Market Overview

CyrusOne Reports First Quarter 2018 Earnings

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Pro Forma including Zenium, Signed $45 Million in Annualized GAAP
Revenue

Year-over-Year Revenue Growth of 32% and Adjusted
EBITDA Growth of 36%

CyrusOne Inc. (NASDAQ:CONE), a premier global data center REIT, today
announced first quarter 2018 earnings.

 

Highlights

Category

   

1Q'18

   

% Change

vs. 1Q'17

Revenue $196.6 million 32%
Net income $43.5 million n/m
Adjusted EBITDA $109.5 million 36%
Normalized FFO $82.2 million 34%
Net income per share $0.45 n/m
Normalized FFO per share $0.85 18%
 

 

Pro forma including Zenium, leased 32 megawatts ("MW") and 240,000
colocation square feet ("CSF") in the first quarter, totaling $45
million in annualized GAAP revenue

-- Includes 29 MW and 226,000 CSF totaling $40.4 million in
annualized revenue signed by CyrusOne and 3 MW and 14,000 CSF
totaling $4.2 million in annualized GAAP revenue signed by Zenium
 

Backlog of $39 million in annualized GAAP revenue as of the end of
the first quarter, representing more than $230 million in total
contract value

 

Added three Fortune 1000 companies as new customers, increasing
the total number of Fortune 1000 customers to 200 as of the end of
the quarter

 

Entered into a new senior unsecured credit agreement, increasing
the size of the credit facility by $1.0 billion, or 50%, to a
total of $3.0 billion, consisting of $1.7 billion revolving credit
facility and $1.3 billion in term loan commitments

-- Agreement also provides for an extension of maturity dates,
reductions in interest rate margins, and enhanced flexibility in
support of the Company's international expansion plans, including
the ability to borrow in non-USD currencies
 

Raised approximately $152 million in net proceeds through the sale
of 3.0 million shares of common stock under the at-the-market
("ATM") equity program

 

Acquisition of Zenium, a leading hyperscale data center provider
in Europe with four properties in London and Frankfurt, the
continent's two largest data center markets, expected to close in
May, pending final regulatory approval

 

"We had one of the highest quarterly leasing totals in the Company's
history and continued strong financial performance, with Revenue and
Adjusted EBITDA each growing over 30%" said Gary Wojtaszek, president
and chief executive officer of CyrusOne. "We are excited to begin our
global expansion by establishing a presence in the two largest markets
in Europe, London and Frankfurt, at a time when demand across the
continent has accelerated and our customers are increasingly asking us
to support their international growth objectives."

First Quarter 2018 Financial Results

Revenue was $196.6 million for the first quarter, compared to $149.3
million for the same period in 2017, an increase of 32%. The increase in
revenue was driven primarily by a 29% increase in occupied CSF, lease
termination fees totaling $5.0 million, and additional interconnection
services. The lease termination fees related primarily to a
reimbursement for capital expenditures made in connection with the
delivery of an initial deployment for a customer that subsequently
migrated from that location to another CyrusOne facility.

Net income was $43.5 million for the first quarter, compared to net loss
of $30.4 million in the same period in 2017. Net income for the first
quarter included a $40.5 million unrealized gain on the Company's equity
investment in GDS due to an increase in GDS's share price during the
quarter. Net income per basic and diluted common share1 was
$0.45 in the first quarter of 2018, compared to net loss of $(0.36) per
basic and diluted common share in the same period in 2017.

Net operating income (NOI)2 was $128.8 million for the first
quarter, compared to $97.0 million in the same period in 2017, an
increase of 33%. Adjusted EBITDA3 was $109.5 million for the
first quarter, compared to $80.7 million in the same period in 2017, an
increase of 36%.

Normalized Funds From Operations (Normalized FFO)4 was $82.2
million for the first quarter, compared to $61.2 million in the same
period in 2017, an increase of 34%. Normalized FFO per basic and diluted
common share was $0.85 in the first quarter of 2018, an increase of 18%
over first quarter 2017.

Leasing Activity

CyrusOne leased approximately 29 MW of power and 226,000 CSF in the
first quarter, representing $3.4 million in monthly recurring rent,
inclusive of the monthly impact of installation charges, or
approximately $40.4 million in annualized GAAP revenue5,
excluding estimates for pass-through power. This excludes the impact of
leases signed by Zenium in the first quarter. The weighted average lease
term of the new leases, based on square footage, is 77 months (6.4
years), and the weighted average remaining lease term of CyrusOne's
portfolio is 53 months (taking into account the impact of the backlog).
Recurring rent churn6 for the first quarter was 0.5%,
compared to 1.4% for the same period in 2017.

Portfolio Development and CSF Leased

In the first quarter, the Company completed construction on 82,000 CSF
and 27 MW of power capacity across four projects in Dallas, Northern
Virginia, Phoenix and Austin, increasing total CSF across 45 data
centers to approximately 3.35 million CSF. CSF leased7 as of
the end of the first quarter was 92% for stabilized properties8
and 86% overall. In addition, the Company has development projects
underway in Dallas, Northern Virginia, San Antonio, Phoenix, the New
York Metro area, and Chicago that are expected to add approximately
132,000 CSF and 36 MW of power capacity.

Balance Sheet and Liquidity

As of March 31, 2018, the Company had gross assets9 totaling
approximately $5.3 billion, an increase of approximately 28% over gross
assets as of March 31, 2017. CyrusOne had $2.20 billion of long-term debt10,
cash and cash equivalents of $228.7 million, and $1.7 billion available
under its unsecured revolving credit facility as of March 31, 2018. Net
debt10 was $1.99 billion as of March 31, 2018, representing
approximately 28% of the Company's total enterprise value as of March
31, 2018 of $7.1 billion, or 4.5x Adjusted EBITDA for the last quarter
annualized. Available liquidity11 was $2.22 billion as of
March 31, 2018.

As previously announced, CyrusOne entered into a new senior unsecured
credit agreement in the first quarter, increasing the size of the credit
facility by $1.0 billion, or 50%, to a total of $3.0 billion. The new
agreement also provides for an extension of maturity dates, reductions
in interest rate margins, and enhanced flexibility in support of the
Company's international expansion plans, including the ability to borrow
in non-USD currencies.

The agreement consists of a $1.7 billion revolving credit facility,
which includes a $750 million multicurrency borrowing sublimit, and term
loan commitments totaling $1.3 billion. The term loan commitments
consist of a $1.0 billion five-year term loan, which includes a delayed
draw feature allowing the Company to draw $300 million in up to three
tranches over a six-month period in multiple currencies, and a new $300
million seven-year term loan. The interest rate margins applicable to
the revolving credit facility and the five-year term loan based on the
Company's current leverage level have been decreased by 10 basis points
to LIBOR plus 1.45% and LIBOR plus 1.40%, respectively, while the
interest rate margin applicable to the seven-year term loan based on the
Company's current leverage level is LIBOR plus 1.70%. The maturity of
the revolving credit facility is March 2022, and the facility includes a
one-year extension option which, if exercised by the Company, would
extend the final maturity to March 2023. The maturity of the five-year
term loan is March 2023, and the seven-year term loan matures in March
2025. The credit agreement also contains an accordion that allows the
Company to obtain up to $1 billion in additional revolving or term loan
commitments.

Also in the first quarter, CyrusOne sold approximately 3.0 million
shares of its common stock through its ATM equity program at an average
price of $51.24, raising approximately $152 million in net equity
proceeds. As of March 31, 2018, there was approximately $346 million in
remaining availability under the current ATM program.

Dividend

On February 21, 2018, the Company announced a dividend of $0.46 per
share of common stock for the first quarter of 2018. The dividend was
paid on April 13, 2018, to stockholders of record at the close of
business on March 29, 2018.

Additionally, today the Company is announcing a dividend of $0.46 per
share of common stock for the second quarter of 2018. The dividend will
be paid on July 13, 2018, to stockholders of record at the close of
business on June 29, 2018.

Guidance

CyrusOne is reaffirming guidance for full year 2018. The annual guidance
provided below represents forward-looking statements, which are based on
current economic conditions, internal assumptions about the Company's
existing customer base, and the supply and demand dynamics of the
markets in which CyrusOne operates.

CyrusOne does not provide reconciliations for the non-GAAP financial
measures included in the annual guidance provided below due to the
inherent difficulty in forecasting and quantifying certain amounts that
are necessary for such reconciliations, including net income (loss) and
adjustments that could be made for transaction and acquisition
integration costs, legal claim costs, lease exit costs, asset
impairments and loss on disposals and other charges in its
reconciliation of historic numbers, the amount of which, based on
historical experience, could be significant.

 

Category

     

2018

Guidance(1)

Total Revenue $810 - 825 million
Lease and Other Revenues from Customers $735 - 745 million
Metered Power Reimbursements $75 - 80 million
Adjusted EBITDA $460 - 470 million
Normalized FFO per diluted common share $3.18 - 3.28
Capital Expenditures $850 - 900 million
Development $845 - 890 million
Recurring $5 - 10 million
 

(1) Full year 2018 guidance includes the impact of the
Zenium acquisition,

which is expected to close in May 2018. Development capital

expenditures include the acquisition of land for future
development.

 

Upcoming Conferences and Events

  • Jefferies 2018 Global Technology Conference on May 9-10 in Beverly
    Hills, California
  • J.P. Morgan Global Technology, Media and Communications Conference on
    May 15-17 in Boston, Massachusetts
  • 2018 RBC Global Datacenter and Connectivity Conference on May 22 in
    Falls Church, Virginia
  • Cowen Technology, Media & Telecom Conference on May 30-31 in New York
    City
  • NAREIT's REITweek Conference on June 5-7 in New York City

Conference Call Details

CyrusOne will host a conference call on May 3, 2018, at 11:00 AM Eastern
Time (10:00 AM Central Time) to discuss its results for the first
quarter of 2018. A live webcast of the conference call and the
presentation to be made during the call will be available under the
"Company" tab in the "Investors / Events and Presentations" section of
the Company's website at http://investor.cyrusone.com/events.cfm.
The U.S. conference call dial-in number is 1-844-492-3731, and the
international dial-in number is 1-412-542-4121. A replay will be
available one hour after the conclusion of the earnings call on May 3,
2018, through May 17, 2018. The U.S. toll-free replay dial-in number is
1-877-344-7529 and the international replay dial-in number is
1-412-317-0088. The replay access code is 10118898.

Safe Harbor

This release and the documents incorporated by reference herein contain
forward-looking statements regarding future events and our future
results that are subject to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. All statements, other than
statements of historical facts, are statements that could be deemed
forward-looking statements. These statements are based on current
expectations, estimates, forecasts, and projections about the industries
in which we operate and the beliefs and assumptions of our management.
Words such as "expects," "anticipates," "predicts," "projects,"
"intends," "plans," "believes," "seeks," "estimates," "continues,"
"endeavors," "strives," "may," variations of such words and similar
expressions are intended to identify such forward-looking statements. In
addition, any statements that refer to projections of our future
financial performance, our anticipated growth and trends in our
businesses, and other characterizations of future events or
circumstances are forward-looking statements. Readers are cautioned
these forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties, which could
cause our actual results to differ materially and adversely from those
reflected in the forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those
discussed in this release and those discussed in other documents we file
with the Securities and Exchange Commission (SEC). More information on
potential risks and uncertainties is available in our recent filings
with the SEC, including CyrusOne's Form 10-K report, Form 10-Q reports,
and Form 8-K reports. Actual results may differ materially and adversely
from those expressed in any forward-looking statements. We undertake no
obligation to revise or update any forward-looking statements for any
reason.

Adoption of New Accounting Standard and Use of Non-GAAP Financial
Measurements

On January 1, 2018, we adopted the new accounting standard with respect
to revenue recognition, see "Note 2. Summary of Significant Accounting
Policies" in our financial statements included on Form 10-Q for
additional information. We have adopted the new standard using the
modified retroactive transition method, where financial statement
presentations prior to the date of adoption are not adjusted.
Accordingly, all information related to periods prior to 2018 have not
been adjusted, including non-GAAP measurements.

This press release contains certain non-GAAP financial measures that
management believes are helpful in understanding the Company's business,
as further discussed within this press release. These financial
measures, which include Funds From Operations, Normalized Funds From
Operations, Adjusted EBITDA, Net Operating Income, Adjusted Net
Operating Income, and Net Debt should not be construed as being more
important than comparable GAAP measures. Detailed reconciliations of
these non-GAAP financial measures to comparable GAAP financial measures
have been included in the tables that accompany this release and are
available in the Investor Relations section of www.cyrusone.com.

Management uses FFO, Normalized FFO, Adjusted EBITDA, NOI, and Adjusted
NOI as supplemental performance measures because they provide
performance measures that, when compared year over year, capture trends
in occupancy rates, rental rates and operating costs. The Company also
believes that, as widely recognized measures of the performance of real
estate investment trusts (REITs) and other companies, these measures
will be used by investors as a basis to compare its operating
performance with that of other companies. Other companies may not
calculate these measures in the same manner, and, as presented, they may
not be comparable to others. Therefore, FFO, Normalized FFO, NOI,
Adjusted NOI, and Adjusted EBITDA should be considered only as
supplements to net income as measures of our performance. FFO,
Normalized FFO, NOI, Adjusted NOI, and Adjusted EBITDA should not be
used as measures of liquidity or as indicative of funds available to
fund the Company's cash needs, including the ability to pay dividends.
These measures also should not be used as substitutes for cash flow from
operating activities computed in accordance with U.S. GAAP.

1Net income / (loss) per common share is defined as net
income / (loss) divided by the weighted average common shares
outstanding for the period, which were 96.6 million for the first
quarter of 2018 (basic and diluted). The difference between basic and
diluted net income per share was less than one cent.

2We use Net Operating Income ("NOI"), which is a non-GAAP
financial measure commonly used in the REIT industry, as a supplemental
performance measure. We use NOI as a supplemental performance measure
because, when compared period over period, it captures trends in
occupancy rates, rental rates and operating costs. We also believe that,
as a widely recognized measure of the performance of REITs, NOI is used
by investors as a basis to evaluate REITs.

We calculate NOI as revenue less property operating expenses, each of
which are presented in the accompanying consolidated statements of
operations. Amortization of deferred leasing costs is presented in
depreciation and amortization, which is excluded from NOI. Marketing and
advertising costs are not property-specific, rather these costs support
our entire portfolio. As a result, we have excluded these marketing and
advertising costs from our NOI calculation, consistent with the
treatment of general and administrative costs, which also support our
entire portfolio. However, the utility of NOI as a measure of our
performance is limited. Other REITs may not calculate NOI in the same
manner. Accordingly, our NOI may not be comparable to others. Therefore,
NOI should be considered only as a supplement to revenue and to net
income (loss) presented in accordance with GAAP as a measure of our
performance. NOI should not be used as a measure of our liquidity or as
indicative of funds available to fund our cash needs, including our
ability to make distributions. NOI also should not be used as a
supplement to or substitute for cash flow from operating activities
computed in accordance with GAAP.

3Adjusted EBITDA is defined as net income (loss) as defined
by U.S. GAAP plus interest expense, income tax (benefit) expense,
depreciation and amortization, asset impairments and (gain) loss on
disposals, stock-based compensation, transaction and integration costs,
severance and management transition costs, new accounting standards and
systems implementation costs, lease exit costs, legal claim costs, loss
on early extinguishment of debt, unrealized (gain) on marketable equity
investments and other special items. Other companies may not calculate
Adjusted EBITDA in the same manner. Accordingly, the Company's Adjusted
EBITDA as presented may not be comparable to others.

4We use funds from operations ("FFO") and normalized funds
from operations ("Normalized FFO"), which are non-GAAP financial
measures commonly used in the REIT industry, as supplemental performance
measures. We use FFO and Normalized FFO as supplemental performance
measures because, when compared period over period, they capture trends
in occupancy rates, rental rates and operating costs. We also believe
that, as widely recognized measures of the performance of REITs, FFO and
Normalized FFO are used by investors as a basis to evaluate REITs. We
calculate FFO as net income (loss) computed in accordance with GAAP
before real estate depreciation and amortization and asset impairments
and gain or loss on disposal. While it is consistent with the definition
of FFO promulgated by the National Association of Real Estate Investment
Trusts ("NAREIT"), our computation of FFO may differ from the
methodology for calculating FFO used by other REITs. Accordingly, our
FFO may not be comparable to others.

We calculate Normalized FFO as FFO plus amortization of customer
relationship intangibles, transaction acquisition and other integration
costs, legal claim costs and lease exit costs, and other special items
including loss on early extinguishment of debt, new accounting standards
and system implementation costs, and severance and management transition
costs, as appropriate. Because the value of the customer relationship
intangibles is inextricably connected to the real estate acquired, the
Company believes the amortization of such intangibles and impairments of
such intangibles is analogous to real estate depreciation and
impairments; therefore, the Company adds the customer relationship
intangible amortization and impairments back for similar treatment with
real estate depreciation and impairments. The Company believes its
Normalized FFO calculation provides a comparable measure to that used by
others in the industry. Other REITs may not calculate Normalized FFO in
the same manner. Accordingly, our Normalized FFO may not be comparable
to others.

In addition, because FFO and Normalized FFO exclude real estate
depreciation and amortization and real estate impairments, and capture
neither the changes in the value of our properties that result from use
or from market conditions, nor the level of capital expenditures and
leasing commissions necessary to maintain the operating performance of
our properties, all of which have real economic effect and could
materially impact our results from operations, the utility of FFO and
Normalized FFO as measures of our performance is limited. Therefore, FFO
and Normalized FFO should be considered only as supplements to net
income (loss) presented in accordance with GAAP as measures of our
performance. FFO and Normalized FFO should not be used as measures of
our liquidity or as indicative of funds available to fund our cash
needs, including our ability to make distributions. FFO and Normalized
FFO also should not be used as supplements to or substitutes for cash
flow from operating activities computed in accordance with GAAP.

5Annualized GAAP revenue is equal to monthly recurring rent,
defined as average monthly contractual rent during the term of the lease
plus the monthly impact of installation charges, multiplied by 12. It
can be shown both inclusive and exclusive of the Company's estimate of
customer reimbursements for metered power.

6Recurring rent churn is calculated as any reduction in
recurring rent due to customer terminations, service reductions or net
pricing decreases as a percentage of rent at the beginning of the
period, excluding any impact from metered power reimbursements or other
usage-based billing.

7CSF leased is calculated by dividing CSF under signed leases
for available space (whether or not the contract has commenced billing)
by total CSF. CSF Leased differs from CSF Occupied presented in the Data
Center Portfolio table because the leased rate includes CSF for signed
leases that have not commenced billing.

8Stabilized properties include data halls that have been in
service for at least 24 months or are at least 85% leased.

9Gross asset value is defined as total assets plus
accumulated depreciation.

10Long-term debt and net debt exclude adjustments for
deferred financing costs and bond premiums. Net debt provides a useful
measure of liquidity and financial health. The Company defines net debt
as long-term debt and capital lease obligations, offset by cash and cash
equivalents.

11Liquidity is calculated as cash, cash equivalents, and
temporary cash investments on hand, plus the undrawn capacity on
CyrusOne's revolving credit facility and the delayed draw term loan.

About CyrusOne

CyrusOne (NASDAQ:CONE) is a high-growth real estate investment trust
(REIT) specializing in highly reliable enterprise-class, carrier-neutral
data center properties. The Company provides mission-critical data
center facilities that protect and ensure the continued operation of IT
infrastructure for approximately 1,000 customers, including 200 Fortune
1000 companies.

With a track record of meeting and surpassing the aggressive
speed-to-market demands of hyperscale cloud providers, as well as the
expanding IT infrastructure requirements of the enterprise, CyrusOne
provides the flexibility, reliability, security, and connectivity that
foster business growth. CyrusOne offers a tailored, customer
service-focused platform and is committed to full transparency in
communication, management, and service delivery throughout its 45 data
centers worldwide. Additional information about CyrusOne can be found at www.CyrusOne.com.

Company Profile

CyrusOne (NASDAQ:CONE) specializes in highly reliable enterprise-class,
carrier-neutral data center properties. The Company provides
mission-critical data center facilities that protect and ensure the
continued operation of IT infrastructure for approximately 1,000
customers, including 200 Fortune 1000 companies. CyrusOne's data center
offerings provide the flexibility, reliability, and security that
enterprise customers require and are delivered through a tailored,
customer service-focused platform designed to foster long-term
relationships. CyrusOne is committed to full transparency in
communication, management, and service delivery throughout its 45 data
centers worldwide.

  • Best-in-Class Sales Force
  • Flexible Solutions that Scale as Customers Grow
  • Massively Modular® Engineering with Data Hall Builds in 10-14 Weeks
  • Focus on Operational Excellence and Superior Customer Service
  • Proven Leading-Edge Technology Delivering Power Densities up to 900
    Watts per Square Foot
  • National IX Replicates Enterprise Data Center Architecture
 

Corporate Headquarters

   

Senior Management

2101 Cedar Springs Road, Ste. 900 Gary Wojtaszek, President and CEO     Robert Jackson, EVP General Counsel & Secretary
Dallas, Texas 75201 Diane Morefield, EVP & Chief Financial Officer John Hatem, EVP Design, Construction & Operations
Phone: (972) 350-0060 Kevin Timmons, EVP & Chief Technology Officer Blake Hankins, Chief Information Officer

Website: www.cyrusone.com

Tesh Durvasula, EVP & Chief Commercial Officer John Gould, EVP Global Sales
Jonathan Schildkraut, EVP & Chief Strategy Officer Brent Behrman, EVP Strategic Sales
Kellie Teal-Guess, EVP & Chief People Officer Howard Garfield, SVP & Chief Accounting Officer
 
 

Analyst Coverage

 

Firm

       

Analyst

       

Phone Number

Bank of America Merrill Lynch Michael J. Funk (646) 855-5664
Barclays Amir Rozwadowski (212) 526-4043
Citi Mike Rollins (212) 816-1116
Cowen and Company Colby Synesael (646) 562-1355
Credit Suisse Sami Badri (212) 538-1727
Deutsche Bank Vin Chao (212) 250-6799
Gabelli & Company Sergey Dluzhevskiy (914) 921-8355
Guggenheim Securities, LLC Robert Gutman (212) 518-9148
Jefferies Jonathan Petersen (212) 284-1705
J.P. Morgan Richard Choe (212) 622-6708
KeyBanc Capital Markets Jordan Sadler (917) 368-2280
MoffettNathanson Nick Del Deo, CFA (212) 519-0025
Morgan Stanley Simon Flannery (212) 761-6432
MUFG Securities Stephen Bersey (212) 405-7032
RBC Capital Markets Jonathan Atkin (415) 633-8589
Raymond James Frank G. Louthan IV (404) 442-5867
SunTrust Robinson Humphrey Greg Miller (212) 303-4169
UBS John C. Hodulik, CFA (212) 713-4226
Wells Fargo Eric Luebchow (312) 630-2386
William Blair Jim Breen, CFA (617) 235-7513
 
 

CyrusOne Inc.

Summary of Financial Data

(Dollars in millions, except per share amounts)

 
        Three Months    
March 31,     December 31,     March 31, Growth %
2018     2017     2017     Yr/Yr

Revenue

$ 196.6 $ 180.5 $ 149.3 32 %
Net operating income $ 128.8 $ 120.3 $ 97.0 33 %
Net income (loss) 43.5 2.8 (30.4 ) n/m
Funds from operations ("FFO") - NAREIT defined 110.2 65.4 18.3 n/m
Normalized Funds from Operations ("Normalized FFO") 82.2 78.4 61.2 34 %
Weighted average number of common shares outstanding - diluted 96.6 93.5 84.5 14 %
Income (loss) per share - basic and diluted $ 0.45 $ 0.03 $ (0.36 ) n/m
Normalized FFO per diluted common share $ 0.85 $ 0.84 $ 0.72 18 %
Adjusted EBITDA 109.5 104.2 80.7 36 %
Adjusted EBITDA as a % of Revenue 55.7 % 57.7 % 54.1 % 1.6 pts
 
        As of    
March 31,     December 31,     March 31, Growth %
2018     2017     2017     Yr/Yr
Balance Sheet Data
Gross investment in real estate $ 3,954.6 $ 3,840.8 $ 3,237.5 22 %
Accumulated depreciation (836.4 ) (782.4 ) (625.9 ) 34 %
Total investment in real estate, net 3,118.2 3,058.4 2,611.6 19 %
Cash and cash equivalents 228.7 151.9 20.4 n/m
Market value of common equity 5,066.4 5,723.1 4,515.2 12 %
Net debt 1,987.2 1,958.2 1,747.0 14 %
Total enterprise value 7,053.6 7,681.3 6,262.2 13 %
Net debt to LQA Adjusted EBITDA 4.5x 4.7x 5.0x (0.5)x
 
Dividend Activity
Dividends per share $ 0.46 $ 0.42 $ 0.42 10 %
 
Portfolio Statistics
Data centers 45 45 39 15 %
Stabilized CSF (000) 3,024 2,653 2,293 32 %
Stabilized CSF % leased 92 % 93 % 92 % 0 pts
Total CSF (000) 3,348 3,267 2,477 35 %
Total CSF % leased 86 % 83 % 88 % (2) pts
Total NRSF (000) 5,824 5,717 4,645 25 %
 
 

CyrusOne Inc.

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share amounts)

(Unaudited)

 
        Three Months  
Ended March 31, Change
2018     2017     $     %
Revenue:    
Lease and other revenues from customers $ 175.2 $ 134.2 $ 41.0 31 %
Metered power reimbursements 21.4     15.1     6.3     42 %
Revenue 196.6 149.3 47.3 32 %
Operating expenses:
Property operating expenses 67.8 52.3 15.5 30 %
Sales and marketing 5.3 4.9 0.4 8 %
General and administrative 19.3 15.8 3.5 22 %
Depreciation and amortization 74.6 55.7 18.9 34 %
Transaction, acquisition and other integration expenses 1.9     0.8     1.1     138 %
Total operating expenses 168.9     129.5     39.4     30 %
Operating income 27.7 19.8 7.9 40 %
Interest expense (20.8 ) (13.6 ) (7.2 ) 53 %
Unrealized gain on marketable equity investment 40.5 40.5 n/m
Loss on early extinguishment of debt (3.1 )   (36.2 )   33.1     n/m  
Net income (loss) before income taxes 44.3 (30.0 ) 74.3 n/m
Income tax expense (0.8 )   (0.4 )   (0.4 )   100 %
Net income (loss) $ 43.5     $ (30.4 )   $ 73.9     n/m  
Income (loss) per share - basic and diluted $ 0.45 $ (0.36 ) $ 0.81 n/m
 
 

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

 
        March 31,     December 31,     Change
2018     2017     $     %
Assets    
Investment in real estate:
Land $ 104.6 $ 104.6 $ n/m
Buildings and improvements 1,400.8 1,371.4 29.4 2 %
Equipment 1,959.5       1,813.9       145.6       8 %
Gross operating real estate 3,464.9 3,289.9 175.0 5 %
Less accumulated depreciation (836.4 )     (782.4 )     (54.0 )     7 %
Net operating real estate 2,628.5 2,507.5 121.0 5 %
Construction in progress, including land under development 435.3 487.1 (51.8 ) (11 )%
Land held for future development 54.4       63.8       (9.4 )     (15 )%
Total investment in real estate, net 3,118.2 3,058.4 59.8 2 %
Cash and cash equivalents 228.7 151.9 76.8 51 %
Rent and other receivables, net 93.1 87.2 5.9 7 %
Goodwill 455.1 455.1 %
Intangible assets, net 196.8 203.0 (6.2 ) (3 )%
Other assets 406.4       356.5       49.9       14 %
Total assets $ 4,498.3       $ 4,312.1       $ 186.2       4 %
Liabilities and equity
Long-term debt, net $ 2,178.3 $ 2,089.4 $ 88.9 4 %
Capital lease obligations 15.9 10.1 5.8 57 %
Lease financing arrangements 131.3 131.9 (0.6 ) %
Construction costs payable 89.0 115.5 (26.5 ) (23 )%
Accounts payable and accrued expenses 66.7 97.9 (31.2 ) (32 )%
Dividends payable 46.4 41.8 4.6 11 %
Deferred revenue and prepaid rents 116.1       111.6       4.5       4 %
Total liabilities 2,643.7       2,598.2       45.5       2 %
Equity:
Preferred stock, $.01 par value, 100,000,000 authorized; no shares
issued or outstanding
%

Common stock, $.01 par value, 500,000,000 shares authorized and
98,933,109 and 96,137,874

shares issued and outstanding at March 31, 2018 and December 31,
2017, respectively

1.0 1.0 n/m
Additional paid in capital 2,268.0 2,125.6 142.4 7 %
Accumulated deficit (413.1 ) (486.9 ) 73.8 (15 )%
Accumulated other comprehensive income (loss) (1.3 )     74.2       (75.5 )     %
Total stockholders' equity 1,854.6       1,713.9       140.7       8 %
Total liabilities and equity $ 4,498.3       $ 4,312.1       $ 186.2       4 %
 
 

CyrusOne Inc.

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share amounts)

(Unaudited)

 
For the three months ended:         March 31,     December 31,     September 30,     June 30,     March 31,
2018     2017     2017     2017     2017
Revenue:
Lease and other revenues from customers $ 175.2 $ 161.6 $ 155.5 $ 151.1 $ 134.2
Metered power reimbursements 21.4       18.9       19.8       15.8       15.1  
Revenue 196.6       180.5       175.3       166.9       149.3  
Operating expenses:
Property operating expenses 67.8 60.2 63.0 59.6 52.3
Sales and marketing 5.3 3.9 3.9 4.3 4.9
General and administrative 19.3 16.4 17.5 17.3 15.8
Depreciation and amortization 74.6 70.8 68.7 63.7 55.7
Transaction, acquisition and other integration expenses 1.9 5.3 4.1 1.7 0.8
Asset impairments             54.4       3.6        
Total operating expenses 168.9       156.6       211.6       150.2       129.5  
Operating income 27.7 23.9 (36.3 ) 16.7 19.8
Interest expense (20.8 ) (20.1 ) (17.9 ) (16.5 ) (13.6 )
Unrealized gain on marketable equity investment 40.5
Loss on early extinguishment of debt (3.1 )                 (0.3 )     (36.2 )
Net income (loss) before income taxes 44.3 3.8 (54.2 ) (0.1 ) (30.0 )
Income tax expense (0.8 )     (1.0 )     (0.9 )     (0.7 )     (0.4 )
Net income (loss) $ 43.5       $ 2.8       $ (55.1 )     $ (0.8 )     $ (30.4 )
Income (loss) per share - basic and diluted $ 0.45 $ 0.03 $ (0.61 ) $ (0.01 ) $ (0.36 )
 
 

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

 
        March 31,     December 31,     September 30,     June 30,     March 31,
2018     2017     2017     2017     2017
Assets
Investment in real estate:
Land $ 104.6 $ 104.6 $ 102.8 $ 94.0 $ 79.8
Buildings and improvements 1,400.8 1,371.4 1,344.0 1,291.7 1,270.9
Equipment 1,959.5       1,813.9       1,721.2       1,525.3       1,438.0  
Gross operating real estate 3,464.9 3,289.9 3,168.0 2,911.0 2,788.7
Less accumulated depreciation (836.4 )     (782.4 )     (722.1 )     (679.6 )     (625.9 )
Net operating real estate 2,628.5 2,507.5 2,445.9 2,231.4 2,162.8
Construction in progress, including land under development 435.3 487.1 429.4 569.1 399.2
Land held for future development 54.4       63.8       58.7       52.7       49.6  
Total investment in real estate, net 3,118.2       3,058.4       2,934.0       2,853.2       2,611.6  
Cash and cash equivalents 228.7 151.9 24.6 40.0 20.4
Rent and other receivables, net 93.1 87.2 89.2 88.7 83.7
Restricted cash 0.1 0.8 0.6
Goodwill 455.1 455.1 455.1 455.1 455.1
Intangible assets, net 196.8 203.0 209.7 216.3 223.1
Other assets 406.4       356.5       171.1       162.5       149.3  
Total assets $ 4,498.3       $ 4,312.1       $ 3,883.8       $ 3,816.6       $ 3,543.8  
Liabilities and equity
Long-term debt, net $ 2,178.3 $ 2,089.4 $ 2,013.7 $ 1,832.5 $ 1,731.8
Capital lease obligations 15.9 10.1 10.9 11.7 12.4
Lease financing arrangements 131.3 131.9 133.3 134.0 134.5
Construction costs payable 89.0 115.5 133.6 163.4 174.3
Accounts payable and accrued expenses 66.7 97.9 71.5 73.2 56.2
Dividends payable 46.4 41.8 39.6 39.4 37.7
Deferred revenue and prepaid rents 116.1       111.6       104.8       96.5       93.3  
Total liabilities 2,643.7       2,598.2       2,507.4       2,350.7       2,240.2  
Equity:
Preferred stock, $.01 par value, 100,000,000 authorized; no shares
issued or outstanding

Common stock, $.01 par value, 500,000,000 shares authorized and

98,933,109 and 96,137,874 shares issued and outstanding at March
31, 2018

and December 31, 2017, respectively

1.0 1.0 0.9 0.9 0.9
Additional paid in capital 2,268.0 2,125.6 1,826.0 1,821.9 1,620.5
Accumulated deficit (413.1 ) (486.9 ) (449.2 ) (355.7 ) (316.5 )
Accumulated other comprehensive loss (1.3 )     74.2       (1.3 )     (1.2 )     (1.3 )
Total stockholders' equity 1,854.6       1,713.9       1,376.4       1,465.9       1,303.6  
Total liabilities and equity $ 4,498.3       $ 4,312.1       $ 3,883.8       $ 3,816.6       $ 3,543.8  
 
 

CyrusOne Inc.

Condensed Consolidated Statements of Cash Flow

(Dollars in millions)

(Unaudited)

 
       

Three Months

Ended March 31,

2018

   

Three Months

Ended March 31,

2017

Cash flows from operating activities:    
Net income (loss) $ 43.5 $ (30.4 )
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation and amortization 74.6 55.7
Non-cash interest expense, net 0.7 0.9
Stock-based compensation expense 3.9 3.7
Provision for bad debt 0.5
Unrealized gain on marketable equity investment (40.5 )
Loss on early extinguishment of debt 3.1 36.2
Other 0.2
Change in operating assets and liabilities:
Rent and other receivables, net and other assets (18.0 ) (20.0 )
Accounts payable and accrued expenses (28.9 ) (6.8 )
Deferred revenue and prepaid rents 5.3       15.7  
Net cash provided by operating activities 44.2       55.2  
Cash flows from investing activities:
Capital expenditures – asset acquisitions, net of cash acquired (492.3 )
Capital expenditures – other development (145.2 )     (182.5 )
Net cash used in investing activities (145.2 )     (674.8 )
Cash flows from financing activities:
Issuance of common stock, net 142.9 211.0
Dividends paid (41.0 ) (32.4 )
Proceeds from debt, net 985.6 1,200.9
Payments on debt (902.7 ) (744.8 )
Payments on capital leases and lease financing arrangements (2.6 ) (2.3 )
Tax payment upon exercise of equity awards (4.4 )     (6.4 )
Net cash provided by financing activities 177.8       626.0  
Net increase (decrease) in cash, cash equivalents and restricted cash 76.8 6.4
Cash, cash equivalents and restricted cash at beginning of period 151.9       14.6  
Cash, cash equivalents and restricted cash at end of period $ 228.7       $ 21.0  
 
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized of $5.1 million
and $3.6 million in 2018 and 2017, respectively
$ 42.2 $ 18.3
Non-cash investing and financing activities:
Construction costs and other payables 89.0 174.3
Dividends payable 46.4 37.7
Real estate additions from entering into and modifying capital leases 6.6
Transfer of land held for future development to construction in
progress
9.4 4.0
Transfer of real estate to construction in progress from operating
real estate
178.7 305.3
 
 

CyrusOne Inc.

Net Operating Income and Reconciliation of Net Income (Loss) to
Adjusted EBITDA

(Dollars in millions)

(Unaudited)

 
        Three Months Ended         Three Months Ended
March 31, Change March 31,     December 31,     September 30,     June 30,     March 31,
2018     2017     $     %     2018     2017     2017     2017     2017
Net Operating Income        
Revenue $ 196.6 $ 149.3 $ 47.3 32% $ 196.6 $ 180.5 $ 175.3 $ 166.9 $ 149.3
Property operating expenses 67.8       52.3   15.5 30% 67.8       60.2       63.0       59.6       52.3  
Net Operating Income (NOI) $ 128.8       $ 97.0   $ 31.8 33% $ 128.8       $ 120.3       $ 112.3       $ 107.3       $ 97.0  
NOI as a % of Revenue 65.5 % 65.0 % 65.5 % 66.6 % 64.1 % 64.3 % 65.0 %
Reconciliation of Net Income (Loss) to Adjusted EBITDA:
Net income (loss) $ 43.5 $ (30.4 ) $ 73.9 n/m $ 43.5 $ 2.8 $ (55.1 ) $ (0.8 ) $ (30.4 )
Interest expense 20.8 13.6 7.2 53% 20.8 20.1 17.9 16.5 13.6
Income tax expense 0.8 0.4 0.4 100% 0.8 1.0 0.9 0.7 0.4
Depreciation and amortization 74.6 55.7 18.9 34% 74.6 70.8 68.7 63.7 55.7
Asset impairments and loss on disposals       0.2   (0.2 ) n/m       0.2       55.5       3.6       0.2  
EBITDA (NAREIT definition)(a) $ 139.7       $ 39.5   100.2 n/m $ 139.7       $ 94.9       $ 87.9       $ 83.7       $ 39.5  
 
Transaction, acquisition and other integration expenses 1.9 0.6 1.3 n/m 1.9 5.1 3.0 1.7 0.6
Legal claim costs 0.2 0.2 n/m 0.2 0.3 0.6 0.2
Stock-based compensation expense 3.9 3.7 0.2 5% 3.9 3.1 3.9 4.0 3.7
Severance and management transition costs 0.7 0.5 0.2 40% 0.7 0.5
Loss on early extinguishment of debt 3.1 36.2 (33.1 ) n/m 3.1 0.3 36.2
New accounting standards and system implementation costs 0.5 0.5 n/m 0.5 1.1 0.8 0.5
Unrealized gain on marketable equity investments (40.5 )       (40.5 ) n/m (40.5 )                        
Adjusted EBITDA $ 109.5       $ 80.7   28.8 36% $ 109.5       $ 104.2       $ 95.9       $ 90.8       $ 80.7  
Adjusted EBITDA as a % of Revenue 55.7 % 54.1 % 55.7 % 57.7 % 54.7 % 54.4 % 54.1 %
 
(a)   We calculate Earnings Before Interest, Taxes, Depreciation and
Amortization for Real Estate (EBITDAre) as GAAP net income (loss)
plus interest expense, income tax expense, depreciation and
amortization plus or minus losses and gains on the disposition of
depreciable property, plus asset impairments. While it is consistent
with the definition of EBITDAre promulgated by the National
Association of Real Estate Investment Trusts ("NAREIT"), our
computation of EBITDAre may differ from the methodology for
calculating EBITDAre used by other REITs. Accordingly, our EBITDAre
may not be comparable to others.
 
 

CyrusOne Inc.

Reconciliation of Net Income (Loss) to Net Operating Income

(Dollars in millions)

(Unaudited)

 
        Three Months Ended    
March 31, Change
2018     2017     $     %
Net Income (Loss) $ 43.5     $ (30.4 ) $ 73.9     (243 )%
Sales and marketing 5.3 4.9 0.4 8 %
General and administrative 19.3 15.8 3.5 22 %
Depreciation and amortization 74.6 55.7 18.9 34 %
Transaction, acquisition and other integration expenses 1.9 0.8 1.1 138 %
Interest expense 20.8 13.6 7.2 53 %
Unrealized gain on marketable equity securities (40.5 ) (40.5 ) n/m
Loss on early extinguishment of debt 3.1 36.2 (33.1 ) (91 )%
Income tax expense 0.8       0.4       0.4       100 %
Net Operating Income $ 128.8       $ 97.0       $ 31.8       33 %
 
 

CyrusOne Inc.

Reconciliation of Net Income (Loss) to FFO and Normalized FFO

(Dollars in millions)

(Unaudited)

 
        Three Months Ended         Three Months Ended
March 31, Change March 31,     December 31,     September 30,     June 30,     March 31,
2018     2017     $     %     2018     2017     2017     2017     2017
Reconciliation of Net Income (Loss) to FFO and Normalized FFO:        
Net income (loss) $ 43.5 $ (30.4 ) $ 73.9 n/m $ 43.5 $ 2.8 $ (55.1 ) $ (0.8 ) $ (30.4 )
Real estate depreciation and amortization 66.7 48.7 18.0 37 % 66.7 62.6 60.3 55.3 48.7
Asset impairments         n/m             54.4       3.6        
Funds from Operations ("FFO") - NAREIT defined $ 110.2 $ 18.3 $ 91.9 n/m $ 110.2 $ 65.4 $ 59.6 $ 58.1 $ 18.3
 
Loss on early extinguishment of debt 3.1 36.2 (33.1 ) n/m 3.1 0.3 36.2
Unrealized gain on marketable equity investments (40.5 ) (40.5 ) n/m (40.5 )
New accounting standards and system implementation costs 0.5 0.5 n/m 0.5 1.1 0.8 0.5
Amortization of customer relationship intangibles 6.1 5.2 0.9 17 % 6.1 6.6 6.6 6.7 5.2
Transaction, acquisition and other integration expenses 1.9 0.8 1.1 138 % 1.9 5.3 4.1 1.7 0.8
Severance and management transition costs 0.7 0.5 0.2 40 % 0.7 0.5
Legal claim costs 0.2       0.2   n/m 0.2             0.3       0.6       0.2  
Normalized Funds from Operations (Normalized FFO) $ 82.2       $ 61.2   $ 21.0 34 % $ 82.2       $ 78.4       $ 71.4       $ 67.9       $ 61.2  
Normalized FFO per diluted common share $ 0.85 $ 0.72 $ 0.13 18 % $ 0.85 $ 0.84 $ 0.79 $ 0.77 $ 0.72
Weighted average diluted common shares outstanding 96.6 84.5 12.1 14 % 96.6 93.5 90.9 88.5 84.5
 
Additional Information:
Amortization of deferred financing costs and bond premium 0.7 1.0 (0.3 ) (30 )% 0.7 0.9 1.2 1.2 1.0
Stock-based compensation expense 3.9 3.7 0.2 5 % 3.9 3.1 3.9 4.0 3.7
Non-real estate depreciation and amortization 1.8 1.8 n/m 1.8 1.6 1.8 1.7 1.8
Straight line rent adjustments(a) (7.2 ) (9.7 ) 2.5 (26 )% (7.2 ) (7.4 ) (6.4 ) (8.8 ) (9.7 )
Deferred revenue, primarily installation revenue(b) 3.2 0.3 2.9 n/m 3.2 3.8 12.9 6.1 0.3
Leasing commissions (3.2 ) (3.9 ) 0.7 (18 )% (3.2 ) (3.5 ) (6.1 ) (3.8 ) (3.9 )
Recurring capital expenditures (2.4 ) (1.5 ) (0.9 ) 60 % (2.4 ) (1.6 ) (0.6 ) (0.7 ) (1.5 )
 
(a)  

Straight line rent adjustments:

Represents the difference between revenue recognized on a straight
line basis under U.S. GAAP over the term of the lease compared to
the contractual rental payments. Lease agreements typically include
payments that escalate over the term of the contract or, to a lesser
extent, a ramp period.
 
(b)

Deferred revenue, primarily installation revenue:

Represents payments received from customers in excess of revenue
recognized under U.S. GAAP. This primarily relates to specific
customer-requested buildouts that CyrusOne does not include in its
basic data center design. The company charges customers up front for
these buildouts rather than incorporating into rent and billing them
over time. The cash payments for these buildouts are non-recurring,
and may vary significantly from quarter to quarter, but revenue is
amortized over the life of the lease.
 
 

CyrusOne Inc.

Market Capitalization Summary, Reconciliation of Net Debt, and
Debt Schedule

(Unaudited)

 

Market Capitalization

(dollars in millions)         Shares or

Equivalents

Outstanding

    Market Price

as of

March 31, 2018

    Market Value

Equivalents

(in millions)

Common shares 98,933,109     $ 51.21     $ 5,066.4
Net Debt 1,987.2
Total Enterprise Value (TEV) $ 7,053.6
 

Reconciliation of Net Debt

 
        March 31,     December 31,
(dollars in millions) 2018     2017
Long-term debt(a) $ 2,200.0 $ 2,100.0
Capital lease obligations 15.9 10.1
Less:
Cash and cash equivalents (228.7 )     (151.9 )
Net Debt $ 1,987.2       $ 1,958.2  
 

(a)  Excludes adjustment for deferred financing costs.

 

Debt Schedule (as of
March 31, 2018)

 
(dollars in millions)                
Long-term debt: Amount     Interest Rate     Maturity Date
Revolving credit facility $ L + 145bps March 2023(a)
Term loan 700.0 3.28% March 2023
Term loan 300.0 3.58% March 2025
5.000% senior notes due 2024, excluding bond premium 700.0 5.000% March 2024
5.375% senior notes due 2027, excluding bond premium 500.0       5.375%     March 2027
Total long-term debt(b) $ 2,200.0   4.34%
 
Weighted average term of debt:

6.5 years

 

(a)  Assuming exercise of one-year extension option.

(b)  Excludes adjustment for deferred financing costs.

 

Interest Summary

        Three Months Ended    
March 31,     December 31,     March 31, Growth %
(dollars in millions) 2018     2017     2017     Yr/Yr
Interest expense and fees $ 25.2 $ 23.8 $ 16.2 56 %
Amortization of deferred financing costs and bond premium 0.7 0.9 1.0 (30 )%
Capitalized interest (5.1 )     (4.6 )     (3.6 ) 42 %
Total interest expense $ 20.8       $ 20.1       $ 13.6   53 %
 
 

CyrusOne Inc.

Colocation Square Footage (CSF) and CSF Leased

(Unaudited)

 
        As of March 31, 2018     As of December 31, 2017     As of March 31, 2017

Market

Colocation

Space (CSF)(a) (000)

   

CSF

Leased(b)

   

Colocation

Space (CSF)(a) (000)

   

CSF

Leased(b)

   

Colocation

Space (CSF)(a) (000)

   

CSF

Leased(b)

Northern Virginia 673     94 %     640     79 %     357     100 %
Dallas 555 81 % 506 85 % 431 87 %
Phoenix 509 91 % 509 91 % 216 100 %
Cincinnati 404 92 % 404 91 % 387 91 %
Houston 308 74 % 308 74 % 308 74 %
San Antonio 273 100 % 273 88 % 240 100 %
New York Metro 218 83 % 218 82 % 218 83 %
Chicago 213 67 % 213 64 % 136 86 %
Austin 106 73 % 106 67 % 106 59 %
Raleigh-Durham 76 88 % 76 88 % 65 80 %
International 13       76 %     13       76 %     13       74 %
Total 3,348       86 %     3,267       83 %     2,477       88 %
Stabilized Properties(c) 3,024       92 %     2,653       93 %     2,293       92 %
 
(a)   CSF represents the NRSF at an operating facility that is currently
leased or readily available for lease as colocation space, where
customers locate their servers and other IT equipment.
(b) CSF Leased is calculated by dividing CSF under signed leases for
colocation space (whether or not the lease has commenced billing) by
total CSF.
(c) Stabilized properties include data halls that have been in service
for at least 24 months or are at least 85% leased.
 
 

CyrusOne Inc.

2018 Guidance

     

Category

2018
Guidance(1)

Total Revenue $810 - 825 million
Lease and Other Revenues from Customers $735 - 745 million
Metered Power Reimbursements $75 - 80 million
Adjusted EBITDA $460 - 470 million
Normalized FFO per diluted common share $3.18 - 3.28
Capital Expenditures $850 - 900 million
Development $845 - 890 million
Recurring $5 - 10 million
 
(1) Full year 2018 guidance includes the impact of the Zenium
acquisition, which is expected to close in May 2018. Development
capital expenditures include the acquisition of land for future
development.

The annual guidance provided above represents forward-looking
statements, which are based on current economic conditions, internal
assumptions about the Company's existing customer base and the supply
and demand dynamics of the markets in which CyrusOne operates.

CyrusOne does not provide reconciliations for the non-GAAP financial
measures included in the annual guidance provided above due to the
inherent difficulty in forecasting and quantifying certain amounts that
are necessary for such reconciliations, including net income (loss) and
adjustments that could be made for transaction and acquisition
integration costs, legal claim costs, lease exit costs, asset
impairments and loss on disposals and other charges in its
reconciliation of historic numbers, the amount of which, based on
historical experience, could be significant.

                                           

CyrusOne Inc.

Data Center Portfolio

As of March 31, 2018

(Unaudited)

 
Operating Net Rentable Square Feet (NRSF)(a)

Powered
Shell
Available
for
Future

Development
(NRSF)(k)

(000)

Available
Critical
Load

Capacity

(MW)(l)

Stabilized Properties(b)     Metro
Area
   

Annualized
Rent(c)

($000)

   

Colocation
Space
(CSF)(d)

(000)

   

CSF
Occupied(e)

   

CSF
Leased(f)

   

Office &
Other(g)

(000)

   

Office &
Other
Occupied(h)

   

Supporting
Infrastructure(i)
(000)

   

Total(j)
(000)

       
Dallas - Carrollton Dallas $ 70,766 305 89 % 90 % 66 63 % 111 482 16 38
Houston - Houston West I Houston 43,053 112 96 % 96 % 11 99 % 37 161 3 28
Dallas - Lewisville* Dallas 34,705 114 93 % 93 % 11 95 % 54 180 21
Cincinnati - 7th Street*** Cincinnati 34,475 197 93 % 94 % 6 100 % 175 378 46 16
Northern Virginia - Sterling II Northern Virginia 33,337 159 100 % 100 % 9 100 % 55 223 30
Somerset I New York Metro 29,300 97 88 % 88 % 27 85 % 89 213 2 11
Chicago - Aurora I Chicago 28,034 113 96 % 96 % 34 100 % 223 371 27 71
San Antonio III San Antonio 27,148 132 100 % 100 % 9 100 % 43 184 24
Totowa - Madison** New York Metro 25,798 51 89 % 89 % 22 100 % 59 133 6
Cincinnati - North Cincinnati Cincinnati 24,319 65 98 % 98 % 45 75 % 53 163 65 14
Houston - Houston West II Houston 22,874 80 87 % 87 % 4 88 % 55 139 11 12
San Antonio I San Antonio 22,684 44 100 % 100 % 6 83 % 46 96 11 12
Wappingers Falls I** New York Metro 22,448 37 86 % 91 % 20 99 % 15 72 3
Phoenix - Chandler II Phoenix 19,956 74 100 % 100 % 6 38 % 26 105 12
Phoenix - Chandler I Phoenix 18,331 74 100 % 100 % 35 12 % 39 147 31 16
Northern Virginia - Sterling I Northern Virginia 18,311 78 100 % 100 % 6 77 % 49 132 12
Raleigh-Durham I Raleigh-Durham 17,877 76 88 % 88 % 13 100 % 82 171 246 12
Phoenix - Chandler III Phoenix 17,344 68 100 % 100 % 2 % 30 101 14
Houston - Galleria Houston 16,696 63 61 % 61 % 23 51 % 25 112 14
Austin II Austin 15,234 44 95 % 95 % 2 100 % 22 68 5
Northern Virginia - Sterling III Northern Virginia 15,184 79 100 % 100 % 7 100 % 34 120 15
San Antonio II San Antonio 14,310 64 100 % 100 % 11 100 % 41 117 12
Northern Virginia - Sterling V Northern Virginia 13,394 276 59 % 85 % 9 100 % 121 405 244 33
Florence Cincinnati 13,276 53 99 % 99 % 47 87 % 40 140 9
Phoenix - Chandler VI Phoenix 12,277 148 94 % 94 % 5 100 % 32 185 10 24
Phoenix - Chandler IV Phoenix 11,222 73 100 % 100 % 3 100 % 27 103 12
Cincinnati - Hamilton* Cincinnati 11,176 47 76 % 76 % 1 100 % 35 83 10
Austin III Austin 10,769 62 52 % 58 % 15 83 % 21 98 67 6
London - Great Bridgewater** International 6,015 10 94 % 94 % % 1 11 1
Northern Virginia - Sterling IV Northern Virginia 5,774 81 100 % 100 % 7 100 % 34 122 15
Dallas - Midway** Dallas 5,357 8 100 % 100 % % 8 1
Stamford - Riverbend** New York Metro 5,149 20 23 % 23 % % 8 28 2
Cincinnati - Mason Cincinnati 5,087 34 100 % 100 % 26 98 % 17 78 4
Norwalk I** New York Metro 3,797 13 93 % 100 % 4 72 % 41 58 87 2
Dallas - Marsh** Dallas 2,570 4 100 % 100 % % 4 1
Chicago - Lombard Chicago 2,325 14 73 % 73 % 4 100 % 12 30 29 3
Stamford - Omega** New York Metro 1,238 % % 19 84 % 4 22
Cincinnati - Blue Ash* Cincinnati 630 6 36 % 36 % 7 100 % 2 15 1
Totowa - Commerce** New York Metro 569 % % 20 38 % 6 26
South Bend - Crescent* Chicago 541 3 40 % 40 % % 5 9 11 1
Houston - Houston West III Houston 507 % % 10 100 % 11 21 209
Singapore - Inter Business Park** International 376 3 22 % 22 % % 3 1
South Bend - Monroe Chicago 142 6 23 % 23 % % 6 13 4 1
Cincinnati - Goldcoast Cincinnati 13 3 % % 5 % 16 24 14 1
San Antonio IV San Antonio       33     %     100 %     4     %     27     64           6
Stabilized Properties - Total $ 684,384     3,024     88 %     92 %     562     78 %     1,830     5,416     1,133       518
 
CyrusOne Inc.
Data Center Portfolio
As of
March 31, 2018

(Unaudited)
                                           
Operating Net Rentable Square Feet (NRSF)(a)

Powered
Shell
Available
for
Future

Development
(NRSF)(k)

(000)

Available
Critical
Load

Capacity

(MW)(l)

Metro
Area

   

Annualized
Rent(c)

($000)

   

Colocation
Space
(CSF)(d)

(000)

   

CSF
Occupied(e)

   

CSF
Leased(f)

   

Office &
Other(g)

(000)

   

Office &
Other
Occupied(h)

   

Supporting
Infrastructure(i)

(000)

   

Total(j)
(000)

       
Stabilized Properties - Total $ 684,384 3,024 88 % 92 % 562 78 % 1,830 5,416 1,133 518
 

Pre-Stabilized Properties(b)

Dallas - Carrollton (DH #6) Dallas 4,442 75 62 % 62 % % 21 96 6
Houston - Houston West III (DH #1) Houston 3,633 53 22 % 23 % % 21 74 6
Phoenix - Chandler V Phoenix 3,116 72 50 % 50 % 1 50 % 16 89 94 6
Chicago - Aurora II (DH #1) Chicago 311 77 23 % 26 % 10 % 14 101 272 16
Dallas - Carrollton (DH #7) Dallas       48     %     21 %         %         48         6
All Properties - Total $ 695,885     3,348     83 %     86 %     573     78 %     1,903     5,824     1,499     567
 
* Indicates properties in which we hold a leasehold interest in the
building shell and land. All data center infrastructure has been
constructed by us and is owned by us.
** Indicates properties in which we hold a leasehold interest in the
building shell, land, and all data center infrastructure.
*** The information provided for the Cincinnati - 7th Street property
includes data for two facilities, one of which we lease and one of
which we own.
(a)   Represents the total square feet of a building under lease or
available for lease based on engineers' drawings and estimates but
does not include space held for development or space used by
CyrusOne.
(b) Stabilized properties include data halls that have been in service
for at least 24 months or are at least 85% leased. Pre-stabilized
properties include data halls that have been in service for less
than 24 months and are less than 85% leased.
(c) Represents monthly contractual rent (defined as cash rent including
customer reimbursements for metered power) under existing customer
leases as of March 31, 2018, multiplied by 12. For the month of
March 2018, customer reimbursements were $80.6 million annualized
and consisted of reimbursements by customers across all facilities
with separately metered power. Customer reimbursements under leases
with separately metered power vary from month-to-month based on
factors such as our customers' utilization of power and the
suppliers' pricing of power. From April 1, 2016 through March 31,
2018, customer reimbursements under leases with separately metered
power constituted between 10.2% and 12.6% of annualized rent. After
giving effect to abatements, free rent and other straight-line
adjustments, our annualized effective rent as of March 31, 2018 was
$707.7 million. Our annualized effective rent was greater than our
annualized rent as of March 31, 2018 because our positive
straight-line and other adjustments and amortization of deferred
revenue exceeded our negative straight-line adjustments due to
factors such as the timing of contractual rent escalations and
customer prepayments for services.
(d) CSF represents the NRSF at an operating facility that is currently
leased or readily available for lease as colocation space, where
customers locate their servers and other IT equipment.
(e) Percent occupied is determined based on CSF billed to customers
under signed leases as of March 31, 2018 divided by total CSF.
Leases signed but that have not commenced billing as of March 31,
2018 are not included.
(f) Percent leased is calculated by dividing CSF under signed leases for
colocation space (whether or not the lease has commenced billing) by
total CSF.
(g) Represents the NRSF at an operating facility that is currently
leased or readily available for lease as space other than CSF, which
is typically office and other space.
(h) Percent occupied is determined based on Office & Other space being
billed to customers under signed leases as of March 31, 2018 divided
by total Office & Other space. Leases signed but not commenced as of
March 31, 2018 are not included.
(i) Represents infrastructure support space, including mechanical,
telecommunications and utility rooms, as well as building common
areas.
(j) Represents the NRSF at an operating facility that is currently
leased or readily available for lease. This excludes existing vacant
space held for development.
(k) Represents space that is under roof that could be developed in the
future for operating NRSF, rounded to the nearest 1,000.
(l) Critical load capacity represents the aggregate power available for
lease and exclusive use by customers expressed in terms of
megawatts. The capacity reported is for non-redundant megawatts, as
we can develop flexible solutions to our customers at multiple
resiliency levels. Does not sum to total due to rounding.
                                           

CyrusOne Inc.

NRSF Under Development

As of March 31, 2018

(Dollars in millions)

(Unaudited)

 
NRSF Under Development(a) Under Development Costs
Facilities Metropolitan

Area

   

Estimated
Completion
Date

   

Colocation
Space
(CSF)

(000)

   

Office &
Other
(000)

   

Supporting
Infrastructure
(000)

   

Powered
Shell(b)

(000)

    Total (000)    

Critical
Load MW
Capacity(c)

   

Actual
to
Date(d)

   

Estimated

Costs to

Completion(e)

    Total
Somerset II New York Metro 2Q'18 210 210 $ 23 $ 1-2 $ 24-25
Northern Virginia - Sterling V Northern Virginia 2Q'18 26 17 43 12.0 47-52 47-52
Dallas - Allen Dallas 2Q'18 79 27 60 175 341 6.0 27 31-37 58-64
Phoenix - Chandler V Phoenix 2Q'18 6.0 18-20 18-20
Dallas - Carrollton Dallas 3Q'18 6.0 17-19 17-19
San Antonio IV San Antonio 3Q'18 27 8 35 6.0 15-17 15-17
Northern Virginia - Sterling VI Northern Virginia 3Q'18 359 359 73-77 73-77
Aurora II Chicago 3Q'18       35             35                 8-9       8-9
Total 132       70     77     744     1,023     36.0     $ 50     $ 210-233     $ 260-283
 
(a) Represents NRSF at a facility for which activities have commenced or
are expected to commence in the next 2 quarters to prepare the space
for its intended use. Estimates and timing are subject to change.
(b) Represents NRSF under construction that, upon completion, will be
powered shell available for future development into operating NRSF.
(c)

Critical load capacity represents the aggregate power available
for lease and exclusive use by customers expressed in terms of
megawatts. The capacity reported is for non-

redundant megawatts, as we can develop flexible solutions to our
customers at multiple resiliency levels.

(d) Actual to date is the cash investment as of March 31, 2018. There
may be accruals above this amount for work completed, for which cash
has not yet been paid.
(e) Represents management's estimate of the total costs required to
complete the current NRSF under development. There may be an
increase in costs if customers require greater power density.
     

CyrusOne Inc.

Land Available for Future Development (Acres)

As of March 31, 2018

(Unaudited)

 
As of
Market       March 31, 2018
Atlanta 44
Austin 22
Chicago 23
Cincinnati 98
Dallas 33
Houston 20
International
New York Metro
Northern Virginia
Phoenix 39
Quincy, Washington 48
Raleigh-Durham
San Antonio
Total Available 327
Book Value of Total Available $54 million
                             

CyrusOne Inc.

Leasing Statistics - Lease Signings

As of March 31, 2018

(Unaudited)

 
Period      

Number
of Leases(a)

     

Total CSF
Signed(b)

     

Total kW
Signed(c)

     

Total MRR
Signed (000)(d)

     

Weighted
Average
Lease Term(e)

1Q'18(f) 439 226,000 29,364 $3,370 77
Prior 4Q Avg. 434 130,250 14,591 $2,198 80
4Q'17 395 86,000 8,600 $1,463 61
3Q'17 411 151,000 14,830 $2,228 68
2Q'17 451 136,000 16,673 $2,467 86
1Q'17 480 148,000 18,259 $2,632 103
   
(a) Number of leases represents each agreement with a customer. A lease
agreement could include multiple spaces, and a customer could have
multiple leases.
(b) CSF represents the NRSF at an operating facility that is leased as
colocation space, where customers locate their servers and other IT
equipment.
(c) Represents maximum contracted kW that customers may draw during
lease period. Additionally, we can develop flexible solutions for
our customers at multiple resiliency levels, and the kW signed is
unadjusted for this factor.
(d) Monthly recurring rent is defined as the average monthly contractual
rent during the term of the lease. It includes the monthly impact of
installation charges of approximately $0.2 million in 2Q'17-1Q'18
and $0.1 million in each of the other quarters.
(e) Calculated on a CSF-weighted basis.
(f) Excludes leasing from Zenium.
                               

CyrusOne Inc.

New MRR Signed - Existing vs. New Customers

As of March 31, 2018

(Dollars in thousands)

(Unaudited)

 
New MRR(a) Signed ($000)
 
2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18(b)
Existing Customers $ 4,406 $ 1,796 $ 1,332 $ 2,247 $ 2,322 $ 1,418 $ 1,063 $ 3,149
New Customers $ 460   $ 454   $ 258   $ 385   $ 145   $ 810   $ 400   $ 221  
Total $ 4,866 $ 2,250 $ 1,590 $ 2,632 $ 2,467 $ 2,228 $ 1,463 $ 3,370
 
% from Existing Customers 91 % 80 % 84 % 85 % 94 % 64 % 73 % 93 %
 
(a) Monthly recurring rent is defined as the average monthly contractual
rent during the term of the lease. It includes the monthly impact of
installation charges of approximately $0.2 million in 2Q'17-1Q'18
and $0.1 million in each of the other quarters.
(b) Excludes leasing from Zenium.
 

CyrusOne Inc.

Customer Sector Diversification(a)

As of March 31, 2018

(Unaudited)

                 
Principal Customer Industry     Number of
Locations