Customer Leases, as Lessor [Abstract] | |
Future Minimum Lease Payments to be Received Under Non-Cancelable Operating Customer Leases | Future minimum lease payments to be received under non-cancelable operating customer leases ( inclusive of payments for contracts which have not yet commenced, and exclusive of recoveries of operating costs from customers) are as follows for the years ending December 31 (in thousands): Period Ending December 31, 2015 (July - December) $ 2016 2017 2018 2019 Thereafter Total $ |
Condensed Consolidating Finan31
Condensed Consolidating Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Condensed Consolidating Financial Information [Abstract] | |
Condensed Consolidating Balance Sheet | Interim Condensed Consolidating Balance Sheet June 30, 2015 (in thousands) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Real Estate Assets Land $ 51,300 $ 1,130 $ - $ 52,430 Buildings and improvements - Less: Accumulated depreciation - - Construction in progress - Real Estate Assets, net - Cash and cash equivalents - Rents and other receivables, net Acquired intangibles, net - Deferred costs, net - - Prepaid expenses - Goodwill - - Investment in subsidiaries - - Other assets, net - TOTAL ASSETS $ 1,570,737 $ 376,149 $ (294,858) $ 1,652,028 LIABILITIES Mortgage notes payable $ 70,000 $ - $ - $ 70,000 Unsecured credit facility - - Senior notes, net of discount - - Capital lease and lease financing obligations - Accounts payable and accrued liabilities - Dividends and distributions payable - - Advance rents, security deposits and other liabilities - Deferred income taxes - Deferred income - TOTAL LIABILITIES - PARTNERS' CAPITAL Partners' capital TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 1,570,737 $ 376,149 $ (294,858) $ 1,652,028 |
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) | Interim Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Three Months Ended June 30, 2015 (in thousands) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Rental $ 50,740 $ 1,453 $ - $ 52,193 Recoveries from customers - - Cloud and managed services - Other - Total revenues - Operating Expenses: Property operating costs - Real estate taxes and insurance - - Depreciation and amortization - General and administrative - Restructuring - - - - Transaction and integration costs - - Total operating expenses - Operating income - Other income and expenses: Interest income - - Interest expense - Other (expense) income, net - - Equity in net income of subsidiaries - - Income (loss) before taxes Tax benefit of taxable REIT subsidiaries - - Net income (loss) $ 5,520 $ 174 $ (174) $ 5,520 Interim Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) Six Months Ended June 30, 2015 (in thousands) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Rental $ 100,073 $ 1,453 $ - $ 101,526 Recoveries from customers - - Cloud and managed services - Other - Total revenues - Operating Expenses: Property operating costs - Real estate taxes and insurance - - Depreciation and amortization - General and administrative - Restructuring - - - Transaction and integration costs - - Total operating expenses - Operating income - Other income and expenses: Interest income - - Interest expense - Other (expense) income, net - - Equity in net income of subsidiaries - - Income (loss) before taxes Tax benefit of taxable REIT subsidiaries - - Net income (loss) $ 10,557 $ 174 $ (174) $ 10,557 |
Condensed Consolidating Statement of Cash Flows | Interim Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2015 (in thousands) Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidated Net cash provided by operating activities $ $ $ Cash flow from investing activities: Acquisitions, net of cash acquired - Additions to property and equipment - Cash used in investing activities - Cash flow from financing activities: Credit facility proceeds - Debt repayment - Payment of deferred financing costs - Payment of cash dividends - Partnership distributions - Principal payments on capital lease obligations - Scheduled mortgage principal debt repayments - Equity proceeds, net of costs - Net cash provided by financing activities - Net (decrease) increase in cash and cash equivalents Cash and cash equivalents, beginning of period - Cash and cash equivalents, end of period $ $ $ |
Description of Business (Narrat
Description of Business (Narrative) (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2015USD ($)property$ / sharesshares | Dec. 31, 2013USD ($) | Dec. 31, 2014$ / sharesshares | Oct. 15, 2013$ / sharesshares | |
Organization And Description Of Business [Line Items] | ||||
Number of properties | property | 25 | |||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Common stock, shares issued | shares | 40,881,002 | 29,408,138 | ||
Net proceeds from issuance of shares | $ | $ 279 | |||
Ownership interest | 85.40% | |||
Common Class A [Member] | ||||
Organization And Description Of Business [Line Items] | ||||
Common stock, par value | $ 0.01 | |||
Common stock, shares issued | shares | 14,087,500 | |||
Net proceeds from issuance of shares | $ | $ 203.7 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Useful life of property | 40 years | ||||
Depreciation expense from operation | $ 14,100 | $ 10,700 | $ 26,900 | $ 20,900 | |
Real estate cost capitalized excluding interest cost | 2,600 | 2,500 | 5,900 | 4,700 | |
Real estate interest cost capitalized incurred | 2,400 | 1,800 | 4,400 | 3,400 | |
Annual amortization for intangible assets for 2015 | 10,900 | 10,900 | |||
Annual amortization for intangible assets for 2016 | 10,900 | 10,900 | |||
Amortization of the deferred financing costs | 1,585 | 1,314 | |||
Deferred leasing costs, net | 15,278 | 15,278 | $ 16,469 | ||
Unamortized financing costs write down | 100 | 100 | |||
In Place Leases [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Amortization of lease costs | 500 | 600 | 900 | 1,300 | |
Tenant Relationship [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Amortization of lease costs | 600 | 300 | 900 | 700 | |
Platform and Trade Names [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Amoritzation of intangible assets | 200 | 0 | 200 | 0 | |
Qualitytech, LP [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Amortization of the deferred financing costs | 1,585 | 1,314 | |||
Real Estate Assets [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Depreciation expense from operation | 12,400 | 9,100 | 23,300 | 17,900 | |
Non-Real Estate Assets [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Depreciation expense from operation | $ 1,700 | $ 1,600 | $ 3,600 | 3,000 | |
Minimum [Member] | Real Property [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Useful life of property | 20 years | ||||
Maximum [Member] | Real Property [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Useful life of property | 40 years | ||||
Maximum [Member] | Leasehold Improvements [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Useful life of property | 20 years | ||||
Unsecured Credit Facility [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Amortization of the deferred financing costs | $ 1,600 | $ 1,200 | |||
Senior Notes [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Interest rate | 5.875% | 5.875% | |||
Senior notes due | 2,022 | ||||
Princeton Facility [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Deferred leasing costs, net | $ 2,900 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Additional Information 1) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 16, 2015 | Dec. 31, 2014 | Feb. 29, 2012 | Feb. 08, 2012 | |
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Impairment losses | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Goodwill | 173,237 | 173,237 | ||||||
Amortization of the deferred financing costs | 1,585 | 1,314 | ||||||
Amortization of deferred leasing costs totaled | 2,800 | 2,100 | 5,500 | 4,200 | ||||
Deferred income | 19,557 | 19,557 | $ 10,531 | |||||
Amortization of deferred revenue | 1,400 | 1,200 | 2,700 | 2,400 | ||||
Company recorded equity-based compensation expense net of repurchased awards and forfeits | 1,800 | 1,100 | 3,100 | 2,000 | ||||
Amount of the straight-line rent receivable on the balance sheets included in rents and other receivables | 5,800 | 5,800 | $ 4,000 | |||||
Unsecured Revolving Credit Facility [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Amortization of the deferred financing costs | 800 | 600 | ||||||
Interest Rate Swap [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Notional amount of derivative | 0 | 0 | ||||||
Derivative ineffectiveness | $ 0 | $ 0 | ||||||
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Notional amount of derivative | $ 150,000 | $ 150,000 | ||||||
Carpathia Hosting, Inc. [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Goodwill | $ 173,000 | $ 173,000 | $ 173,237 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Deferred Financing Costs, Net of Accumulated Amortization) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Summary of Significant Accounting Policies [Abstract] | ||
Deferred financing costs | $ 18,581 | $ 18,152 |
Accumulated amortization | (3,303) | (1,683) |
Deferred financing costs, net | $ 15,278 | $ 16,469 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Deferred Leasing Costs, Net of Accumulated Amortization) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Summary of Significant Accounting Policies [Abstract] | ||
Deferred leasing costs | $ 33,154 | $ 26,799 |
Accumulated amortization | (13,380) | (9,378) |
Deferred leasing costs, net | $ 19,774 | $ 17,421 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Additional Information 2) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015USD ($)segment | Dec. 31, 2014USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||
Capital lease obligations | $ 32,300 | $ 13,100 |
Lease financing obligations | $ 23,900 | |
Number of operating segments | segment | 1 | |
Number of reportable segments | segment | 1 | |
Financial assets | $ 0 | 0 |
Financial liability | 0 | 0 |
Accounts Receivable [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Aggregate allowance for doubtful accounts | $ 5,200 | $ 3,700 |
Customer One [Member] | Rental Revenue [Member] | Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Percentage of total revenue | 7.30% | |
Customer Two [Member] | Accounts Receivable [Member] | Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Percentage of total accounts receivable | 10.00% | |
Three Customers [Member] | Accounts Receivable [Member] | Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Percentage of total accounts receivable | 5.00% | |
Other Customers [Member] | Rental Revenue [Member] | Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Percentage of total revenue | 5.00% | |
Five Customers [Member] | Accounts Receivable [Member] | Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Percentage of total accounts receivable | 36.00% | |
Carpathia Hosting, Inc. [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Lease financing obligations | $ 2,600 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) | Jun. 30, 2015USD ($) | Jun. 16, 2015USD ($)propertycustomer | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($)ft²aMW | Dec. 31, 2014USD ($) | Jul. 23, 2014USD ($) |
Business Acquisition [Line Items] | ||||||
Ownership interest | 85.40% | 85.40% | ||||
Amoritization of intangible assets in the remainder of the year | $ 5,900,000 | $ 5,900,000 | ||||
Amoritization of intangible assets in 2016 | 10,900,000 | 10,900,000 | ||||
Amoritization of intangible assets in 2017 | 10,900,000 | 10,900,000 | ||||
Amoritization of intangible assets in 2018 | 8,800,000 | 8,800,000 | ||||
Amoritization of intangible assets in 2019 | 6,600,000 | 6,600,000 | ||||
Cash consideration paid for acquisition | $ 170,150,000 | $ 114,157,000 | ||||
Carpathia Hosting, Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Ownership interest | 100.00% | |||||
Acquisition costs | $ 326,000,000 | |||||
Number of customers of acquired entity | customer | 230 | |||||
Number of domestic data centers acquired | property | 8 | |||||
Number of international data centers acquired | property | 5 | |||||
Issuance of common stock | $ 300,000,000 | |||||
Revenue since acquisition | 3,700,000 | |||||
Net income since acquisition | $ 200,000 | |||||
Princeton Facility [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate costs related to acquisition | $ 73,300,000 | |||||
Acres of real estate property | a | 194 | |||||
Area of facility (in square feet) | ft² | 560,000 | |||||
Lease period | 10 years | |||||
Renewal of lease period, maximum | 15 years | |||||
Princeton Facility [Member] | Raised Floor With Twelve MW Gross Power [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Area of facility (in square feet) | ft² | 58,000 | |||||
Capacity of the plant (in MW) | MW | 12 | |||||
Common Class A [Member] | Carpathia Hosting, Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Notes issued | $ 387,000,000 | |||||
Senior Notes [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Notes issued | $ 300,000,000 |
Acquisitions (Allocation of the
Acquisitions (Allocation of the Fair Value of Assets Acquired and Liabilities Assumed as of the Acquisition Date) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 16, 2015 |
Business Acquisition [Line Items] | ||
Goodwill | $ 173,237 | |
Carpathia Hosting, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Land | $ 1,130 | |
Buildings | 79,372 | |
CIP | 12,127 | |
Acquired intangibles, net | 89,847 | |
Net working capital | 2,569 | |
Total identifiable assets acquired | 185,045 | |
Capital lease and lease financing obligations | 43,832 | |
Deferred income taxes | 19,766 | |
Total liabilities assumed | 63,598 | |
Net identifiable assets acquired | 121,447 | |
Goodwill | $ 173,000 | 173,237 |
Net assets acquired | $ 294,684 |
Acquisitions (Schedule of Pro F
Acquisitions (Schedule of Pro Forma Information Related to Acquisition) (Details) - Carpathia Hosting, Inc. [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Pro forma revenue | $ 90,984 | $ 75,493 | $ 174,309 | $ 147,877 |
Pro forma net income (loss) | $ 9,363 | $ 4,804 | $ 16,500 | $ 8,766 |
Acquisitions (Consideration for
Acquisitions (Consideration for the New Jersey Facility and the Preliminary Allocation of the Fair Value of Assets Acquired) (Details) - Jun. 30, 2015 - Princeton Facility [Member] - USD ($) $ in Thousands | Total |
Business Acquisition [Line Items] | |
Buildings | $ 32,126 |
Land | 20,700 |
Acquired intangibles | 30,634 |
Deferred costs | 3,290 |
Other | 297 |
Intangible liabilities | (13,747) |
Total purchase price | $ 73,300 |
Buildings, Weighted average useful life | 40 years |
Intangible liabilities, Weighted average useful life | 17 years |
Deferred Costs [Member] | |
Business Acquisition [Line Items] | |
Deferred costs, Weighted average useful life | 10 years |
Other [Member] | |
Business Acquisition [Line Items] | |
Other assets, Weighted average useful life | 10 years |
Acquisition Related Intangibles [Member] | |
Business Acquisition [Line Items] | |
Intangible assets, Weighted average useful life | 13 years |
Real Estate Assets and Constr42
Real Estate Assets and Construction in Progress (Summary of Properties Owned or Leased by the Company) (Details) $ in Thousands | Jun. 30, 2015USD ($)property | Dec. 31, 2014USD ($) | |
Real Estate Properties [Line Items] | |||
Land | $ 52,430 | $ 48,577 | |
Buildings and improvements | 1,073,120 | 914,286 | |
Construction in progress | 320,885 | 214,719 | |
Total cost | 1,446,435 | 1,177,582 | |
Owned Properties [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 51,300 | 48,577 | |
Buildings and improvements | 965,280 | 886,116 | |
Construction in progress | 307,315 | 213,772 | |
Total cost | 1,323,895 | 1,148,465 | |
Owned Properties [Member] | Suwanee, Georgia (Atlanta-Suwanee) [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 3,521 | 3,521 | |
Buildings and improvements | 143,672 | 138,991 | |
Construction in progress | 13,699 | 6,345 | |
Total cost | 160,892 | 148,857 | |
Owned Properties [Member] | Atlanta, Georgia (Atlanta-Metro) [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 15,396 | 15,397 | |
Buildings and improvements | 374,600 | 356,122 | |
Construction in progress | 36,183 | 22,693 | |
Total cost | $ 426,179 | $ 394,212 | |
Owned Properties [Member] | Santa Clara, California [Member] | |||
Real Estate Properties [Line Items] | |||
Land | [1] | ||
Buildings and improvements | [1] | $ 92,614 | $ 90,332 |
Construction in progress | [1] | 916 | 650 |
Total cost | [1] | 93,530 | 90,982 |
Owned Properties [Member] | Richmond, Virginia [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 2,180 | 2,180 | |
Buildings and improvements | 166,030 | 127,080 | |
Construction in progress | 107,770 | 71,794 | |
Total cost | 275,980 | 201,054 | |
Owned Properties [Member] | Sacramento, California [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 1,481 | 1,481 | |
Buildings and improvements | 60,179 | 60,094 | |
Construction in progress | 524 | 278 | |
Total cost | 62,184 | 61,853 | |
Owned Properties [Member] | Princeton New Jersey [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 20,700 | 17,976 | |
Buildings and improvements | 32,572 | 35,951 | |
Construction in progress | 272 | 90 | |
Total cost | 53,544 | 54,017 | |
Owned Properties [Member] | Dallas, Texas [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 5,808 | 5,808 | |
Buildings and improvements | 61,863 | 44,053 | |
Construction in progress | 111,247 | 89,982 | |
Total cost | $ 178,918 | $ 139,843 | |
Owned Properties [Member] | Chicago, Illinois [Member] | |||
Real Estate Properties [Line Items] | |||
Land | |||
Buildings and improvements | |||
Construction in progress | $ 35,491 | $ 21,786 | |
Total cost | 35,491 | 21,786 | |
Owned Properties [Member] | Miami, Florida [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 1,777 | 1,777 | |
Buildings and improvements | 28,875 | 28,786 | |
Construction in progress | 1,192 | 129 | |
Total cost | 31,844 | 30,692 | |
Owned Properties [Member] | Lenexa, Kansas [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 437 | 437 | |
Buildings and improvements | 3,466 | 3,298 | |
Construction in progress | 21 | 25 | |
Total cost | $ 3,924 | $ 3,760 | |
Owned Properties [Member] | Wichita, Kansas [Member] | |||
Real Estate Properties [Line Items] | |||
Land | |||
Buildings and improvements | $ 1,409 | $ 1,409 | |
Construction in progress | |||
Total cost | $ 1,409 | $ 1,409 | |
Leased Properties [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 1,130 | ||
Buildings and improvements | 107,840 | $ 28,170 | |
Construction in progress | 13,570 | 947 | |
Total cost | $ 122,540 | $ 29,117 | |
Leased Properties [Member] | Jersey City, New Jersey [Member] | |||
Real Estate Properties [Line Items] | |||
Land | |||
Buildings and improvements | $ 27,611 | $ 27,318 | |
Construction in progress | 1,404 | 920 | |
Total cost | $ 29,015 | $ 28,238 | |
Leased Properties [Member] | Overland Park, Kansas [Member] | |||
Real Estate Properties [Line Items] | |||
Land | [2] | ||
Buildings and improvements | [2] | $ 857 | $ 852 |
Construction in progress | [2] | 39 | 27 |
Total cost | [2] | 896 | $ 879 |
Leased Properties [Member] | Carpathia Properties [Member] | |||
Real Estate Properties [Line Items] | |||
Land | [3] | 1,130 | |
Buildings and improvements | [3] | 79,372 | |
Construction in progress | [3] | 12,127 | |
Total cost | [3] | $ 92,629 | |
Number of facilities leased | property | 13 | ||
[1] | Owned facility subject to long-term ground sublease. | ||
[2] | This does not include the portion of the business that is used for QTS office space or other real estate not used by customers. | ||
[3] | Includes 13 facilities. All facilities are leased, including those subject to capital leases. |
Debt (Unsecured Credit Facility
Debt (Unsecured Credit Facility Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2014 | Jul. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2013 |
Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 150 | ||||
Letter of credit outstanding | $ 100 | $ 100 | |||
Repayment of term loan | $ 75 | ||||
Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Letter of credit outstanding | 2.5 | 2.5 | |||
Unsecured Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Letter of credit outstanding | 230 | 230 | |||
Unsecured Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility agreement date | May 1, 2013 | ||||
Credit facility maximum borrowing capacity | 650 | 650 | $ 575 | ||
Maximum the credit facility may be increased up until | $ 850 | $ 850 | |||
Line of credit facility weighted average interest rate outstanding percentage | 1.87% | 1.87% | |||
Unsecured Credit Facility [Member] | Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 100 | $ 100 | $ 225 | ||
Unsecured credit facility term | 5 years | 5 years | 5 years | ||
Maturity date | Dec. 17, 2019 | ||||
Unsecured Credit Facility [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 550 | $ 550 | $ 350 | ||
Unsecured credit facility term | 4 years | 4 years | 4 years | ||
Debt extension period | 1 year | 1 year | 1 year | ||
Line of credit facility accordion feature | $ 100 | ||||
Maturity date | Dec. 17, 2018 | ||||
Unsecured Credit Facility [Member] | Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 30 | $ 30 | |||
Unsecured Credit Facility [Member] | Minimum [Member] | Term Loan [Member] | LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio | 1.65% | 1.65% | |||
Unsecured Credit Facility [Member] | Minimum [Member] | Term Loan [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio | 0.65% | 0.65% | |||
Unsecured Credit Facility [Member] | Minimum [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio | 1.70% | 1.70% | |||
Unsecured Credit Facility [Member] | Minimum [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio | 0.70% | 0.70% | |||
Unsecured Credit Facility [Member] | Maximum [Member] | Term Loan [Member] | LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio | 2.20% | 2.20% | |||
Unsecured Credit Facility [Member] | Maximum [Member] | Term Loan [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio | 1.20% | 1.20% | |||
Unsecured Credit Facility [Member] | Maximum [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio | 2.25% | 2.25% | |||
Unsecured Credit Facility [Member] | Maximum [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio | 1.25% | 1.25% |
Debt (Senior Notes) (Details)
Debt (Senior Notes) (Details) - USD ($) | 6 Months Ended | 11 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Jul. 23, 2014 | |
Unsecured Credit Facility [Member] | Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | Dec. 17, 2019 | |||
Unsecured term loan outstanding | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | |
Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 300,000,000 | |||
Interest rate | 5.875% | 5.875% | 5.875% | |
Senior notes due | 2,022 | |||
Maturity date | Aug. 1, 2022 | |||
Percentage of issued price equal to face value | 99.211% | 99.211% | 99.211% | |
Notes issuance date | Jul. 23, 2014 |
Debt (Richmond Credit Facility
Debt (Richmond Credit Facility Narrative) (Details) - Jun. 30, 2015 - Richmond Credit Facility [Member] - USD ($) $ in Millions | Total |
Debt Instrument [Line Items] | |
Credit facility, maturity date | Jun. 30, 2019 |
Current revolving credit facility | $ 120 |
Line of credit facility weighted average interest rate outstanding percentage | 2.29% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Increased borrowing capacity after considering accordion feature | $ 200 |
Maximum [Member] | Libor Rate [Member] | |
Debt Instrument [Line Items] | |
Leverage ratio | 2.85% |
Maximum [Member] | Base Rate [Member] | |
Debt Instrument [Line Items] | |
Leverage ratio | 1.85% |
Minimum [Member] | Libor Rate [Member] | |
Debt Instrument [Line Items] | |
Leverage ratio | 2.10% |
Minimum [Member] | Base Rate [Member] | |
Debt Instrument [Line Items] | |
Leverage ratio | 1.10% |
Debt (Atlanta-Metro Equipment L
Debt (Atlanta-Metro Equipment Loan Narrative) (Details) - Atlanta-Metro Equipment Loan [Member] - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Apr. 09, 2010 | |
Debt Instrument [Line Items] | ||
Loan agreement amount of loan | $ 25 | |
Loan agreement interest rate | 6.85% | |
Member advances, maturity date | Jun. 1, 2020 |
Debt (Outstanding Debt Includin
Debt (Outstanding Debt Including Capital Leases) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Capital lease and lease financing obligations | $ 56,211 | $ 13,062 |
Total debt and lease obligations | 754,063 | 637,229 |
Unsecured Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding debt | 330,000 | 239,838 |
Senior Notes Net of Discount [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding debt | 297,852 | 297,729 |
Richmond Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding debt | 70,000 | 70,000 |
Atlanta-Metro Equipment Loan [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding debt | 16,600 | |
Capital Lease and Lease Financing Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Capital lease and lease financing obligations | $ 56,211 | $ 13,062 |
Debt (Annual Remaining Principa
Debt (Annual Remaining Principal Payment) (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Debt [Abstract] | |
2,015 | |
2,016 | |
2,017 | |
2,018 | $ 230,000 |
2,019 | 170,000 |
Thereafter | 300,000 |
Total | $ 700,000 |
Debt (Lease Narrative) (Details
Debt (Lease Narrative) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 28 Months Ended | |
Jun. 30, 2015USD ($)agreement | Jun. 30, 2015USD ($)agreement | Jun. 30, 2015USD ($)agreement | Jun. 30, 2015USD ($)agreement | Dec. 31, 2014USD ($) | |
Capital Leased Assets [Line Items] | |||||
Capital lease and lease financing obligations | $ 56,211 | $ 56,211 | $ 56,211 | $ 56,211 | $ 13,062 |
Capital lease and lease financing obligations acquired | 43,832 | ||||
Lease financing obligations | 23,900 | 23,900 | 23,900 | 23,900 | |
Real Property [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Capital lease and lease financing obligations | 19,200 | 19,200 | 19,200 | 19,200 | |
Carpathia Hosting, Inc. [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Capital lease and lease financing obligations | $ 32,300 | 32,300 | $ 32,300 | $ 32,300 | |
Capital lease and lease financing obligations acquired | $ 19,600 | ||||
Number of lease agreements | agreement | 2 | 2 | 2 | 2 | |
Oustandind financing agreement | $ 2,600 | $ 2,600 | $ 2,600 | $ 2,600 | |
Proceeds of lease financing obligations | $ 1,700 | ||||
Lease financing monthly principal and interest payment | 200 | ||||
Lease financing expiration date | Feb. 28, 2019 | ||||
Carpathia Hosting, Inc. [Member] | Sale-Leaseback Transaction [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Capital lease and lease financing obligations acquired | 21,300 | ||||
Carpathia Hosting, Inc. [Member] | Tenant Improvement Allowance [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Lease financing obligations | $ 4,800 | $ 4,800 | $ 4,800 | $ 4,800 | |
Minimum [Member] | Carpathia Hosting, Inc. [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Lease expiration year | 2,018 | ||||
Monthly lease payment | $ 200 | ||||
Maximum [Member] | Carpathia Hosting, Inc. [Member] | |||||
Capital Leased Assets [Line Items] | |||||
Lease expiration year | 2,019 | ||||
Monthly lease payment | $ 500 | ||||
Lease financing monthly principal and interest payment | $ 100 |
Debt (Future Payment Obligation
Debt (Future Payment Obligations) (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Debt [Abstract] | |
2,015 | $ 6,450 |
2,016 | 12,558 |
2,017 | 12,388 |
2,018 | 8,804 |
2,019 | 2,461 |
Thereafter | 13,550 |
Total lease obligations | $ 56,211 |
Interest Rate Derivative Inst51
Interest Rate Derivative Instruments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Feb. 29, 2012 | Feb. 08, 2012 | |
Derivative [Line Items] | ||||||
Unrealized gains or losses on cash flow hedge derivative effective portion | $ 0 | $ 200 | ||||
Interest expense related to payments on interest rate swaps | $ 4,799 | $ 2,208 | 10,141 | 4,273 | ||
Interest Rate Swap [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative instruments, notional amount | 0 | 0 | ||||
Interest expense related to payments on interest rate swaps | $ 0 | $ 200 | $ 0 | $ 300 | ||
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative inception date | Feb. 8, 2012 | |||||
Derivative maturity date | Sep. 28, 2014 | |||||
Derivative instruments, notional amount | $ 150,000 | $ 150,000 |
Partners' Capital, Equity and52
Partners' Capital, Equity and Incentive Compensation Plans (Narrative) (Details) | Aug. 06, 2015$ / shares | Jul. 08, 2015 | Jul. 08, 2015$ / shares | Jun. 30, 2015USD ($)itemshares | Mar. 31, 2015shares | Jun. 30, 2015USD ($)item$ / sharesshares | Mar. 31, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($)$ / shares | Mar. 31, 2014USD ($)$ / shares | Dec. 31, 2013USD ($) | Jun. 30, 2015USD ($)itemsecurityshares | Jun. 05, 2015$ / sharesshares | May. 03, 2015shares | Mar. 02, 2015$ / sharesshares |
Partners Capital And Distributions [Line Items] | ||||||||||||||
Number of classes of partnership units outstanding | security | 3 | |||||||||||||
Stock transaction date | Mar. 2, 2015 | |||||||||||||
Number of units issued | 5,000,000 | |||||||||||||
Proceeds from sale of stock | $ | $ 166,400,000 | |||||||||||||
Capital contributions | $ | 166,400,000 | |||||||||||||
Number of votes per share | item | 50 | 50 | 50 | |||||||||||
Equity based compensation expense unrecognized | $ | $ 16,800,000 | $ 16,800,000 | $ 16,800,000 | |||||||||||
Equity based compensation expense vesting period | 4 years | |||||||||||||
Equity based compensation awards intrinsic value | $ | $ 44,100,000 | 44,100,000 | $ 44,100,000 | |||||||||||
Aggregate distribution made to stockholders and partners | $ | $ 13,400,000 | $ 10,700,000 | $ 10,700,000 | $ 9,000,000 | ||||||||||
Dividend paid to common stockholders | $ / shares | $ 0.32 | $ 0.29 | $ 0.29 | $ 0.24 | ||||||||||
Partnership distribution per unit | $ / shares | $ 0.32 | $ 0.29 | $ 0.29 | $ 0.24 | ||||||||||
Dividends payable, date payable | Apr. 7, 2015 | Jan. 7, 2015 | Apr. 8, 2014 | Jan. 7, 2014 | ||||||||||
Net proceeds from issuance of shares | $ | $ 279,000,000 | |||||||||||||
QTS Realty Trust, Inc. Employee Stock Purchase Plan [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Shares reserved for purchase under plan | 250,000 | 250,000 | 250,000 | |||||||||||
Underwriters [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Shares issued | 1,050,000 | |||||||||||||
General Atlantic REIT, Inc. [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Shares sold | 4,350,000 | |||||||||||||
Sale of stock, price per share | $ / shares | $ 34.75 | |||||||||||||
Class O LTIP Holders [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Aggregate distribution made to stockholders and partners | $ | $ 200,000 | |||||||||||||
Class O Units [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Nonvested awards outstanding | 600,000 | 600,000 | 600,000 | |||||||||||
Class RS Units [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Nonvested awards outstanding | 100,000 | 100,000 | 100,000 | |||||||||||
Common Class A [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Sale of stock, price per share | $ / shares | $ 37 | |||||||||||||
Shares issued | 5,750,000 | |||||||||||||
Net proceeds from issuance of shares | $ | $ 203,700,000 | |||||||||||||
Chief Executive Officer [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Percentage of operating partnership unit exchanged | 2.00% | |||||||||||||
Underwriters [Member] | General Atlantic REIT, Inc. [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Option to purchase share of common stock | 1,402,500 | |||||||||||||
Qualitytech, LP [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Dividends payable, date of record | Jun. 19, 2015 | |||||||||||||
Qualitytech, LP [Member] | Subsequent Event [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Dividend paid to common stockholders | $ / shares | $ 0.32 | |||||||||||||
Dividends payable, date payable | Oct. 6, 2015 | Jul. 8, 2015 | ||||||||||||
Dividends payable, date declared | Aug. 6, 2015 | |||||||||||||
Cash dividend payable per common share | $ / shares | $ 0.32 | |||||||||||||
Dividends payable, date of record | Sep. 18, 2015 | |||||||||||||
GA QTS Interholdco, LLC [Member] | Common Class A [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Shares of stock sold by stockholder | 1,250,000 | |||||||||||||
Minimum [Member] | QTS Realty Trust, Inc. Employee Stock Purchase Plan [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Monthly diduction from eligible employees for plan | $ | 40 | |||||||||||||
Maximum [Member] | QTS Realty Trust, Inc. Employee Stock Purchase Plan [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Monthly diduction from eligible employees for plan | $ | $ 2,000 | |||||||||||||
Restricted Class A Common Stock [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Nonvested awards outstanding | 400,000 | 400,000 | 400,000 | |||||||||||
Options to purchase Class A common stock [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Nonvested awards outstanding | 400,000 | 400,000 | 400,000 | |||||||||||
2013 Equity Incentive Plan [Member] | ||||||||||||||
Partners Capital And Distributions [Line Items] | ||||||||||||||
Authorized shares to be issued under the plan | 4,750,000 | 4,750,000 | 4,750,000 | 1,750,000 | ||||||||||
Additional shares available for issuance under plan approved by Board of Directors | 3,000,000 |
Partners' Capital, Equity and53
Partners' Capital, Equity and Incentive Compensation Plans (Summary of Award Activity Under 2010 Equity Incentive Plan and 2013 Equity Incentive Plan and Related Information) (Details) - 6 months ended Jun. 30, 2015 - $ / shares | Total | |
2013 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance, Weighted average exercise price units | $ 22.87 | |
Weighted average exercise price units, Granted | 36.14 | |
Weighted average exercise price units, Exercised | [1] | $ 21.80 |
Weighted average exercise price units, Released from restriction | [2] | |
Weighted average exercise price units, Cancelled/Expired | [3] | $ 21 |
Ending balance, Weighted average exercise price units | 27.61 | |
Beginning balance, Weighted average fair value | 4.10 | |
Weighted average fair value, Granted | 8.02 | |
Weighted average fair value, Exercised | [1] | $ 3.80 |
Weighted average fair value, Released from restriction | [2] | |
Weighted average fair value, Cancelled/Expired | [3] | $ 3.52 |
Ending balance, Weighted average fair value | 5.50 | |
Beginning balance, Weighted average exercise price options outstanding | 29.13 | |
Weighted average exercise price options outstanding, Granted | 35.95 | |
Weighted average exercise price options outstanding, Exercised | [1] | $ 23.26 |
Weighted average exercise price options outstanding, Released from restriction | [2] | |
Weighted average exercise price options outstanding, Cancelled/Expired | [3] | $ 23.92 |
Ending balance, Weighted average exercise price options outstanding | $ 32.70 | |
2013 Equity Incentive Plan [Member] | Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance, Number of units | 584,949 | |
Number of units, granted | 312,997 | |
Number of units, Exercised | [1] | (8,843) |
Number of units, Released from restriction | [2] | |
Number of units, Cancelled/Expired | [3] | (8,594) |
Ending balance, Number of units | 880,509 | |
2013 Equity Incentive Plan [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance, Options Outstanding | 246,785 | |
Options, Granted | 186,070 | |
Options, Exercised | [1] | (20,453) |
Options, Released from restriction | [2] | |
Options, Cancelled/Expired | [3] | (9,625) |
Ending balance, Options Outstanding | 402,777 | |
2010 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance, Weighted average exercise price units | $ 23.49 | |
Weighted average exercise price units, Granted | ||
Weighted average exercise price units, Exercised | [1] | $ 20.62 |
Weighted average exercise price units, Released from restriction | [2] | |
Weighted average exercise price units, Cancelled/Expired | [3] | |
Ending balance, Weighted average exercise price units | $ 23.58 | |
Beginning balance, Weighted average fair value | $ 3.75 | |
Weighted average fair value, Granted | ||
Weighted average fair value, Exercised | [1] | $ 4.74 |
Weighted average fair value, Released from restriction | [2] | |
Weighted average fair value, Cancelled/Expired | [3] | |
Ending balance, Weighted average fair value | $ 3.72 | |
Beginning balance, Weighted average exercise price options outstanding | $ 23.49 | |
Weighted average exercise price options outstanding, Granted | ||
Weighted average exercise price options outstanding, Exercised | [1] | |
Weighted average exercise price options outstanding, Released from restriction | [2] | $ 25 |
Weighted average exercise price options outstanding, Cancelled/Expired | [3] | |
Ending balance, Weighted average exercise price options outstanding | $ 23.03 | |
Restricted Class A Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units surrendered | 9,625 | |
Class O Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Ending balance, Number of units | 600,000 | |
Class O Units [Member] | 2010 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance, Number of units | 1,518,717 | |
Number of units, granted | ||
Number of units, Exercised | [1] | (46,170) |
Number of units, Released from restriction | [2] | |
Number of units, Cancelled/Expired | [3] | |
Ending balance, Number of units | 1,472,547 | |
Class RS Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Ending balance, Number of units | 100,000 | |
Class RS Units [Member] | 2010 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning balance, Options Outstanding | 74,625 | |
Options, Granted | ||
Options, Exercised | [1] | |
Options, Released from restriction | [2] | (17,375) |
Options, Cancelled/Expired | [3] | |
Ending balance, Options Outstanding | 57,250 | |
[1] | This represents the Class A common stock that has been released from restriction and which was not surrendered by the holder to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. | |
[2] | This represents Class RS units that upon vesting have converted to Operating Partnership units. | |
[3] | Includes 9,625 restricted Class A common stock surrendered by certain employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common stock. |
Partners' Capital, Equity and54
Partners' Capital, Equity and Incentive Compensation Plans (Summary of Assumptions and Fair Values for Restricted Stock and Options to Purchase Shares of Class A Common Stock Granted) (Details) - Jun. 30, 2015 - $ / shares | Total | Total |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 33.00% | 33.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of restricted stock granted | $ 35.81 | $ 35.81 |
Fair value of options granted | $ 8 | $ 8 |
Expected term (years) | 5 years 6 months | 5 years 6 months |
Expected dividend yield | 3.50% | 3.50% |
Expected risk-free interest rates | 1.67% | 1.67% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of restricted stock granted | $ 37.64 | $ 37.64 |
Fair value of options granted | $ 8.05 | $ 8.05 |
Expected term (years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Expected dividend yield | 3.57% | 3.57% |
Expected risk-free interest rates | 1.69% | 1.69% |
Partners' Capital, Equity and55
Partners' Capital, Equity and Incentive Compensation Plans (Summary of Information About Awards Outstanding) (Details) - Jun. 30, 2015 - $ / shares | Total |
Operating Partnership [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding | 1,529,797 |
QTS Realty Trust, Inc Awards Outstanding [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding | 1,283,286 |
QTS Realty Trust, Inc Awards Outstanding [Member] | Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding | 402,777 |
Remaining term of awards | 3 years |
QTS Realty Trust, Inc Awards Outstanding [Member] | Options to purchase Class A common stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Lower limit of exercise price | $ 21 |
Upper limit of exercise price | $ 36.54 |
Awards Outstanding | 880,509 |
Remaining term of awards | 1 year |
Class O Units [Member] | Operating Partnership [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Lower limit of exercise price | $ 20 |
Upper limit of exercise price | $ 25 |
Awards Outstanding | 1,472,547 |
Remaining term of awards | 1 year |
Class RS Units [Member] | Operating Partnership [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding | 57,250 |
Remaining term of awards | 2 years |
Related Party Transactions (Sum
Related Party Transactions (Summary of Related Party Transactions) (Details) - Affiliated Entity [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Tax, utility, insurance and other reimbursement | $ 65 | $ 115 | $ 145 | $ 167 |
Rent expense | 254 | 257 | 507 | 519 |
Capital assets acquired | 26 | 27 | 125 | 74 |
Total | $ 345 | $ 399 | $ 777 | $ 760 |
Noncontrolling Interest (Narrat
Noncontrolling Interest (Narrative) (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015shares | Mar. 31, 2015shares | Jun. 30, 2015 | Oct. 31, 2014 | |
Quality Tech LP ownership percentage in operating partnership | 21.20% | |||
Stock conversion ratio | 1 | |||
Qualitytech, LP [Member] | ||||
Quality Tech LP ownership percentage in operating partnership | 14.60% | 14.60% | ||
Shares issued | 5,750,000 | 5,000,000 | ||
Class A Units [Member] | ||||
Units redeemed for common stock | 300,000 | 230,000 |
Earnings per Share (Summary of
Earnings per Share (Summary of Basic and Diluted Earnings per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Earnings per Share [Abstract] | |||||
Net income available to common stockholders | $ 4,632 | $ 3,090 | $ 8,714 | $ 7,288 | |
Weighted average shares outstanding-basic | 36,668,755 | 29,016,774 | 33,996,467 | 29,001,374 | |
Net income per share-basic | $ 0.13 | $ 0.11 | $ 0.26 | $ 0.25 | |
Net income | $ 5,520 | $ 3,921 | $ 10,557 | $ 9,249 | |
Weighted average shares outstanding-diluted | [1] | 44,444,104 | 37,009,746 | 41,867,944 | 36,934,210 |
Net income per share-diluted | $ 0.12 | $ 0.11 | $ 0.25 | $ 0.25 | |
[1] | Includes 7,063 Class A and Class RS units, 492 "in the money" value of Class O units on an "as if" converted basis and 220 "in the money" value of options to purchase shares of Class A common stock on an "as if" converted basis as of the three months ended June 30, 2015, and 7,189 Class A and Class RS units, 464 "in the money" value of Class O units on an "as if" converted basis and 218 "in the money" value of options to purchase shares of Class A common stock on an "as if" converted basis as of the six months ended June 30, 2015. As of the three months ended June 30, 2014, this amount included 7,797 Class A and Class RS units, 89 "in the money" value of Class O units on as "as if" converted basis and 107 "in the money" value options to purchase shares of Class A common stock on an "as if" converted basis, and as of the six months ended June 30, 2014, this amount included 7,797 Class A and Class RS units, 57 "in the money" value of Class O units on an "as if" converted basis and 79 "in the money" value options to purchase shares of Class A common stock on as "as if" converted basis. |
Earnings per Share (Summary o59
Earnings per Share (Summary of Basic and Diluted Earnings per Share Footnote) (Details) - shares | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Weighted average shares outstanding-diluted | [1] | 44,444,104 | 37,009,746 | 41,867,944 | 36,934,210 |
Class A Units [Member] | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Weighted average shares outstanding-diluted | 7,063,000 | 7,797,000 | 7,189,000 | 7,797,000 | |
Class O Units [Member] | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Weighted average shares outstanding-diluted | 492,000 | 89,000 | 464,000 | 57,000 | |
Class RS Units [Member] | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Weighted average shares outstanding-diluted | 7,063,000 | 7,797,000 | 7,189,000 | 7,797,000 | |
Options to purchase Class A common stock [Member] | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Weighted average shares outstanding-diluted | 220,000 | 107,000 | 218,000 | 79,000 | |
[1] | Includes 7,063 Class A and Class RS units, 492 "in the money" value of Class O units on an "as if" converted basis and 220 "in the money" value of options to purchase shares of Class A common stock on an "as if" converted basis as of the three months ended June 30, 2015, and 7,189 Class A and Class RS units, 464 "in the money" value of Class O units on an "as if" converted basis and 218 "in the money" value of options to purchase shares of Class A common stock on an "as if" converted basis as of the six months ended June 30, 2015. As of the three months ended June 30, 2014, this amount included 7,797 Class A and Class RS units, 89 "in the money" value of Class O units on as "as if" converted basis and 107 "in the money" value options to purchase shares of Class A common stock on an "as if" converted basis, and as of the six months ended June 30, 2014, this amount included 7,797 Class A and Class RS units, 57 "in the money" value of Class O units on an "as if" converted basis and 79 "in the money" value options to purchase shares of Class A common stock on as "as if" converted basis. |
Customer Leases, as Lessor (Fut
Customer Leases, as Lessor (Future Minimum Lease Payments to be Received Under Non-Cancelable Operating Customer Leases) (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Customer Leases, as Lessor [Abstract] | |
2015 (July - December) | $ 153,057 |
2,016 | 266,881 |
2,017 | 204,361 |
2,018 | 135,643 |
2,019 | 86,934 |
Thereafter | 247,162 |
Total | $ 1,094,038 |
Fair Value of Financial Instr61
Fair Value of Financial Instruments (Narrative) (Details) $ in Millions | Jun. 30, 2015USD ($) |
Senior Notes [Member] | Fair Value Measurements, Level 2 [Member] | |
Fair Value Of Financial Instruments [Line Items] | |
Fair value of loan based on current market rates | $ 299.3 |
Condensed Consolidating Finan62
Condensed Consolidating Financial Information (Condensed Consolidating Balance Sheets) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Real Estate Assets | ||||
Land | $ 52,430 | $ 48,577 | ||
Buildings and improvements | 1,073,120 | 914,286 | ||
Less: Accumulated depreciation | (205,284) | (180,167) | ||
Total real estate assets | 920,266 | 782,696 | ||
Construction in progress | 320,885 | 214,719 | ||
Real Estate Assets, net | 1,241,151 | 997,415 | ||
Cash and cash equivalents | 10,744 | 10,788 | $ 7,489 | $ 5,210 |
Rents and other receivables, net | 30,548 | 15,579 | ||
Acquired intangibles, net | 122,005 | 18,000 | ||
Deferred costs, net | 38,013 | 37,058 | ||
Prepaid expenses | 7,132 | 3,079 | ||
Goodwill | 173,237 | |||
Other assets, net | 29,198 | 24,640 | ||
TOTAL ASSETS | 1,652,028 | 1,106,559 | ||
LIABILITIES | ||||
Mortgage notes payable | 70,000 | 86,600 | ||
Unsecured credit facility | 330,000 | 239,838 | ||
Senior notes, net of discount | 297,852 | 297,729 | ||
Capital lease and lease financing obligations | 56,211 | 13,062 | ||
Accounts payable and accrued liabilities | 92,708 | 64,607 | ||
Dividends and distributions payable | 15,322 | 10,705 | ||
Advance rents, security deposits and other liabilities | 19,444 | 3,302 | ||
Deferred income taxes | 16,449 | |||
Deferred income | 19,557 | 10,531 | ||
TOTAL LIABILITIES | 917,543 | 726,374 | ||
EQUITY | ||||
TOTAL LIABILITIES AND EQUITY | 1,652,028 | 1,106,559 | ||
Eliminations [Member] | ||||
Real Estate Assets | ||||
Investment in subsidiaries | (294,858) | |||
TOTAL ASSETS | (294,858) | |||
EQUITY | ||||
Partners' capital | (294,858) | |||
TOTAL LIABILITIES AND EQUITY | (294,858) | |||
Qualitytech, LP [Member] | ||||
Real Estate Assets | ||||
Land | 52,430 | 48,577 | ||
Buildings and improvements | 1,073,120 | 914,286 | ||
Less: Accumulated depreciation | (205,284) | (180,167) | ||
Total real estate assets | 920,266 | 782,696 | ||
Construction in progress | 320,885 | 214,719 | ||
Real Estate Assets, net | 1,241,151 | 997,415 | ||
Cash and cash equivalents | 10,744 | 10,788 | $ 7,489 | $ 5,210 |
Rents and other receivables, net | 30,548 | 15,579 | ||
Acquired intangibles, net | 122,005 | 18,000 | ||
Deferred costs, net | 38,013 | 37,058 | ||
Prepaid expenses | 7,132 | 3,079 | ||
Goodwill | 173,237 | |||
Other assets, net | 29,198 | 24,640 | ||
TOTAL ASSETS | 1,652,028 | 1,106,559 | ||
LIABILITIES | ||||
Mortgage notes payable | 70,000 | 86,600 | ||
Unsecured credit facility | 330,000 | 239,838 | ||
Senior notes, net of discount | 297,852 | 297,729 | ||
Capital lease and lease financing obligations | 56,211 | 13,062 | ||
Accounts payable and accrued liabilities | 92,708 | 64,607 | ||
Dividends and distributions payable | 15,322 | 10,705 | ||
Advance rents, security deposits and other liabilities | 19,444 | 3,302 | ||
Deferred income taxes | 16,449 | |||
Deferred income | 19,557 | 10,531 | ||
TOTAL LIABILITIES | 917,543 | 726,374 | ||
EQUITY | ||||
Partners' capital | 734,485 | 380,185 | ||
TOTAL LIABILITIES AND EQUITY | 1,652,028 | 1,106,559 | ||
Guarantor Subsidiaries [Member] | ||||
Real Estate Assets | ||||
Land | 51,300 | |||
Buildings and improvements | 993,748 | |||
Less: Accumulated depreciation | (204,606) | |||
Total real estate assets | 840,442 | |||
Construction in progress | 308,758 | |||
Real Estate Assets, net | 1,149,200 | |||
Cash and cash equivalents | 6,117 | $ 10,788 | ||
Rents and other receivables, net | 18,294 | |||
Acquired intangibles, net | 30,158 | |||
Deferred costs, net | 38,013 | |||
Prepaid expenses | 5,534 | |||
Investment in subsidiaries | 294,858 | |||
Other assets, net | 28,563 | |||
TOTAL ASSETS | 1,570,737 | |||
LIABILITIES | ||||
Mortgage notes payable | 70,000 | |||
Unsecured credit facility | 330,000 | |||
Senior notes, net of discount | 297,852 | |||
Capital lease and lease financing obligations | 12,379 | |||
Accounts payable and accrued liabilities | 84,816 | |||
Dividends and distributions payable | 15,322 | |||
Advance rents, security deposits and other liabilities | 16,600 | |||
Deferred income taxes | (3,135) | |||
Deferred income | 12,418 | |||
TOTAL LIABILITIES | 836,252 | |||
EQUITY | ||||
Partners' capital | 734,485 | |||
TOTAL LIABILITIES AND EQUITY | 1,570,737 | |||
Non-Guarantor Subsidiaries [Member] | ||||
Real Estate Assets | ||||
Land | 1,130 | |||
Buildings and improvements | 79,372 | |||
Less: Accumulated depreciation | (678) | |||
Total real estate assets | 79,824 | |||
Construction in progress | 12,127 | |||
Real Estate Assets, net | 91,951 | |||
Cash and cash equivalents | 4,627 | |||
Rents and other receivables, net | 12,254 | |||
Acquired intangibles, net | 91,847 | |||
Prepaid expenses | 1,598 | |||
Goodwill | 173,237 | |||
Other assets, net | 635 | |||
TOTAL ASSETS | 376,149 | |||
LIABILITIES | ||||
Capital lease and lease financing obligations | 43,832 | |||
Accounts payable and accrued liabilities | 7,892 | |||
Advance rents, security deposits and other liabilities | 2,844 | |||
Deferred income taxes | 19,584 | |||
Deferred income | 7,139 | |||
TOTAL LIABILITIES | 81,291 | |||
EQUITY | ||||
Partners' capital | 294,858 | |||
TOTAL LIABILITIES AND EQUITY | $ 376,149 |
Condensed Consolidating Finan63
Condensed Consolidating Financial Information (Condensed Consolidating Statement of Operations and Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Rental | $ 52,193 | $ 41,966 | $ 101,526 | $ 82,545 |
Recoveries from customers | 5,582 | 3,852 | 11,246 | 7,543 |
Cloud and managed services | 8,220 | 4,970 | 14,015 | 9,201 |
Other | 2,122 | 550 | 2,716 | 992 |
Total revenues | 68,117 | 51,338 | 129,503 | 100,281 |
Operating Expenses: | ||||
Property operating costs | 22,031 | 16,529 | 41,367 | 32,752 |
Real estate taxes and insurance | 1,474 | 1,118 | 2,959 | 2,336 |
Depreciation and amortization | 18,062 | 13,817 | 34,305 | 27,064 |
General and administrative | 14,615 | 11,473 | 28,453 | 22,251 |
Restructuring | 1,046 | 1,046 | ||
Transaction and integration costs | 4,669 | 1,089 | 4,774 | 1,153 |
Total operating expenses | 60,851 | 45,072 | 111,858 | 86,602 |
Operating income | 7,266 | 6,266 | 17,645 | 13,679 |
Other income and expenses: | ||||
Interest income | 1 | 1 | 8 | |
Interest expense | (4,799) | (2,208) | (10,141) | (4,273) |
Other (expense) income, net | (83) | (110) | (83) | (110) |
Income before taxes | 2,385 | 3,948 | 7,422 | 9,304 |
Tax benefit (expense) of taxable REIT subsidiaries | 3,135 | (27) | 3,135 | (55) |
Net income | 5,520 | 3,921 | 10,557 | 9,249 |
Qualitytech, LP [Member] | ||||
Revenues: | ||||
Rental | 52,193 | 41,966 | 101,526 | 82,545 |
Recoveries from customers | 5,582 | 3,852 | 11,246 | 7,543 |
Cloud and managed services | 8,220 | 4,970 | 14,015 | 9,201 |
Other | 2,122 | 550 | 2,716 | 992 |
Total revenues | 68,117 | 51,338 | 129,503 | 100,281 |
Operating Expenses: | ||||
Property operating costs | 22,031 | 16,529 | 41,367 | 32,752 |
Real estate taxes and insurance | 1,474 | 1,118 | 2,959 | 2,336 |
Depreciation and amortization | 18,062 | 13,817 | 34,305 | 27,064 |
General and administrative | 14,615 | 11,473 | $ 28,453 | 22,251 |
Restructuring | 1,046 | 1,046 | ||
Transaction and integration costs | 4,669 | 1,089 | $ 4,774 | 1,153 |
Total operating expenses | 60,851 | 45,072 | 111,858 | 86,602 |
Operating income | 7,266 | 6,266 | 17,645 | 13,679 |
Other income and expenses: | ||||
Interest income | 1 | 1 | 8 | |
Interest expense | (4,799) | (2,208) | (10,141) | (4,273) |
Other (expense) income, net | (83) | (110) | (83) | (110) |
Income before taxes | 2,385 | 3,948 | 7,422 | 9,304 |
Tax benefit (expense) of taxable REIT subsidiaries | 3,135 | (27) | 3,135 | (55) |
Net income | 5,520 | $ 3,921 | 10,557 | $ 9,249 |
Guarantor Subsidiaries [Member] | ||||
Revenues: | ||||
Rental | 50,740 | 100,073 | ||
Recoveries from customers | 5,582 | 11,246 | ||
Cloud and managed services | 5,958 | 11,753 | ||
Other | 2,120 | 2,714 | ||
Total revenues | 64,400 | 125,786 | ||
Operating Expenses: | ||||
Property operating costs | 20,564 | 39,900 | ||
Real estate taxes and insurance | 1,474 | 2,959 | ||
Depreciation and amortization | 16,876 | 33,119 | ||
General and administrative | 13,781 | $ 27,619 | ||
Restructuring | ||||
Transaction and integration costs | 4,669 | $ 4,774 | ||
Total operating expenses | 57,364 | 108,371 | ||
Operating income | 7,036 | 17,415 | ||
Other income and expenses: | ||||
Interest income | 1 | 1 | ||
Interest expense | (4,743) | (10,085) | ||
Other (expense) income, net | (83) | (83) | ||
Equity in net income of subsidiaries | 174 | 174 | ||
Income before taxes | 2,385 | 7,422 | ||
Tax benefit (expense) of taxable REIT subsidiaries | 3,135 | 3,135 | ||
Net income | 5,520 | 10,557 | ||
Non-Guarantor Subsidiaries [Member] | ||||
Revenues: | ||||
Rental | 1,453 | 1,453 | ||
Cloud and managed services | 2,262 | 2,262 | ||
Other | 2 | 2 | ||
Total revenues | 3,717 | 3,717 | ||
Operating Expenses: | ||||
Property operating costs | 1,467 | 1,467 | ||
Depreciation and amortization | 1,186 | 1,186 | ||
General and administrative | 834 | $ 834 | ||
Restructuring | ||||
Total operating expenses | 3,487 | $ 3,487 | ||
Operating income | 230 | 230 | ||
Other income and expenses: | ||||
Interest expense | (56) | (56) | ||
Income before taxes | 174 | 174 | ||
Net income | 174 | $ 174 | ||
Eliminations [Member] | ||||
Operating Expenses: | ||||
Restructuring | ||||
Other income and expenses: | ||||
Equity in net income of subsidiaries | (174) | $ (174) | ||
Income before taxes | (174) | (174) | ||
Net income | $ (174) | $ (174) |
Condensed Consolidating Finan64
Condensed Consolidating Financial Information (Condensed Consolidating Statements of Cash Flow) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | $ 41,161 | $ 29,650 |
Cash flow from investing activities: | ||
Acquisitions, net of cash acquired | (288,865) | (73,300) |
Additions to property and equipment | (170,150) | (114,157) |
Cash used in investing activities | (459,015) | (187,457) |
Cash flow from financing activities: | ||
Credit facility proceeds | 350,162 | 182,500 |
Debt repayment | (260,000) | |
Payment of deferred financing costs | (512) | (924) |
Payment of cash dividend | (19,673) | (15,368) |
Principal payments on capital lease obligation | (1,227) | (367) |
Scheduled mortgage principal debt repayments | (16,600) | (1,100) |
Equity proceeds, net of costs | 370,074 | |
Net cash provided by financing activities | 417,810 | 160,087 |
Net (decrease) increase in cash and cash equivalents | (44) | 2,279 |
Cash and cash equivalents, beginning of period | 10,788 | 5,210 |
Cash and cash equivalents, end of period | 10,744 | 7,489 |
Qualitytech, LP [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 41,161 | 29,650 |
Cash flow from investing activities: | ||
Acquisitions, net of cash acquired | (288,865) | (73,300) |
Additions to property and equipment | (170,150) | (114,157) |
Cash used in investing activities | (459,015) | (187,457) |
Cash flow from financing activities: | ||
Credit facility proceeds | 350,162 | 182,500 |
Debt repayment | (260,000) | |
Payment of deferred financing costs | (512) | (924) |
Payment of cash dividend | (19,673) | (15,368) |
Partnership distributions | (4,414) | (4,654) |
Principal payments on capital lease obligation | (1,227) | (367) |
Scheduled mortgage principal debt repayments | (16,600) | $ (1,100) |
Equity proceeds, net of costs | 370,074 | |
Net cash provided by financing activities | 417,810 | $ 160,087 |
Net (decrease) increase in cash and cash equivalents | (44) | 2,279 |
Cash and cash equivalents, beginning of period | 10,788 | 5,210 |
Cash and cash equivalents, end of period | 10,744 | $ 7,489 |
Guarantor Subsidiaries [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 36,534 | |
Cash flow from investing activities: | ||
Acquisitions, net of cash acquired | (288,865) | |
Additions to property and equipment | (170,150) | |
Cash used in investing activities | (459,015) | |
Cash flow from financing activities: | ||
Credit facility proceeds | 350,162 | |
Debt repayment | (260,000) | |
Payment of deferred financing costs | (512) | |
Payment of cash dividend | (19,673) | |
Partnership distributions | (4,414) | |
Principal payments on capital lease obligation | (1,227) | |
Scheduled mortgage principal debt repayments | (16,600) | |
Equity proceeds, net of costs | 370,074 | |
Net cash provided by financing activities | 417,810 | |
Net (decrease) increase in cash and cash equivalents | (4,671) | |
Cash and cash equivalents, beginning of period | 10,788 | |
Cash and cash equivalents, end of period | 6,117 | |
Non-Guarantor Subsidiaries [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 4,627 | |
Cash flow from financing activities: | ||
Net (decrease) increase in cash and cash equivalents | 4,627 | |
Cash and cash equivalents, end of period | $ 4,627 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - $ / shares | Aug. 06, 2015 | Jul. 08, 2015 | Jul. 08, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 |
Subsequent Event [Line Items] | ||||||||
Dividend paid to common stockholders | $ 0.32 | $ 0.29 | $ 0.29 | $ 0.24 | ||||
Dividends payable, date payable | Apr. 7, 2015 | Jan. 7, 2015 | Apr. 8, 2014 | Jan. 7, 2014 | ||||
Qualitytech, LP [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends payable, date of record | Jun. 19, 2015 | |||||||
Subsequent Event [Member] | Qualitytech, LP [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividend paid to common stockholders | $ 0.32 | |||||||
Cash dividend payable per common share | $ 0.32 | |||||||
Dividends payable, date declared | Aug. 6, 2015 | |||||||
Dividends payable, date of record | Sep. 18, 2015 | |||||||
Dividends payable, date payable | Oct. 6, 2015 | Jul. 8, 2015 |