4Q’18 Year-over-Year Revenue Growth of 23%
Record Leasing Year with $153 Million in
Annualized GAAP Revenue Signed, up 45% vs. 2017
CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT,
today announced fourth quarter and full year 2018 earnings.
Highlights
Category
4Q’18
% Changevs. 4Q’17
FY’18
% Changevs. FY’17
Revenue $221.3 million 23% $821.4 million 22% Net income / (loss)
$(105.8) million n/m $1.2 million n/m Adjusted EBITDA $121.2
million 16% $452.1 million 22% Normalized FFO $90.9 million 16%
$332.3 million 19% Net income / (loss) per diluted share
$(1.00) n/m $- n/m Normalized FFO per diluted share $0.86 2% $3.31
6%
•
Leased 7 megawatts (“MW”) and 41,000 colocation square feet
(“CSF”) in the fourth quarter, totaling $20 million in annualized
GAAP revenue
-- For full year 2018, signed more than
1,900 leases totaling 103 MW and 686,000 CSF, representing $153
million in annualized GAAP revenue, all of which were full year
company records
•
Backlog of $54 million in annualized GAAP revenue as of the end of
the fourth quarter, representing nearly $550 million in total
contract value
•
Added three Fortune 1000 companies as new customers, increasing the
total number of Fortune 1000 customers to 211 as of the end of the
quarter
•
Acquired approximately 16 acres of land for development of a campus
at PolanenPark location near the Amsterdam metropolitan area with
up to 72 MW of power capacity
-- Subsequent to the end of the quarter,
acquired 22 acres of land in San Antonio with up to 120 MW of power
capacity and 8 acres of land in Santa Clara with up to 48 MW of
power capacity to support growth in those markets
•
Announced a $12 million investment in exchange for a 10% equity
interest in ODATA Brasil S.A. and ODATA Colombia S.A.S.
(collectively “ODATA”), a leading data center provider in Brazil,
the largest and fastest-growing data center market in Latin America
•
Completed settlement of forward sale
agreement, issuing 2.5 million shares of common stock in exchange
for net proceeds of approximately $148 million“
“2018 was a tremendous year with continued strong growth, record
leasing that was up nearly 50% over 2017, expansion of our
portfolio to the West Coast and into Europe, and the development of
a solution for our customers in Brazil,” said Gary Wojtaszek,
president and chief executive officer of CyrusOne. “We are working
hard to position the company to better serve our customers around
the world, capitalizing on the significant value creation
opportunity ahead of us and delivering strong growth in the coming
years in what is still a very early stage for the industry.”
Fourth Quarter 2018 Financial Results
Revenue was $221.3 million for the fourth quarter, compared to
$180.5 million for the same period in 2017, an increase of 23%. The
increase in revenue was driven primarily by a 24% increase in
occupied CSF from organic growth and the Zenium acquisition, as
well as additional interconnection services.
Net loss was $(105.8) million for the fourth quarter, compared
to net income of $2.8 million in the same period in 2017. Net loss
for the fourth quarter included a $(96.7) million unrealized loss
on the Company’s equity investment in GDS Holdings Limited (“GDS”),
a leading data center provider in China, due to a decrease in GDS’s
share price during the quarter. Net loss per diluted common share1
was $(1.00) in the fourth quarter of 2018, compared to net income
of $0.03 per diluted common share in the same period in 2017.
Net operating income (NOI)2 was $143.3 million for the fourth
quarter, compared to $120.3 million in the same period in 2017, an
increase of 19%. Adjusted EBITDA3 was $121.2 million for the fourth
quarter, compared to $104.2 million in the same period in 2017, an
increase of 16%.
Normalized Funds From Operations (Normalized FFO)4 was $90.9
million for the fourth quarter, compared to $78.4 million in the
same period in 2017, an increase of 16%. Normalized FFO per diluted
common share was $0.86 in the fourth quarter of 2018, an increase
of 2% over fourth quarter 2017.
Leasing Activity
CyrusOne leased approximately 7 MW of power and 41,000 CSF in
the fourth quarter, representing $1.7 million in monthly recurring
rent, inclusive of the monthly impact of installation charges, or
approximately $20.1 million in annualized GAAP revenue5, excluding
estimates for pass-through power. The weighted average lease term
of the new leases, based on square footage, is 73 months (6.1
years), and the weighted average remaining lease term of CyrusOne’s
portfolio is 57 months (taking into account the impact of the
backlog). Recurring rent churn6 for the fourth quarter was 0.8%,
compared to 1.1% for the same period in 2017.
Portfolio Development and CSF Leased
In the fourth quarter, the Company completed construction on
144,000 CSF and 52 MW of power capacity across six projects in
Northern Virginia, Dallas, the New York Metro area, Frankfurt, and
London. CSF leased7 as of the end of the fourth quarter was 92% for
stabilized properties8 and 88% overall. In addition, the Company
has development projects underway in Northern Virginia, Dallas, the
New York Metro area, Raleigh-Durham, Phoenix, Austin, Frankfurt,
London, and Amsterdam that are expected to add approximately
439,000 CSF and 126 MW of power capacity.
Balance Sheet and Liquidity
As of December 31, 2018, the Company had gross asset value9
totaling approximately $6.6 billion, an increase of approximately
30% over gross asset value as of December 31, 2017. CyrusOne had
$2.64 billion of long-term debt10, $64.4 million of cash and cash
equivalents, and $1.55 billion available under its unsecured
revolving credit facility as of December 31, 2018. Net debt10 was
$2.61 billion as of December 31, 2018, representing approximately
31% of the Company's total enterprise value as of December 31, 2018
of $8.3 billion, or 5.4x Adjusted EBITDA for the last quarter
annualized. Available liquidity11 was $1.61 billion as of December
31, 2018.
Dividend
On October 30, 2018, the Company announced a dividend of $0.46
per share of common stock for the fourth quarter of 2018. The
dividend was paid on January 11, 2019, to stockholders of record at
the close of business on January 2, 2019.
Additionally, today the Company is announcing a dividend of
$0.46 per share of common stock for the first quarter of 2019. The
dividend will be paid on April 12, 2019, to stockholders of record
at the close of business on March 29, 2019.
Guidance
CyrusOne is issuing guidance for full year 2019. 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 forward-looking guidance for GAAP
financial measures (other than Revenue and Capital Expenditures) or
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, acquisition, integration and
other related expenses, legal claim 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
Results
2018 Results
Adjustedfor ASC 842(1)
2019
Guidance
Total Revenue $821 million $821 million $960 - 1,000 million Lease
and Other Revenues from Customers $717 million $717 million $835 -
865 million Metered Power Reimbursements $104 million $104 million
$125 - 135 million Adjusted EBITDA $452 million $435 million $500 -
525 million Normalized FFO per diluted common share $3.31 $3.22
$3.10 - 3.20 Capital Expenditures $866 million $866 million $950 -
1,100 million Development(2) $855 million $855 million $940 - 1,085
million Recurring $11 million $11 million $10 - 15 million
(1)
ASC 842 refers to Accounting Standards
Codification Topic 842 - Leases, issued by the Financial Accounting
Standards Board to increase transparency and comparability among
organizations by recognizing lease assets and lease liabilities on
the balance sheet and disclosing key information about leasing
transactions. The Company is adopting ASC 842 effective January 1,
2019. The adjusted 2018 results have not been prepared in
accordance with GAAP and represent the Company’s estimates as if
the standard had been adopted as of January 1, 2018. Adjusted
EBITDA for 2018 decreased by $17 million due to higher operating
lease expense. Normalized FFO per diluted common share decreased by
$0.09 due to higher operating lease expense, partially offset by
lower interest expense. The adjusted 2018 results are being shown
solely for comparative and investor usefulness purposes with
respect to the Company’s 2019 guidance.
(2) Development capital expenditures include the acquisition of
land for future development.
Upcoming Conferences and Events
- Morgan Stanley Technology, Media &
Telecom Conference on February 25-28 in San Francisco, CA
- Raymond James Institutional Investors
Conference on March 4-6 in Orlando, FL
- Deutsche Bank Media, Internet and
Telecom Conference on March 11-13 in Palm Beach, FL
Conference Call Details
CyrusOne will host a conference call on February 21, 2019, at
11:00 AM Eastern Time (10:00 AM Central Time) to discuss its
results for the fourth quarter of 2018. A live webcast of the
conference call and the presentation to be made during the call
will be available in the “Investors / Events & 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
February 21, 2019, through March 7, 2019. 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
10127497.
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 other than as required by law.
Adoption of New Accounting Standard and Use of Non-GAAP
Financial Measures and Other Metrics
On January 1, 2018, we adopted the new accounting standard with
respect to revenue recognition. See “Note 2. Summary of Significant
Accounting Policies” and “Note 3, Revenue Recognition” in our
financial statements included in our Form 10-Q for the quarter
ended March 31, 2018 and in our subsequent filings for additional
information. We have adopted the new standard using the modified
retrospective 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, 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, and 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, and Adjusted EBITDA should be considered only
as supplements to net income as measures of our performance. FFO,
Normalized FFO, 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.
The Company believes that Net Debt provides a useful measure of
liquidity and financial health.
1Net income / (loss) per diluted common share is defined as net
income / (loss) divided by the weighted average diluted common
shares outstanding for the period, which were 105.5 million for the
fourth quarter of 2018.
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
expenses. 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 and/or net income (loss), which is
presented in the accompanying consolidated statements of
operations, adjusted for sales and marketing expenses, general and
administrative expenses, depreciation and amortization expenses,
transaction, acquisition, integration and other related expenses,
impairment losses, interest expense, unrealized (gain) loss on
marketable equity securities, loss on early extinguishment of debt,
income tax expense and other special items as appropriate.
Amortization of deferred leasing costs is presented in depreciation
and amortization expenses, which is excluded from NOI. Sales and
marketing expenses are not property-specific, rather these expenses
support our entire portfolio. As a result, we have excluded these
sales and marketing expenses from our NOI calculation, consistent
with the treatment of general and administrative expenses, which
also support our entire portfolio. Because the calculation of NOI
excludes various expenses, 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, which is a non-GAAP financial measure, is
defined as net income (loss) as defined by GAAP adjusted for
interest expense, income tax expense, depreciation and
amortization, impairment losses and loss on disposals, transaction,
acquisition, integration and other related expenses, legal claim
costs, stock-based compensation expense, severance and management
transition costs, loss on early extinguishment of debt, new
accounting standards and regulatory compliance and the related
system implementation costs, unrealized (gain) loss on marketable
equity investment and other special items as appropriate. 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 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 loss on early
extinguishment of debt; unrealized (gain) loss on marketable equity
investment; new accounting standards and regulatory compliance and
the related system implementation costs; amortization of trade
names, transaction, acquisition and other integration expenses;
severance and management transition costs; legal claim costs and
other special items as appropriate. The Company believes its
Normalized FFO calculation provides a comparable measure between
different periods. 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 colocation 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, which is a non-GAAP
financial measure, 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.
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 211 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 48 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 211 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 48
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
John Gould, EVP & Chief Commercial Officer
Dallas, Texas 75201 Tesh Durvasula, EVP & President, Europe
Kellie Teal-Guess, EVP & Chief People Officer Phone: (972)
350-0060 Diane Morefield, EVP & Chief Financial Officer Robert
Jackson, EVP General Counsel & Secretary
Website: www.cyrusone.com
Kevin Timmons, EVP & Chief Technology Officer John Hatem, EVP
Design, Construction & Operations Jonathan Schildkraut, EVP
& Chief Strategy Officer
Analyst Coverage
Firm
Analyst
Phone
Number
Bank of America Merrill Lynch Michael J. Funk (646) 855-5664
Berenberg Capital Markets Nate Crossett (646) 949-9030 BMO Capital
Markets Ari Klein (212) 885-4103 Citi Mike Rollins (212) 816-1116
Cowen and Company Colby Synesael (646) 562-1355 Credit Suisse Sami
Badri (212) 538-1727 Deutsche Bank Matthew Niknam (212) 250-4711
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 Stifel Erik Rasmussen
(212) 271-3461 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 December 31, September
30, December 31, Growth % 2018
2018 2017 Yr/Yr Revenue $
221.3 $ 206.6 $ 180.5 23 % Net operating income 143.3 128.9 120.3
19 % Net income (loss) (105.8 ) (42.4 ) 2.8 n/m Funds from
Operations ("FFO") - Nareit defined (10.3 ) 39.5 71.7 n/m
Normalized Funds from Operations ("Normalized FFO") 90.9 78.5 78.4
16 % Weighted average number of common shares outstanding - diluted
for Normalized FFO 106.1 99.5 93.5 13 % Income (loss) per share -
basic $ (1.00 ) $ (0.43 ) $ 0.03 n/m Income (loss) per share -
diluted $ (1.00 ) $ (0.43 ) $ 0.03 n/m Normalized FFO per diluted
common share $ 0.86 $ 0.79 $ 0.84 2 % Adjusted EBITDA $ 121.2 $
110.8 $ 104.2 16 % Adjusted EBITDA as a % of Revenue 54.8 % 53.6 %
57.7 % (2.9) pts
As of December
31, September 30, December 31, Growth %
2018 2018 2017
Yr/Yr Balance Sheet Data Gross
investment in real estate $ 5,347.5 $ 5,093.2 $ 3,840.8 39 %
Accumulated depreciation (1,054.5 ) (973.4 ) (782.4 ) 35 % Total
investment in real estate, net 4,293.0 4,119.8 3,058.4 40 % Cash
and cash equivalents 64.4 61.0 151.9 (58 )% Market value of common
equity 5,728.5 6,709.9 5,723.1 — % Long-term debt 2,643.0 2,595.6
2,100.0 26 % Net debt 2,612.0 2,571.5 1,958.2 33 % Total enterprise
value 8,340.5 9,281.4 7,681.3 9 % Net debt to LQA Adjusted
EBITDA(a)
5.4
x
5.4
x
4.7
x
0.7
x
Dividend Activity Dividends per share $ 0.46 $ 0.46 $
0.42 10 %
Portfolio Statistics Data centers 48 47 45
7 % Stabilized CSF (000) 3,540 3,396 2,653 33 % Stabilized CSF %
leased 92 % 91 % 93 % (1) pts Total CSF (000) 3,819 3,674 3,267 17
% Total CSF % leased 88 % 86 % 83 % 5 pts Total NRSF (000) 6,726
6,527 5,717 18 % (a) September 30, 2018 period adjusted to
reflect a full quarter Adjusted EBITDA contribution from the Zenium
data centers based on September results and the pro forma impact of
equity proceeds assuming settlement under the forward sale
agreement.
CyrusOne Inc.
Condensed Consolidated Statements of
Operations
(Dollars in millions, except per share
amounts)
(Unaudited)
Three Months Twelve Months Ended December
31, Change Ended December 31, Change
2018 2017 $ %
2018 2017 $
% Revenue: Lease and other revenues from
customers $ 192.2 $ 161.6 $ 30.6 19 % $ 717.4 $ 602.4 $ 115.0 19 %
Metered power reimbursements 29.1 18.9
10.2 54 % 104.0
69.6 34.4
49 %
Revenue $ 221.3 $ 180.5
$ 40.8 23 % $ 821.4
$ 672.0 149.4 22 % Operating
expenses: Property operating expenses 78.0 60.2 17.8 30 % 292.4
235.1 57.3 24 % Sales and marketing 5.6 3.9 1.7 44 % 19.6 17.0 2.6
15 % General and administrative 23.4 16.4 7.0 43 % 80.6 67.0 13.6
20 % Depreciation and amortization 97.9 70.8 27.1 38 % 334.1 258.9
75.2 29 % Transaction, acquisition, integration and other related
expenses 1.6 5.3 (3.7 ) (70 )% 5.0 11.9 (6.9 ) (58 )% Impairment
losses — — —
n/m — 58.0
(58.0 ) n/m Total operating
expenses 206.5 156.6
49.9 32 % 731.7
647.9 83.8 13 %
Operating income 14.8 23.9 (9.1
) n/m
89.7 24.1 65.6 n/m
Interest expense (25.3 ) (20.1 ) (5.2 ) 26 % (94.7 ) (68.1 ) (26.6
) 39 % Unrealized gain (loss) on marketable equity investment (96.7
) — (96.7 ) n/m 9.9 — 9.9 n/m Loss on early extinguishment of debt
— — —
n/m (3.1 ) (36.5 )
33.4 (92 )%
Net income (loss) before income
taxes (107.2 ) 3.8 (111.0 )
n/m 1.8 (80.5 ) 82.3 n/m
Income tax expense 1.4 (1.0 )
2.4 n/m (0.6 )
(3.0 ) 2.4 (80 )%
Net income
(loss) $ (105.8 ) $
2.8 $ (108.6 )
n/m $ 1.2 $
(83.5 ) $ 84.7
n/m Income (loss) per share - basic $
(1.00 ) $ 0.03 $ (1.03
) n/m $ — $ (0.95
) $ 0.95 n/m Income (loss) per share
- diluted $ (1.00 ) $ 0.03
$ (1.03 ) n/m — $
(0.95 ) $ 0.95 n/m
CyrusOne Inc.
Condensed Consolidated Balance
Sheets
(Dollars in millions)
(Unaudited)
December 31, December 31, Change
2018 2017 $
% Assets Investment in real
estate: Land $ 118.5 $ 104.6 $ 13.9 13 % Buildings and improvements
1,677.5 1,371.4 306.1 22 % Equipment 2,630.2
1,813.9 816.3
45 % Gross operating real estate 4,426.2 3,289.9
1,136.3 35 % Less accumulated depreciation (1,054.5 )
(782.4 ) (272.1 )
35 % Net operating real estate 3,371.7 2,507.5 864.2 34 %
Construction in progress, including land under development 744.9
487.1 257.8 53 % Land held for future development 176.4
63.8 112.6
n/m Total investment in real estate,
net 4,293.0 3,058.4 1,234.6 40 % Cash and cash equivalents 64.4
151.9 (87.5 ) (58 )% Rent and other receivables, net 106.2 87.2
19.0 22 % Equity investment 198.1 175.6 22.5 13 % Goodwill 455.1
455.1 — — % Intangible assets, net 235.7 203.0 32.7 16 % Other
assets 240.0 180.9
59.1 33 %
Total assets
$ 5,592.5 $
4,312.1 $ 1,280.4
30 % Liabilities and equity
Debt, net $ 2,624.7 $ 2,089.4 $ 535.3 26 % Capital lease
obligations 33.4 10.1 23.3 n/m Lease financing arrangements 123.3
131.9 (8.6 ) (7 )% Construction costs payable 195.3 115.5 79.8 69 %
Accounts payable and accrued expenses 121.3 97.9 23.4 24 %
Dividends payable 51.0 41.8 9.2 22 % Deferred revenue and prepaid
rents 148.6 111.6 37.0 33 % Deferred tax liability 68.9
— 68.9
n/m Total liabilities 3,366.5
2,598.2
768.3 30 % Stockholders' 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 108,329,314 and 96,137,874 shares issued and
outstanding at December 31, 2018 and December 31, 2017,
respectively 1.1 1.0 0.1 — % Additional paid in capital 2,837.4
2,125.6 711.8 33 % Accumulated deficit (600.2 ) (486.9 ) (113.3 )
23 % Accumulated other comprehensive income (loss) (12.3 )
74.2 (86.5 )
n/m Total stockholders’ equity 2,226.0
1,713.9
512.1 30 %
Total liabilities and equity
$ 5,592.5 $
4,312.1 $ 1,280.4
30 %
CyrusOne Inc.
Condensed Consolidated Statements of
Operations
(Dollars in millions, except per share
amounts)
(Unaudited)
For the three months ended: December 31,
September 30, June 30, March 31, December
31, 2018 2018
2018 2018 2017
Revenue: Lease and other revenues from customers $ 192.2 $ 177.6 $
172.4 $ 175.2 $ 161.6 Metered power reimbursements 29.1
29.0 24.5
21.4 18.9
Revenue 221.3
206.6 196.9
196.6 180.5
Operating expenses: Property operating expenses 78.0 77.7
68.9 67.8 60.2 Sales and marketing 5.6 4.3 4.4 5.3 3.9 General and
administrative 23.4 19.3 18.6 19.3 16.4 Depreciation and
amortization 97.9 84.0 77.6 74.6 70.8 Transaction, acquisition,
integration and other related expenses 1.6 1.1 0.4 1.9 5.3
Impairment losses — — —
— — Total
operating expenses 206.5 186.4
169.9 168.9 156.6
Operating income 14.8 20.2 27.0
27.7 23.9 Interest expense (25.3 ) (25.8 ) (22.8 )
(20.8 ) (20.1 ) Unrealized gain (loss) on marketable equity
investment (96.7 ) (36.6 ) 102.7 40.5 — Loss on early
extinguishment of debt — —
— (3.1 ) —
Net
income (loss) before income taxes (107.2 )
(42.2 ) 106.9 44.3 3.8 Income
tax expense 1.4 (0.2 ) (1.0 )
(0.8 ) (1.0 )
Net income (loss)
$ (105.8 ) $ (42.4
) $ 105.9
$ 43.5 $ 2.8
Income (loss) per share - basic $ (1.00
) $ (0.43 ) $ 1.07
$ 0.45 $ 0.03 Income (loss) per
share - diluted $ (1.00 ) $
(0.43 ) $ 1.06 $ 0.45
$ 0.03
CyrusOne Inc.
Condensed Consolidated Balance
Sheets
(Dollars in millions)
(Unaudited)
December 31, September 30, June 30,
March 31, December 31, 2018
2018 2018 2018
2017 Assets Investment in real estate:
Land $ 118.5 $ 125.2 $ 107.4 $ 104.6 $ 104.6 Buildings and
improvements 1,677.5 1,587.3 1,461.1 1,400.8 1,371.4 Equipment
2,630.2 2,452.5 2,050.3
1,959.5 1,813.9
Gross operating real estate 4,426.2 4,165.0 3,618.8 3,464.9 3,289.9
Less accumulated depreciation (1,054.5 ) (973.4 )
(900.3 ) (836.4 ) (782.4
) Net operating real estate 3,371.7 3,191.6 2,718.5 2,628.5 2,507.5
Construction in progress, including land under development 744.9
738.6 452.6 435.3 487.1 Land held for future development 176.4
189.6 74.2
54.4 63.8 Total investment in
real estate, net 4,293.0 4,119.8
3,245.3 3,118.2
3,058.4 Cash and cash equivalents 64.4 61.0 116.2 228.7
151.9 Rent and other receivables, net 106.2 104.5 87.7 93.1 87.2
Equity investment 198.1 282.2 318.8 216.1 175.6 Goodwill 455.1
455.1 455.1 455.1 455.1 Intangible assets, net 235.7 248.4 190.5
196.8 203.0 Other assets 240.0 222.1
215.1 190.3
180.9
Total assets $ 5,592.5
$ 5,493.1 $
4,628.7 $ 4,498.3
$ 4,312.1 Liabilities and
equity Debt, net $ 2,624.7 $ 2,576.2 $ 2,179.5 $ 2,178.3 $
2,089.4 Capital lease obligations 33.4 36.9 14.9 15.9 10.1 Lease
financing arrangements 123.3 125.8 127.8 131.3 131.9 Construction
costs payable 195.3 160.5 113.3 89.0 115.5 Accounts payable and
accrued expenses 121.3 96.8 91.4 66.7 97.9 Dividends payable 51.0
49.7 46.5 46.4 41.8 Deferred revenue and prepaid rents 148.6 139.5
127.1 116.1 111.6 Deferred tax liability 68.9
68.7 — —
— Total liabilities 3,366.5
3,254.1 2,700.5 2,643.7
2,598.2 Stockholders' 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 108,329,314 and 96,137,874 shares issued and
outstanding at December 31, 2018 and December 31, 2017,
respectively 1.1 1.1 1.0 1.0 1.0 Additional paid in capital 2,837.4
2,685.3 2,281.5 2,268.0 2,125.6 Accumulated deficit (600.2 ) (444.3
) (353.0 ) (413.1 ) (486.9 ) Accumulated other comprehensive income
(loss) (12.3 ) (3.1 ) (1.3 )
(1.3 ) 74.2 Total stockholders' equity
2,226.0 2,239.0 1,928.2
1,854.6 1,713.9
Total liabilities and equity $ 5,592.5
$ 5,493.1 $
4,628.7 $ 4,498.3
$ 4,312.1
CyrusOne Inc.
Condensed Consolidated Statements of
Cash Flow
(Dollars in millions)
(Unaudited)
Twelve MonthsEnded
December31, 2018
Twelve MonthsEnded
December31, 2017
Three MonthsEnded
December31, 2018
Three MonthsEnded
December31, 2017
Cash flows from operating activities: Net income (loss) $ 1.2 $
(83.5 ) $ (105.8 ) $ 2.8 Adjustments to reconcile net income (loss)
to net cash provided by operating activities: Depreciation and
amortization 334.1 258.9 97.9 70.8 Interest expense amortization,
net 4.0 4.2 1.0 0.8 Stock-based compensation expense 17.5 14.7 4.5
3.1 Provision for bad debt expense 2.6 0.2 2.0 (0.3 ) Unrealized
(gain) loss on marketable equity investment (9.9 ) — 96.7 — Loss on
early extinguishment of debt 3.1 36.5 — — Impairment losses — 58.0
— — Other (0.6 ) 1.5 (0.6 ) 0.2 Change in operating assets and
liabilities: Rent and other receivables, net and other assets (80.2
) (64.3 ) (24.8 ) (10.6 ) Accounts payable and accrued expenses 3.0
29.3 26.4 25.8 Deferred revenue and prepaid rents 34.5
34.0 9.1
6.8
Net cash provided by operating activities
309.3 289.5
106.4 99.4 Cash flows
from investing activities: Asset acquisitions, primarily real
estate, net of cash acquired (462.8 ) (492.3 ) (1.0 ) — Investment
in real estate (865.7 ) (914.5 ) (234.5 ) (205.4 ) Equity
investment (12.6 ) (100.0 ) (12.6 )
(100.0 )
Net cash used in investing activities
(1,341.1 ) (1,506.8 )
(248.1 ) (305.4
) Cash flows from financing activities: Issuance of common
stock, net 699.6 705.7 147.7 296.9 Dividends paid (181.1 ) (145.7 )
(48.8 ) (38.3 ) Proceeds from debt, net 1,988.3 2,558.4 323.2 612.4
Payments on debt (1,547.4 ) (1,749.8 ) (274.7 ) (537.7 ) Payments
on capital lease obligations and lease financing arrangements (9.5
) (9.8 ) (1.7 ) (2.5 ) Interest paid by lenders on the issuance of
the senior notes — 2.7 — 2.7 Tax payment upon exercise of equity
awards (5.2 ) (6.9 ) (0.1 )
(0.3 )
Net cash provided by financing activities
944.7 1,354.6
145.6 333.2 Effect
of exchange rate changes on cash, cash equivalents and restricted
cash (0.4 ) — (0.5 )
— Net increase (decrease) in cash, cash equivalents
and restricted cash (87.5 ) 137.3 3.4 127.2 Cash, cash equivalents
and restricted cash at beginning of period 151.9
14.6 61.0 24.7
Cash, cash equivalents and restricted cash at end of
period $ 64.4 $
151.9 $ 64.4
$ 151.9 Supplemental
disclosure of cash flow information: Cash paid for interest,
net of amounts capitalized of $24.4 million and $17.0 million in
2018 and 2017, respectively $ 115.4 $ 68.8 $ 16.9 $ 10.6 Cash paid
for income taxes 3.4 2.2 0.1 0.3 Capitalized interest 24.4 17.0 8.5
4.6
Non-cash investing and financing activities:
Construction costs and other payables 195.3 115.5 195.3 115.5
Dividends payable 51.0 41.8 51.0 41.8 Debt assumed in asset
acquisition 86.3 — — — Capital lease obligation assumed 25.0 2.2 —
—
CyrusOne Inc.
Net Operating Income and Reconciliation
of Net Income (Loss) to Adjusted EBITDA
(Dollars in millions)
(Unaudited)
Twelve Months Ended Three Months Ended
December 31, Change December 31,
September 30, June 30, March 31,
December 31, 2018 2017
$ % 2018 2018
2018 2018 2017 Net
Operating Income Revenue $ 821.4 $ 672.0 $ 149.4 22 % $
221.3 $ 206.6 $ 196.9 $ 196.6 $ 180.5 Property operating expenses
292.4 235.1 57.3 24 %
78.0 77.7 68.9
67.8 60.2
Net
Operating Income (NOI) $ 529.0
$ 436.9 $ 92.1 21
% $ 143.3 $ 128.9
$ 128.0 $
128.8 $ 120.3 NOI as a %
of Revenue 64.4 % 65.0 % 64.8 % 62.4 % 65.0 % 65.5 % 66.6 %
Reconciliation of Net Income (Loss) to Adjusted EBITDA: Net
income (loss) $ 1.2 $ (83.5 ) $ 84.7 n/m $ (105.8 ) $ (42.4 ) $
105.9 $ 43.5 $ 2.8 Interest expense 94.7 68.1 26.6 39 % 25.3 25.8
22.8 20.8 20.1 Income tax expense 0.6 3.0 (2.4 ) (80 )% (1.4 ) 0.2
1.0 0.8 1.0 Depreciation and amortization 334.1 258.9 75.2 29 %
97.9 84.0 77.6 74.6 70.8 Impairment losses and loss on disposals
— 58.0 (58.0 ) n/m —
— —
— 0.2
EBITDA (Nareit
definition)(a)
$ 430.6 $
304.5 126.1 41 %
$ 16.0
$ 67.6 $ 207.3
$ 139.7 $ 94.9
Transaction, acquisition, integration and other
related expenses 4.8 11.9 (7.1 ) (60 )% 1.4 1.1 0.4 1.9 5.1 Legal
claim costs 0.6 1.1 (0.5 ) (45 )% 0.2 0.1 0.1 0.2 — Stock-based
compensation expense 17.5 14.7 2.8 19 % 4.5 4.6 4.5 3.9 3.1
Severance and management transition costs 2.3 0.5 1.8 n/m 1.6 — —
0.7 — Loss on early extinguishment of debt 3.1 36.5 (33.4 ) n/m — —
— 3.1 — New accounting standards and regulatory compliance and the
related system implementation costs 3.0 2.4 0.6 25 % 0.7 0.8 1.0
0.5 1.1 Unrealized (gain) loss on marketable equity investment (9.9
) — (9.9 ) n/m 96.7 36.6 (102.7 ) (40.5 ) — Other expenses
0.1 — 0.1 n/m 0.1
— — —
—
Adjusted EBITDA $ 452.1
$ 371.6 80.5
22 %
$ 121.2 $ 110.8
$ 110.6 $ 109.5
$ 104.2 Adjusted EBITDA as a %
of Revenue 55.0 % 55.3 % 54.8 % 53.6 % 56.2 % 55.7 % 57.7 %
(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 impairment losses and loss on disposals. 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 Twelve Months Ended
December 31, Change December 31, Change
2018 2017 $
% 2018 2017
$ % Net Income
(Loss) $ (105.8 ) $
2.8 $ (108.6 ) n/m $
1.2 $ (83.5 ) $
84.7 n/m Sales and marketing expenses 5.6 3.9 1.7 44
% 19.6 17.0 2.6 15 % General and administrative expenses 23.4 16.4
7.0 43 % 80.6 67.0 13.6 20 % Depreciation and amortization expenses
97.9 70.8 27.1 38 % 334.1 258.9 75.2 29 % Transaction, acquisition,
integration and other related expenses 1.6 5.1 (3.5 ) (69 )% 5.0
11.9 (6.9 ) (58 )% Impairment losses and loss on disposal — 0.2
(0.2 ) n/m — 58.0 (58.0 ) n/m Interest expense 25.3 20.1 5.2 26 %
94.7 68.1 26.6 39 % Unrealized (gain) loss on marketable equity
investment 96.7 — 96.7 n/m (9.9 ) — (9.9 ) n/m Loss on early
extinguishment of debt — — — — % 3.1 36.5 (33.4 ) (92 )% Income tax
expense (1.4 ) 1.0
(2.4 ) n/m 0.6
3.0 (2.4 )
(80 )%
Net Operating Income $ 143.3
$ 120.3 $
23.0 19 %
$ 529.0 $ 436.9
$ 92.1
21 %
CyrusOne Inc.
Reconciliation of Net Income (Loss) to
FFO and Normalized FFO
(Dollars in millions)
(Unaudited)
Twelve
Months Ended Three Months Ended December 31,
Change December 31, September 30,
June 30, March 31, December
31, 2018 2017 $
% 2018 2018
2018 2018 2017 Reconciliation
of Net Income (Loss) to FFO and Normalized FFO: Net
income (loss) $ 1.2 $ (83.5 ) $ 84.7 n/m $ (105.8 ) $ (42.4 ) $
105.9 $ 43.5 $ 2.8 Real estate depreciation and amortization 325.5
250.6 74.9 30 % 95.5 81.9 75.6 72.5 68.9 Impairment losses —
58.0 (58.0 ) n/m —
— — —
—
Funds from Operations ("FFO") - Nareit
defined $ 326.7 $ 225.1 $
101.6 45 % $ (10.3 )
$ 39.5 $ 181.5 $ 116.0
$ 71.7 Loss on early extinguishment of debt
3.1 36.5 (33.4 ) n/m — — — 3.1 — Unrealized (gain) loss on
marketable equity investment (9.9 ) — (9.9 ) n/m 96.7 36.6 (102.7 )
(40.5 ) — New accounting standards and regulatory compliance and
the related system implementation costs 3.0 2.4 0.6 n/m 0.7 0.8 1.0
0.5 1.1 Amortization of tradenames 1.7 1.4 0.3 21 % 0.6 0.4 0.4 0.3
0.3 Transaction, acquisition, integration and other related
expenses 4.8 11.9 (7.1 ) (60 )% 1.4 1.1 0.4 1.9 5.3 Severance and
management transition costs 2.3 0.5 1.8 n/m 1.6 — — 0.7 — Legal
claim costs 0.6 1.1 (0.5 ) (45
)% 0.2 0.1 0.1
0.2 —
Normalized Funds from Operations (Normalized FFO) $
332.3 $ 278.9 $
53.4 19 % $ 90.9
$ 78.5 $ 80.7
$ 82.2 $ 78.4
Normalized FFO per diluted common share $
3.31 $ 3.12 $ 0.19 6
% $ 0.86 $ 0.79 $
0.81 $ 0.85 $ 0.84 Weighted
average diluted common shares outstanding 100.4
89.4 11.0 12 % 106.1 99.5
99.4 96.6 93.5 Additional
Information: Amortization of deferred financing costs and bond
premium 4.0 4.3 (0.3 ) (7 )% 1.1 1.1 1.1 0.7 0.9 Stock-based
compensation expense 17.5 14.7 2.8 19 % 4.5 4.6 4.5 3.9 3.1
Non-real estate depreciation and amortization 6.9 6.9 — n/m 1.8 1.7
1.6 1.8 1.6 Straight line rent adjustments(a) (27.7 ) (32.5 ) 4.8
(15 )% (8.9 ) (5.8 ) (5.8 ) (7.2 ) (7.4 ) Deferred revenue,
primarily installation revenue(b) 29.3 23.3 6.0 26 % 16.1 7.6 2.4
3.2 3.8 Leasing commissions (16.7 ) (17.3 ) 0.6 (3 )% (6.5 ) (3.3 )
(3.7 ) (3.2 ) (3.5 ) Recurring capital expenditures (10.5 ) (4.4 )
(6.1 ) n/m (2.1 ) (3.7 ) (2.3 ) (2.4 ) (1.6 )
(a)
Straight line rent adjustments:
Represents the difference between revenue recognized on a straight
line basis under 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 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, Debt Schedule and Interest
Summary
(Unaudited)
Market
Capitalization (as of December 31, 2018)
(dollars in millions)
Shares or Equivalents
Outstanding
Market Price as of
December 31, 2018
Market Value Equivalents
(in millions)
Common shares 108,329,314 $ 52.88 $ 5,728.5 Net Debt 2,612.0
Total Enterprise Value (TEV) $ 8,340.5
Reconciliation of
Net Debt
December 31, September 30, (dollars in
millions)
2018
2018 Long-term debt(a) $ 2,643.0 $
2,595.6 Capital lease obligations 33.4 36.9 Less: Cash and cash
equivalents (64.4 ) (61.0 )
Net Debt
$ 2,612.0 $
2,571.5 (a) Excludes adjustment for deferred
financing costs and bond premiums.
Debt
Schedule (as of December 31, 2018)
(dollars in millions)
Long-term debt: Amount
Interest Rate Maturity
Date Revolving credit facility - EUR(a) $ 143.0 E + 145bps(b)
March 2023(c) Revolving credit facility - USD — L + 145bps March
2023(c) Term loan 1,000.0 L + 140bps(d) March 2023 Term loan 300.0
L + 170bps(e) 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(f) $ 2,643.0 4.38%
Weighted average term of debt: 5.5
years (a) Amount outstanding is USD equivalent of
€125 million. (b) Interest rate as of December 31, 2018: 1.45%. (c)
Assuming exercise of one-year extension option. (d) Interest rate
as of December 31, 2018: 3.92%. (e) Interest rate as of December
31, 2018: 4.23%. (f) Excludes adjustment for deferred financing
costs.
Interest
Summary
Three Months Ended December 31, September 30,
December 31, Growth % (dollars in millions)
2018 2018 2017
Yr/Yr Interest expense and fees $ 32.7 $ 30.2
$ 23.8 37 % Amortization of deferred financing costs and bond
premium 1.1 1.1 0.9 22 % Capitalized interest (8.5 )
(5.5 ) (4.6 ) 85 %
Total
interest expense $ 25.3
$ 25.8 $ 20.1
26 %
CyrusOne Inc.
Colocation Square Footage (CSF) and CSF
Leased
(Unaudited)
As of December 31, 2018 As of
September 30, 2018 As of December 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 881 96 % 780 94 % 640 79 % Dallas 621 70 % 621 69
% 506 85 % Phoenix 509 100 % 509 100 % 509 91 % Cincinnati 402 92 %
402 93 % 404 91 % Houston 308 73 % 308 74 % 308 74 % San Antonio
300 100 % 300 100 % 273 88 % New York Metro 218 86 % 218 83 % 218
82 % Chicago 213 69 % 213 67 % 213 64 % Austin 106 80 % 106 78 %
106 67 % Raleigh-Durham 76 97 %
76 88 % 76
88 %
Total - Domestic 3,633 87
% 3,533 86 % 3,253 83
% Frankfurt 98 99 % 62 98 % — — % London 84 99 % 77 99 % 10
94 % Singapore 3 22 % 3
22 % 3
22 %
Total - International 185
98 % 142
97 % 13
76 % Total - Portfolio
3,819 88 %
3,674 86 %
3,267 83 %
Stabilized Properties(c) 3,540
92 % 3,396
91 % 2,653
93 % (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.
2019 Guidance
2018 Results
Adjusted
Category
2018
Results
for ASC
842(1)
2019
Guidance
Total Revenue $821 million $821 million $960 - 1,000 million Lease
and Other Revenues from Customers $717 million $717 million $835 -
865 million Metered Power Reimbursements $104 million $104 million
$125 - 135 million Adjusted EBITDA $452 million $435 million $500 -
525 million Normalized FFO per diluted common share $3.31 $3.22
$3.10 - 3.20 Capital Expenditures $866 million $866 million $950 -
1,100 million Development(2) $855 million $855 million $940 - 1,085
million Recurring $11 million $11 million $10 - 15 million
(1)
ASC 842 refers to Accounting Standards
Codification Topic 842 - Leases, issued by the Financial Accounting
Standards Board to increase transparency and comparability among
organizations by recognizing lease assets and lease liabilities on
the balance sheet and disclosing key information about leasing
transactions. The Company is adopting ASC 842 effective January 1,
2019. The adjusted 2018 results have not been prepared in
accordance with GAAP and represent the Company’s estimates as if
the standard had been adopted as of January 1, 2018. Adjusted
EBITDA for 2018 decreased by $17 million due to higher operating
lease expense. Normalized FFO per diluted common share decreased by
$0.09 due to higher operating lease expense, partially offset by
lower interest expense. The adjusted 2018 results are being shown
solely for comparative and investor usefulness purposes with
respect to the Company’s 2019 guidance.
(2) 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 forward-looking
guidance for GAAP financial measures (other than Revenue and
Capital Expenditures) or 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,
acquisition, integration and other related expenses, legal claim
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 December 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)
MetroArea
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 $ 75,701 305 88 % 89 % 82 44 % 111 498 — 44 Northern
Virginia - Sterling V Northern Virginia 42,039 383 83 % 92 % 11 100
% 138 532 64 57 Houston - Houston West I Houston 41,911 112 97 % 97
% 11 100 % 37 161 3 28 Northern Virginia - Sterling II Northern
Virginia 35,853 159 100 % 100 % 9 100 % 55 223 — 30 Cincinnati -
7th Street*** Cincinnati 33,493 197 91 % 92 % 6 61 % 175 378 46 16
San Antonio III San Antonio 30,781 132 100 % 100 % 9 100 % 43 184 —
24 Somerset I New York Metro 29,786 97 85 % 92 % 27 89 % 89 213 203
13 Chicago - Aurora I Chicago 27,797 113 98 % 98 % 34 100 % 223 371
27 71 Dallas - Lewisville* Dallas 27,050 114 76 % 83 % 11 84 % 54
180 — 21 Totowa - Madison** New York Metro 26,469 51 89 % 92 % 22
100 % 59 133 — 6 Cincinnati - North Cincinnati Cincinnati 24,322 65
99 % 100 % 45 79 % 53 163 65 14 Wappingers Falls I** New York Metro
23,705 37 92 % 92 % 20 99 % 15 72 — 3 Frankfurt I Frankfurt 21,973
53 97 % 97 % 8 91 % 57 118 — 18 San Antonio I San Antonio 21,586 44
100 % 100 % 6 83 % 46 96 11 12 Phoenix - Chandler VI Phoenix 21,190
148 99 % 99 % 6 100 % 32 186 10 24 Houston - Houston West II
Houston 20,822 80 77 % 77 % 4 79 % 55 139 11 12 Phoenix - Chandler
II Phoenix 20,501 74 100 % 100 % 6 38 % 26 105 — 12 Northern
Virginia - Sterling I Northern Virginia 19,878 78 100 % 100 % 6 81
% 49 132 — 12 Phoenix - Chandler I Phoenix 19,456 74 100 % 100 % 35
12 % 39 147 31 16 Phoenix - Chandler III Phoenix 18,548 68 100 %
100 % 2 — % 30 101 — 14 Raleigh-Durham I Raleigh-Durham 18,522 76
92 % 97 % 13 100 % 82 171 246 12 Northern Virginia - Sterling III
Northern Virginia 18,172 79 100 % 100 % 7 100 % 34 120 — 15 Austin
III Austin 16,427 62 67 % 69 % 15 98 % 21 98 67 6 Houston -
Galleria Houston 16,021 63 59 % 59 % 23 49 % 25 112 — 14 Austin II
Austin 14,860 44 95 % 95 % 2 100 % 22 68 — 5 San Antonio II San
Antonio 14,106 64 100 % 100 % 11 100 % 41 117 — 12 Florence
Cincinnati 13,518 53 99 % 99 % 47 87 % 40 140 — 9 Northern Virginia
- Sterling VI Northern Virginia 12,384 101 68 % 100 % — — % — 101 —
21 Phoenix - Chandler IV Phoenix 11,285 73 100 % 100 % 3 100 % 27
103 — 12 Phoenix - Chandler V Phoenix 11,162 72 100 % 100 % 1 95 %
16 89 94 12 Cincinnati - Hamilton* Cincinnati 10,803 47 74 % 74 % 1
100 % 35 83 — 10 Northern Virginia - Sterling IV Northern Virginia
10,349 81 100 % 100 % 7 100 % 34 122 — 15 San Antonio IV San
Antonio 10,271 60 100 % 100 % 12 100 % 27 99 — 12
London I**
London 8,527 25 100 % 100 % 12 56 % 58 95 9 10
London II**
London 8,304 49 100 % 100 % 10 100 % 93 151 4 15
London - Great Bridgewater**
London 6,274 10 94 % 94 % — — % 1 11 — 1 Houston - Houston West III
Houston 5,569 53 34 % 34 % 10 100 % 32 95 209 6 Cincinnati - Mason
Cincinnati 5,374 34 100 % 100 % 26 98 % 17 78 — 4 Stamford -
Riverbend** New York Metro 5,340 20 23 % 23 % — — % 8 28 — 2
Norwalk I** New York Metro 4,378 13 99 % 99 % 4 61 % 41 58 87 2
Chicago - Lombard Chicago 2,427 14 62 % 62 % 4 100 % 12 30 29 3
Stamford - Omega** New York Metro 1,242 — — % — % 19 84 % 4 22 — —
Frankfurt II Frankfurt 1,185 45 100 % 100 % 7 100 % 72 123 10 25
Cincinnati - Blue Ash* Cincinnati 657 6 36 % 36 % 7 100 % 2 15 — 1
South Bend - Crescent* Chicago 567 3 41 % 41 % — — % 5 9 11 1
Totowa - Commerce** New York Metro 567 — — % — % 20 38 % 6 26 — —
Singapore - Inter Business Park** Singapore 379 3 22 % 22 % — — % —
3 — 1 South Bend - Monroe Chicago 123 6
23 % 23 %
— — % 6
13 4 1
Stabilized Properties - Total $ 811,653
3,540 90 %
92 %
621 77 %
2,148 6,309
1,241 669
CyrusOne Inc.Data Center PortfolioAs
of December 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)
MetroArea
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
$ 811,653 3,540 90 % 92
% 621 77 % 2,148 6,309
1,241 669 Pre-Stabilized
Properties(b) Dallas - Carrollton (DH #6) Dallas
7,346 75 76 % 76 % — — % 21 96 — 6 Chicago - Aurora II (DH #1)
Chicago 2,107 77 29 % 34 % 45 — % 14 136 272 16 Dallas - Carrollton
(DH #7) Dallas 868 48 21 % 21 % — — % — 48 — 6 Dallas - Allen (DH
#1) Dallas — 79 — %
— % — — % 58
137 158 6
All
Properties - Total $ 821,975
3,819 85 %
88 % 666 72
% 2,241 6,726
1,670 703 *
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 December 31, 2018, multiplied by 12. For the
month of December 2018, customer reimbursements were $112.0 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 January 1, 2017 through
December 31, 2018, customer reimbursements under leases with
separately metered power constituted between 10.2% and 15.1% of
annualized rent. After giving effect to abatements, free rent and
other straight-line adjustments, our annualized effective rent as
of December 31, 2018 was $829.6 million. Our annualized effective
rent was greater than our annualized rent as of December 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 December 31, 2018 divided by total CSF.
Leases signed but that have not commenced billing as of December
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 December 31, 2018 divided by
total Office & Other space. Leases signed but not commenced as
of December 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 December 31, 2018
(Dollars in millions)
(Unaudited)
NRSF Under Development(a)
Under Development
Costs(b) Facilities
Metropolitan
Area
Estimated Completion
Date
Colocation Space
(CSF) (000)
Office & Other
(000)
Supporting Infrastructure
(000)
Powered Shell(c)
(000)
Total (000)
Critical Load MW
Capacity(d)
Actual to
Date(e)
Estimated
Costs to
Completion(f)
Total Dallas - Allen Dallas 1Q'19 —
25 21 — 46 — $ —
7-9 7-9 Northern Virginia - Sterling V
Northern Virginia 1Q'19 — — 7 — 7 6.0 — 25-28 25-28 Phoenix -
Chandler VII Phoenix 1Q'19 — — — 269 269 — 15 44-50 59-65
Raleigh-Durham I Raleigh-Durham 1Q'19 7 — — — 7 3.0 1 6-8 7-9
Dallas - Carrollton Dallas 2Q'19 — — — — — 6.0 2 17-18 19-20
Northern Virginia - Sterling VI Northern Virginia 2Q'19 171 35 52 —
258 36.0 43 95-119 138-162 Somerset II New York Metro 2Q'19 9 — — —
9 — — 4-6 4-6 London I London 2Q'19 13 — — — 13 5.0 — 12-14 12-14
Northern Virginia - Sterling VII Northern Virginia 3Q'19 — — — 93
93 — — 33-37 33-37 Northern Virginia - Sterling VIII Northern
Virginia 3Q'19 122 4 25 — 151 30.0 24 142-159 166-183 Austin III
Austin 3Q'19 — — — — — 3.0 — 17-19 17-19 London II London 3Q'19 32
— — — 32 13.0 — 30-34 30-34 Frankfurt II Frankfurt 3Q'19 45 3 — —
48 18.0 — 50-60 50-60 Amsterdam I Amsterdam 4Q'19 39 28 40 194 301
6.0 1 65-76 66-77 Frankfurt III Frankfurt 2Q'20 — —
— 258 258 —
— 66-77
66-77
Total 439 96
144 814
1,492 126.0 $
86 $ 613-714
$ 699-800 (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. May not sum to total
due to rounding. (b) London development costs are GBP-denominated
and shown as USD-equivalent using exchange rate of 1.27. Frankfurt
and Amsterdam development costs are EUR-denominated and shown as
USD-equivalent using exchange rate of 1.14. (c) Represents NRSF
under construction that, upon completion, will be powered shell
available for future development into operating NRSF. (d) 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.
(e) Actual to date is the cash investment as of December 31, 2018.
There may be accruals above this amount for work completed, for
which cash has not yet been paid. (f) 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.
Capital
Expenditures - Investment in Real Estate
Three months ended
Twelve months ended March 31, June
30, September 30, December 31,
December 31, (dollars in millions)
2018 2018 2018
2018 2018 Capital
expenditures - investment in real estate $142.8 $175.2 $304.8
$232.4 $855.2
CyrusOne Inc.
Land Available for Future Development
(Acres)
As of December 31, 2018
(Unaudited)
As of Market December 31,
2018 Amsterdam 8 Atlanta 44 Austin 22 Chicago 23 Cincinnati 98
Dallas 57 Houston 20 Northern Virginia 40 Phoenix 96 Quincy,
Washington 48 Santa Clara 15
Total
Available(a) 470 Book Value of Total
Available $ 176.4
million
(a) Does not sum to total due
to rounding.
CyrusOne Inc.
Leasing Statistics - Lease
Signings
As of December 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)
4Q'18 482 41,000 6,768 $1,678 73 Prior 4Q Avg. 460 182,750 26,250
$3,126 85 3Q'18 500 114,000 15,118 $2,218 60 2Q'18 506 305,000
51,919 $5,453 143 1Q'18 439 226,000 29,364 $3,370 77 4Q'17 395
86,000 8,600 $1,463 61 (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 $0.3 million in 2Q'18 and 3Q'18, $0.2
million in 4Q'17 and 1Q'18, and $0.1 million in 4Q'18. (e)
Calculated on a CSF-weighted basis.
CyrusOne Inc.
New MRR Signed - Existing vs. New
Customers
As of December 31, 2018
(Dollars in thousands)
(Unaudited)
New MRR(a) Signed
($000)
1Q'17
2Q'17 3Q'17 4Q'17 1Q'18 2Q'18
3Q'18 4Q'18 Existing Customers $ 2,247 $ 2,322 $
1,418 $ 1,063 $ 3,149 $ 4,429 $ 2,072 $ 1,226 New Customers $ 385
$ 145 $ 810 $ 400 $ 221 $ 1,024
$ 146 $ 452
Total $ 2,632
$ 2,467 $ 2,228 $ 1,463
$ 3,370 $ 5,453 $ 2,218
$ 1,678 % from Existing Customers 85 % 94 % 64
% 73 % 93 % 81 % 93 % 73 %
(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 $0.3 million in 2Q'18 and 3Q'18, $0.2 million in
2Q'17-1Q'18 and $0.1 million in 1Q'17 and 4Q'18.
CyrusOne Inc.
Customer Sector
Diversification(a)
As of December 31, 2018
(Unaudited)
Principal Customer Industry Number
ofLocations Annualized
Rent(b) (000) Percentage of
Portfolio Annualized Rent(c)
Weighted Average Remaining Lease Term
in Months(d) 1 Information Technology 11 $
156,064 19.0 % 95.8 2 Information Technology 5 52,716 6.4 % 67.6 3
Information Technology 10 44,325 5.4 % 39.4 4 Information
Technology 7 29,937 3.6 % 32.8 5 Financial Services 1 19,097 2.3 %
147.0 6 Research and Consulting Services 3 15,791 1.9 % 25.1 7
Information Technology 4 15,585 1.9 % 44.0 8 Healthcare 2 15,099
1.8 % 108.0 9 Telecommunication Services 2 13,513 1.6 % 31.0 10
Energy 1 12,610 1.5 % 19.7 11 Information Technology 6 12,004 1.5 %
23.0 12 Industrials 5 11,400 1.4 % 9.5 13 Telecommunication
Services 7 9,950 1.2 % 22.1 14 Financial Services 2 9,506 1.2 %
56.6 15 Consumer Staples 3 9,162 1.1 % 25.7 16 Information
Technology 2 7,994 1.0 % 66.2 17 Telecommunication Services 1 7,823
1.0 % 106.6 18 Information Technology 3 7,819 1.0 % 109.8 19
Information Technology 2 7,187 0.9 % 11.3 20 Financial Services 1
6,600 0.8 % 17.0
$
464,182 56.5 %
67.2 (a) Customers and their affiliates are
consolidated. (b) Represents monthly contractual rent (defined as
cash rent including customer reimbursements for metered power)
under existing customer leases as of December 31, 2018, multiplied
by 12. For the month of December 2018, customer reimbursements were
$112.0 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
January 1, 2017 through December 31, 2018, customer reimbursements
under leases with separately metered power constituted between
10.2% and 15.1% of annualized rent. After giving effect to
abatements, free rent and other straight-line adjustments, our
annualized effective rent as of December 31, 2018 was $829.6
million. Our annualized effective rent was greater than our
annualized rent as of December 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. (c) Represents the customer’s
total annualized rent divided by the total annualized rent in the
portfolio as of December 31, 2018, which was approximately $822.0
million. (d) Weighted average based on customer’s percentage of
total annualized rent expiring and is as of December 31, 2018,
assuming that customers exercise no renewal options and exercise
all early termination rights that require payment of less than 50%
of the remaining rents. Early termination rights that require
payment of 50% or more of the remaining lease payments are not
assumed to be exercised because such payments approximate the
profitability margin of leasing that space to the customer, such
that we do not consider early termination to be economically
detrimental to us.
CyrusOne Inc.
Lease Distribution
As of December 31, 2018
(Unaudited)
NRSF Under Lease(a) Number of
Customers(b)
Percentage of
All Customers
Total
Leased
NRSF(c) (000)
Percentage of
Portfolio
Leased NRSF
Annualized
Rent(d) (000)
Percentage of
Annualized Rent
0-999 672 68 % 127 2 % $ 71,531 9 % 1,000-2,499 119 12 % 187 4 %
43,709 5 % 2,500-4,999 74 7 % 264 5 % 44,912 6 % 5,000-9,999 45 5 %
319 6 % 52,946 6 % 10,000+ 82 8 % 4,466
83 % 608,877
74 %
Total 992 100
% 5,363 100
% $ 821,975
100 % (a) Represents all leases in our
portfolio, including colocation, office and other leases. (b)
Represents the number of customers occupying data center, office
and other space as of December 31, 2018. This may vary from total
customer count as some customers may be under contract, but have
yet to occupy space. (c) Represents the total square feet at a
facility under lease and that has commenced billing, excluding
space held for development or space used by CyrusOne. A customer’s
leased NRSF is estimated based on such customer’s direct CSF or
office and light-industrial space plus management’s estimate of
infrastructure support space, including mechanical,
telecommunications and utility rooms, as well as building common
areas. (d) Represents monthly contractual rent (defined as cash
rent including customer reimbursements for metered power) under
existing customer leases as of December 31, 2018, multiplied by 12.
For the month of December 2018, customer reimbursements were $112.0
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 January 1, 2017
through December 31, 2018, customer reimbursements under leases
with separately metered power constituted between 10.2% and 15.1%
of annualized rent. After giving effect to abatements, free rent
and other straight-line adjustments, our annualized effective rent
as of December 31, 2018 was $829.6 million. Our annualized
effective rent was greater than our annualized rent as of December
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.
CyrusOne Inc.
Lease Expirations
As of December 31, 2018
(Unaudited)
Year(a) Number of Leases
Expiring(b)
Total OperatingNRSF Expiring
(000)
Percentage ofTotal NRSF
Annualized Rent(c) (000)
Percentage ofAnnualized Rent
Annualized Rent at
Expiration(d)(000)
Percentage ofAnnualized Rent at
Expiration Available 1,363 20 % Month-to-Month 759 100 1 % $
32,002 4 % $ 34,396 4 % 2019 2,250 574 9 % 107,469 13 % 108,352 12
% 2020 1,686 594 9 % 104,107 13 % 106,016 11 % 2021 1,851 722 11 %
127,330 15 % 136,913 15 % 2022 337 539 8 % 77,359 9 % 83,552 9 %
2023 266 720 11 % 86,821 11 % 119,285 13 % 2024 60 266 4 % 39,767 5
% 48,527 5 % 2025 46 186 3 % 29,672 4 % 34,024 4 % 2026 31 590 9 %
86,809 10 % 92,627 10 % 2027 19 438 6 % 66,807 8 % 86,233 9 % 2028
16 265 4 % 29,576 4 % 34,941 4 % 2029 - Thereafter 13
369 5 % 34,256 4 %
41,324 4 %
Total
7,334 6,726 100
% $ 821,975
100 % $ 926,190
100 % (a) Leases that were
auto-renewed prior to December 31, 2018 are shown in the calendar
year in which their current auto-renewed term expires. Unless
otherwise stated in the footnotes, the information set forth in the
table assumes that customers exercise no renewal options and
exercise all early termination rights that require payment of less
than 50% of the remaining rents. Early termination rights that
require payment of 50% or more of the remaining lease payments are
not assumed to be exercised. (b) Number of leases represents each
agreement with a customer. A lease agreement could include multiple
spaces and a customer could have multiple leases. (c) Represents
monthly contractual rent (defined as cash rent including customer
reimbursements for metered power) under existing customer leases as
of December 31, 2018, multiplied by 12. For the month of December
2018, customer reimbursements were $112.0 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 January 1, 2017 through December 31, 2018,
customer reimbursements under leases with separately metered power
constituted between 10.2% and 15.1% of annualized rent. After
giving effect to abatements, free rent and other straight-line
adjustments, our annualized effective rent as of December 31, 2018
was $829.6 million. Our annualized effective rent was greater than
our annualized rent as of December 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) Represents the final monthly
contractual rent under existing customer leases that had commenced
as of December 31, 2018, multiplied by 12.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190220005898/en/
Investor Relations:Michael SchaferVice President, Capital
Markets & Investor Relations972-350-0060investorrelations@cyrusone.com
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