2Q’19 Year-over-Year Revenue Growth of 28%
Announcing a 9% Increase in 3Q’19 Dividend per Share to $0.50
CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT,
today announced second quarter 2019 earnings.
Highlights
% Change vs. 2Q’18
Category
2Q’19
2Q’18
2Q’18 Adjusted
for ASC
8421
Revenue
$251.5 million
28%
28%
Net income / (loss)
$(8.5) million
n/m
n/m
Adjusted EBITDA
$127.3 million
15%
20%
Normalized FFO
$102.1 million
27%
30%
Net income / (loss) per diluted share
$(0.08)
n/m
n/m
Normalized FFO per diluted share
$0.90
11%
14%
•
Signed leases totaling 13 megawatts (“MW”)
and $26 million in annualized GAAP revenue
— Signed leases totaling 6 MW and 46,000
colocation square feet (“CSF”) in the second quarter, representing
$13 million in annualized GAAP revenue
— Signed leases totaling 7 MW subsequent
to the end of the quarter representing an additional $13 million in
annualized GAAP revenue
— Backlog of $24 million in annualized
GAAP revenue as of the end of the second quarter
•
Subsequent to the end of the
quarter, signed 999-year lease on approximately 24 acres of land in
Dublin with 72 MW of power capacity to support continued European
expansion in key hyperscale market
•
Increasing 2019 Normalized FFO per diluted
share guidance2 by $0.20 at the midpoint of range, from $3.30 -
$3.40 to $3.50 - $3.60
— Midpoint of new guidance range
represents 10% increase vs. 2018 Normalized FFO per diluted share
adjusted for ASC 842
•
Announcing a 9% increase in the
quarterly dividend for the third quarter of 2019 to $0.50 per
share, up from $0.46 per share in the second quarter of 2019
•
As previously announced, raised
approximately $200 million through the sale of approximately 5.7
million American depository shares (“ADSs”) of GDS Holdings Limited
(“GDS”)
“Our results this quarter reflect very strong financial
performance, and the midpoints of our current 2019 guidance ranges
imply revenue growth of 19%, Adjusted EBITDA growth of 18%, and
Normalized FFO per share growth of 10% compared to 2018,” said Gary
Wojtaszek, president and chief executive officer of CyrusOne. “We
continue to be one of the fastest-growing REITs, and the
investments we have made over the past two years building out our
international platform should enable us to continue to grow at
industry-leading rates through 2020 and beyond.”
Second Quarter 2019 Financial Results
Revenue was $251.5 million for the second quarter, compared to
$196.9 million for the same period in 2018, an increase of 28%. The
increase in revenue was driven primarily by a 20% increase in
occupied CSF from organic growth and the Zenium acquisition, a
$14.7 million increase in equipment sales, and additional
interconnection services.
Net loss was $(8.5) million for the second quarter, compared to
net income of $105.9 million in the same period in 2018. Net loss
for the second quarter included an $8.5 million loss on the
Company’s equity investment in GDS, a leading data center provider
in China. Net loss per diluted common share3 was $(0.08) in the
second quarter of 2019, compared to net income per diluted common
share of $1.06 in the same period in 2018.
Net operating income (“NOI”)4 was $148.2 million for the second
quarter, compared to $128.0 million in the same period in 2018, an
increase of 16%. Adjusted EBITDA5 was $127.3 million for the second
quarter, compared to $110.6 million in the same period in 2018, an
increase of 15%.
Normalized Funds From Operations (“Normalized FFO”)6 was $102.1
million for the second quarter, compared to $80.7 million in the
same period in 2018, an increase of 27%. Normalized FFO per diluted
common share was $0.90 in the second quarter of 2019.
Leasing Activity
CyrusOne leased approximately 6 MW of power and 46,000 CSF in
the second quarter, representing $1.1 million in monthly recurring
rent, inclusive of the monthly impact of installation charges, or
approximately $13.1 million in annualized GAAP revenue7, excluding
estimates for pass-through power. The weighted average lease term
of the new leases, based on square footage, is 67 months (5.6
years), and the weighted average remaining lease term of CyrusOne’s
portfolio is 54 months (taking into account the impact of the
backlog). Recurring rent churn8 for the second quarter was 0.6%,
compared to 1.1% for the same period in 2018.
Portfolio Development and CSF Leased
In the second quarter, the Company completed construction on
59,000 CSF and 21 MW of power capacity across four projects in
Raleigh-Durham, the New York Metro area, London, and Frankfurt. CSF
leased9 as of the end of the second quarter was 89% for stabilized
properties10 and 84% overall. In addition, the Company has
development projects underway in Northern Virginia, Dallas, the New
York Metro area, Austin, Frankfurt, London, and Amsterdam that are
expected to add approximately 146,000 CSF and 55 MW of power
capacity.
Balance Sheet and Liquidity
As of June 30, 2019, the Company had gross asset value11
totaling approximately $7.1 billion, an increase of approximately
28% over gross asset value as of June 30, 2018. CyrusOne had $2.73
billion of long-term debt12, $144.1 million of cash and cash
equivalents, and $1.26 billion available under its unsecured
revolving credit facility as of June 30, 2019. Net debt12 was $2.62
billion as of June 30, 2019, representing approximately 29% of the
Company's total enterprise value as of June 30, 2019 of $9.1
billion, or 5.1x Adjusted EBITDA for the last quarter annualized.
After further adjusting Adjusted EBITDA to exclude the impact of
the adoption of ASC 842 as of January 1, 2019, in order to present
the leverage metric on a basis comparable to that of prior periods,
net debt to Adjusted EBITDA for the last quarter annualized was
5.0x13. Available liquidity14 was $1.41 billion as of June 30,
2019.
As previously announced, CyrusOne raised approximately $200
million through the sale of approximately 5.7 million ADSs of GDS
in April 2019. The Company used the proceeds to pay down $200
million of its $1.0 billion term loan maturing in March 2023,
decreasing the remaining balance to $800 million. CyrusOne
continues to hold approximately 2.3 million ADSs, valued at
approximately $90 million based on the GDS closing price on July
30, 2019.
Additionally, as previously announced, the settlement of
approximately 2.9 million shares and receipt of $148 million in net
proceeds from first quarter 2019 sales through the Company’s ATM
equity program occurred in April 2019.
Dividend
On May 1, 2019, the Company announced a dividend of $0.46 per
share of common stock for the second quarter of 2019. The dividend
was paid on July 12, 2019, to stockholders of record at the close
of business on June 28, 2019.
Additionally, today the Company is announcing a dividend of
$0.50 per share of common stock for the third quarter of 2019, a 9%
increase in the quarterly dividend compared to the second quarter
of 2019. The dividend will be paid on October 11, 2019, to
stockholders of record at the close of business on September 27,
2019.
Guidance
CyrusOne is updating guidance for full year 2019, tightening the
guidance ranges for Total Revenue and Adjusted EBITDA, increasing
the guidance range for Normalized FFO per diluted common share, and
decreasing the guidance ranges for Capital Expenditures and Capital
Expenditures - Development. 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
Previous
2019
Guidance
Revised
2019
Guidance
Total Revenue
$960 - 1,000 million
$970 - 990 million
Lease and Other Revenues from
Customers
$835 - 865 million
$842 - 857 million
Metered Power Reimbursements
$125 - 135 million
$128 - 133 million
Adjusted EBITDA
$500 - 525 million
$507 - 517 million
Normalized FFO per diluted common
share
$3.30 - 3.40
$3.50 - 3.60
Capital Expenditures
$900 - 1,000 million
$850 - 950 million
Development(1)
$890 - 985 million
$840 - 935 million
Recurring
$10 - 15 million
$10 - 15 million
(1)Development capital expenditures
include the acquisition of land for future development.
Upcoming Conferences and Events
- Cowen Communications Infrastructure Summit on August 12-13 in
Boulder, CO
- Raymond James Park City Summit on August 14-15 in Park City,
UT
- Bank of America Merrill Lynch 2019 Global Real Estate
Conference on September 10-11 in New York City
- BMO Capital Markets Annual Real Estate Conference on September
17-18 in Chicago
Conference Call Details
CyrusOne will host a conference call on August 1, 2019, at 11:00
AM Eastern Time (10:00 AM Central Time) to discuss its results for
the second quarter of 2019. A live webcast of the conference call
will be available in the “Investors / Events & Presentations”
section of the Company's website at http://investor.cyrusone.com/events.cfm. The
presentation to be made during the call is now available in this
location. 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 August 1, 2019, through August
15, 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 10132375.
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. 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
In February 2016, the Financial Accounting Standards Board
issued ASU 2016-02 (codified in ASC 842, Leases (“ASC 842”)) 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 ASU
requires that a liability be recorded on the balance sheet for all
leases where the reporting entity is a lessee, based on the present
value of future lease obligations. A corresponding right-of-use
asset will also be recorded. Amortization of the lease obligation
and the right-of-use asset for leases classified as operating
leases are on a straight-line basis. Leases classified as financing
leases are required to be accounted for as financing arrangements
similar to the accounting treatment for capital leases under ASC
840, Leases (the former accounting standard for all leases).
We adopted ASU 2016-02 on January 1, 2019, applied the package
of practical expedients included therein and utilized the modified
retrospective transition method, with the cumulative effect of
transition, including initial recognition of lease assets and
liabilities for existing operating leases, recognized as of the
effective date, included in ASU 2018-11. By applying ASU 2018-11 at
the adoption date, the presentation of financial information for
periods prior to January 1, 2019 will remain unchanged.
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, Normalized Funds From Operations per Diluted
Common Share, 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, Normalized FFO per Diluted
Common Share, 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 make
distributions. 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.
1 The Company adopted ASC 842 effective January 1, 2019. The
adjusted 2Q’18 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. The percentage changes versus
adjusted 2Q’18 results are being shown solely for comparative and
investor usefulness purposes with respect to the Company’s 2Q’19
results. There is no impact on 2Q’18 Revenue. The estimated impacts
on 2Q’18 Net income, Adjusted EBITDA, Normalized FFO, Net income
per share, and Normalized FFO per share are $1.4 million, $4.3
million, $2.3 million, $0.01, and $0.02, respectively.
2CyrusOne is not providing forward-looking GAAP guidance for
GAAP net income (loss) per share or reconciliations of its non-GAAP
guidance. See “Guidance” for more information.
3Net 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 113.1 million for the second
quarter of 2019.
4We 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 net income (loss), adjusted for sales and
marketing expenses, general and administrative expenses,
depreciation and amortization expenses, transaction, acquisition,
integration and other related expenses, interest expense, (gain)
loss on marketable equity investment, loss on early extinguishment
of debt, other expenses, income tax expense and other 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 net (loss) income 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.
5Adjusted EBITDA, which is a non-GAAP financial measure, is
defined as net income (loss) as defined by GAAP adjusted for
interest expense, income tax benefit (expense), depreciation and
amortization, 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, (gain) loss
on marketable equity investment, other expenses and other 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.
6We 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 (loss) income computed in accordance
with GAAP before real estate depreciation and amortization. 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; loss (gain) on marketable equity
investment; new accounting standards and regulatory compliance and
the related system implementation costs; amortization of
tradenames; transaction, acquisition, integration and other related
expenses; severance and management transition costs; legal claim
costs and other items as appropriate. We believe our 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 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 (loss) income 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.
7Annualized 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.
8Recurring 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.
9CSF 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.
10Stabilized properties include data halls that have been in
service for at least 24 months or are at least 85% leased.
11Gross asset value is defined as total assets plus accumulated
depreciation.
12Long-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.
13The estimated impact of the adoption of ASC 842 on Adjusted
EBITDA for the last quarter annualized is $16.2 million.
14Liquidity 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 more than 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 nearly 50 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 more than 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
nearly 50 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
Jonathan Schildkraut, EVP & Chief
Strategy Officer
Dallas, Texas 75201
Tesh Durvasula, EVP & President,
Europe
John Gould, EVP & Chief Commercial
Officer
Phone: (972) 350-0060
Diane Morefield, EVP & Chief Financial
Officer
Kellie Teal-Guess, EVP & Chief People
Officer
Website: www.cyrusone.com
Kevin Timmons, EVP & Chief Technology
Officer
Robert Jackson, EVP General Counsel &
Secretary
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
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
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
June 30,
March 31,
June 30,
Growth %
2019
2019
2018
Yr/Yr
Revenue
$
251.5
$
225.0
$
196.9
28
%
Net operating income
148.2
141.7
128.0
16
%
Net (loss) income
(8.5
)
89.4
105.9
n/m
Funds from Operations ("FFO") - Nareit
defined
91.7
189.5
175.7
(48
)%
Normalized Funds from Operations
("Normalized FFO")
102.1
89.3
80.7
27
%
Weighted average number of common shares
outstanding - diluted for Normalized FFO
113.1
108.8
99.4
14
%
(Loss) income per share - basic
$
(0.08
)
$
0.82
$
1.07
n/m
(Loss) income per share - diluted
$
(0.08
)
$
0.82
$
1.06
n/m
Normalized FFO per diluted common
share
$
0.90
$
0.82
$
0.81
11
%
Adjusted EBITDA
$
127.3
$
119.2
$
110.6
15
%
Adjusted EBITDA as a % of Revenue
50.6
%
53.0
%
56.2
%
(5.6) pts
As of
June 30,
March 31,
June 30,
Growth %
2019
2019
2018
Yr/Yr
Balance Sheet Data
Gross investment in real estate
$
5,707.0
$
5,508.8
$
4,145.6
38
%
Accumulated depreciation
(1,207.4
)
(1,122.5
)
(900.3
)
34
%
Total investment in real estate, net
4,499.6
4,386.3
3,245.3
39
%
Cash and cash equivalents
144.1
126.0
116.2
24
%
Market value of common equity
6,532.5
5,785.0
5,784.3
13
%
Long-term debt
2,729.9
2,915.8
2,200.0
24
%
Net debt
2,617.4
2,823.2
2,098.7
25
%
Total enterprise value
9,149.9
8,608.2
7,883.0
16
%
Net debt to LQA Adjusted EBITDA(a)
5.1x
5.2x
4.7x
0.4x
Dividend Activity
Dividends per share
$
0.46
$
0.46
$
0.46
-
Portfolio Statistics
Data centers
47
48
43
9
%
Stabilized CSF (000)
3,744
3,721
3,097
21
%
Stabilized CSF % leased
89
%
90
%
92
%
(3) pts
Total CSF (000)
4,116
4,061
3,369
22
%
Total CSF % leased
84
%
86
%
88
%
(4) pts
Total NRSF (000)
7,085
7,004
5,842
21
%
(a)
March 31, 2019 period adjusted to reflect
the impact of proceeds from the April 2019 settlement of shares of
common stock sold through the Company's ATM equity program in March
2019, proceeds from the sale of GDS ADSs in April 2019, and the
repayment of $200 million of the $1.0 billion term loan in April
2019.
CyrusOne Inc.
Condensed Consolidated
Statements of Operations
(Dollars in millions, except
per share amounts)
(Unaudited)
Three Months
Six Months
Ended June 30,
Change
Ended June 30,
Change
2019
2018
$
%
2019
2018
$
%
Revenue(a)
$
251.5
$
196.9
$
54.6
28
%
$
476.5
$
393.5
83.0
21
%
Operating expenses:
Property operating expenses
103.3
68.9
34.4
50
%
186.6
136.7
49.9
37
%
Sales and marketing
5.3
4.4
0.9
20
%
10.6
9.7
0.9
9
%
General and administrative
19.7
18.6
1.1
6
%
41.9
37.9
4.0
11
%
Depreciation and amortization
102.1
77.6
24.5
32
%
204.2
152.2
52.0
34
%
Transaction, acquisition, integration and
other related expenses
1.4
0.4
1.0
n/m
1.7
2.3
(0.6
)
(26
)%
Total operating expenses
231.8
169.9
61.9
36
%
445.0
338.8
106.2
31
%
Operating income
19.7
27.0
(7.3
)
(27
)%
31.5
54.7
(23.2
)
(42
)%
Interest expense
(21.1
)
(22.8
)
1.7
(7
)%
(44.8
)
(43.6
)
(1.2
)
3
%
(Loss) gain on marketable equity
investment
(8.5
)
102.7
(111.2
)
n/m
92.7
143.2
(50.5
)
(35
)%
Loss on early extinguishment of debt
—
—
—
n/m
—
(3.1
)
3.1
n/m
Other expense
—
—
—
n/m
(0.1
)
—
(0.1
)
n/m
Net (loss) income before income
taxes
(9.9
)
106.9
(116.8
)
n/m
79.3
151.2
(71.9
)
(48
)%
Income tax benefit (expense)
1.4
(1.0
)
2.4
n/m
1.6
(1.8
)
3.4
n/m
Net (loss) income
$
(8.5
)
$
105.9
$
(114.4
)
n/m
$
80.9
$
149.4
$
(68.5
)
(46
)%
(Loss) income per share - basic
$
(0.08
)
$
1.07
$
(1.15
)
n/m
$
0.73
$
1.53
$
(0.80
)
(52
)%
(Loss) income per share -
diluted
$
(0.08
)
$
1.06
$
(1.14
)
n/m
$
0.73
$
1.52
$
(0.79
)
(52
)%
(a)
The Company adopted the new accounting
standard, ASC 842, “Leases”, in the first quarter of 2019. Revenue
includes metered power reimbursements of $31.7 million and $24.8
million for the three months ended June 30, 2019 and 2018,
respectively, and includes metered power reimbursements of $60.3
million and $46.4 million for the six months ended June 30, 2019
and 2018, respectively.
CyrusOne Inc.
Condensed Consolidated Balance
Sheets
(Dollars in millions)
(Unaudited)
June 30,
December 31,
Change
2019
2018
$
%
Assets
Investment in real estate:
Land
$
148.0
$
118.5
$
29.5
25
%
Buildings and improvements
1,689.7
1,677.5
12.2
1
%
Equipment
2,869.7
2,630.2
239.5
9
%
Gross operating real estate
4,707.4
4,426.2
281.2
6
%
Less accumulated depreciation
(1,207.4
)
(1,054.5
)
(152.9
)
14
%
Net operating real estate
3,500.0
3,371.7
128.3
4
%
Construction in progress, including land
under development
799.2
744.9
54.3
7
%
Land held for future development
200.4
176.4
24.0
14
%
Total investment in real estate, net
4,499.6
4,293.0
206.6
5
%
Cash and cash equivalents
144.1
64.4
79.7
n/m
Rent and other receivables, net
268.4
234.9
33.5
14
%
Restricted cash
1.3
—
1.3
n/m
Operating lease right-of-use assets,
net
78.5
—
78.5
n/m
Equity investments
91.9
198.1
(106.2
)
(54
)%
Goodwill
455.1
455.1
—
n/m
Intangible assets, net
215.3
235.7
(20.4
)
(9
)%
Other assets
115.5
111.3
4.2
4
%
Total assets
$
5,869.7
$
5,592.5
$
277.2
5
%
Liabilities and equity
Debt
$
2,713.8
$
2,624.7
$
89.1
3
%
Capital lease obligations
31.6
33.4
(1.8
)
(5
)%
Operating lease liabilities
114.1
—
114.1
n/m
Lease financing arrangements
—
123.3
(123.3
)
n/m
Construction costs payable
149.5
195.3
(45.8
)
(23
)%
Accounts payable and accrued expenses
112.8
121.3
(8.5
)
(7
)%
Dividends payable
53.0
51.0
2.0
4
%
Deferred revenue and prepaid rents
166.8
148.6
18.2
12
%
Deferred tax liability
65.5
68.9
(3.4
)
(5
)%
Total liabilities
3,407.1
3,366.5
40.6
1
%
Stockholders' equity
Preferred stock, $.01 par value,
100,000,000 authorized; no shares issued or outstanding
—
—
—
n/m
Common stock, $.01 par value, 500,000,000
shares authorized and 113,176,370 and 108,329,314 shares issued and
outstanding at June 30, 2019 and December 31, 2018,
respectively
1.1
1.1
—
n/m
Additional paid in capital
3,089.5
2,837.4
252.1
9
%
Accumulated deficit
(613.0
)
(600.2
)
(12.8
)
2
%
Accumulated other comprehensive loss
(15.0
)
(12.3
)
(2.7
)
22
%
Total stockholders’ equity
2,462.6
2,226.0
236.6
11
%
Total liabilities and equity
$
5,869.7
$
5,592.5
$
277.2
5
%
CyrusOne Inc.
Condensed Consolidated
Statements of Operations
(Dollars in millions, except
per share amounts)
(Unaudited)
For the three months ended:
June 30,
March 31,
December 31,
September 30,
June 30,
2019
2019
2018
2018
2018
Revenue(a)
$
251.5
$
225.0
$
221.3
$
206.6
$
196.9
Operating expenses:
Property operating expenses
103.3
83.3
78.0
77.7
68.9
Sales and marketing
5.3
5.3
5.6
4.3
4.4
General and administrative
19.7
22.2
23.4
19.3
18.6
Depreciation and amortization
102.1
102.1
97.9
84.0
77.6
Transaction, acquisition, integration and
other related expenses
1.4
0.3
1.6
1.1
0.4
Total operating expenses
231.8
213.2
206.5
186.4
169.9
Operating income
19.7
11.8
14.8
20.2
27.0
Interest expense
(21.1
)
(23.7
)
(25.3
)
(25.8
)
(22.8
)
(Loss) gain on marketable equity
investment
(8.5
)
101.2
(96.7
)
(36.6
)
102.7
Loss on early extinguishment of debt
—
—
—
—
—
Other expense
—
(0.1
)
—
—
—
Net (loss) income before income
taxes
(9.9
)
89.2
(107.2
)
(42.2
)
106.9
Income tax benefit (expense)
1.4
0.2
1.4
(0.2
)
(1.0
)
Net (loss) income
$
(8.5
)
$
89.4
$
(105.8
)
$
(42.4
)
$
105.9
(Loss) income per share - basic
$
(0.08
)
$
0.82
$
(1.00
)
$
(0.43
)
$
1.07
(Loss) income per share -
diluted
$
(0.08
)
$
0.82
$
(1.00
)
$
(0.43
)
$
1.06
(a)
The Company adopted the new accounting
standard, ASC 842, “Leases”, in the first quarter of 2019. Revenue
includes metered power reimbursements of $31.7 million, $28.5
million, $28.4 million, $29.3 million and $24.8 million for the
three months ended June 30, 2019, March 31, 2019, December 31,
2018, September 30, 2018 and June 30, 2018, respectively.
CyrusOne Inc.
Condensed Consolidated Balance
Sheets
(Dollars in millions)
(Unaudited)
June 30,
March 31,
December 31,
September 30,
June 30,
2019
2019
2018
2018
2018
Assets
Investment in real estate:
Land
$
148.0
$
124.9
$
118.5
$
125.2
$
107.4
Buildings and improvements
1,689.7
1,649.2
1,677.5
1,587.3
1,461.1
Equipment
2,869.7
2,799.6
2,630.2
2,452.5
2,050.3
Gross operating real estate
4,707.4
4,573.7
4,426.2
4,165.0
3,618.8
Less accumulated depreciation
(1,207.4
)
(1,122.5
)
(1,054.5
)
(973.4
)
(900.3
)
Net operating real estate
3,500.0
3,451.2
3,371.7
3,191.6
2,718.5
Construction in progress, including land
under development
799.2
734.7
744.9
738.6
452.6
Land held for future development
200.4
200.4
176.4
189.6
74.2
Total investment in real estate, net
4,499.6
4,386.3
4,293.0
4,119.8
3,245.3
Cash and cash equivalents
144.1
126.0
64.4
61.0
116.2
Rent and other receivables, net
268.4
248.7
234.9
224.6
201.4
Restricted cash
1.3
1.3
—
—
—
Operating lease right-of-use assets,
net
78.5
83.8
—
—
—
Equity investments
91.9
299.3
198.1
282.2
318.8
Goodwill
455.1
455.1
455.1
455.1
455.1
Intangible assets, net
215.3
226.1
235.7
248.4
190.5
Other assets
115.5
114.8
111.3
102.0
101.4
Total assets
$
5,869.7
$
5,941.4
$
5,592.5
$
5,493.1
$
4,628.7
Liabilities and equity
Debt
$
2,713.8
$
2,898.6
$
2,624.7
$
2,576.2
$
2,179.5
Capital lease obligations
31.6
33.4
33.4
36.9
14.9
Operating lease liabilities
114.1
119.6
—
—
—
Lease financing arrangements
—
—
123.3
125.8
127.8
Construction costs payable
149.5
155.5
195.3
160.5
113.3
Accounts payable and accrued expenses
112.8
81.6
121.3
96.8
91.4
Dividends payable
53.0
51.5
51.0
49.7
46.5
Deferred revenue and prepaid rents
166.8
155.9
148.6
139.5
127.1
Deferred tax liability
65.5
67.2
68.9
68.7
—
Total liabilities
3,407.1
3,563.3
3,366.5
3,254.1
2,700.5
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 113,176,370 and 108,329,314 shares issued and
outstanding at June 30, 2019 and December 31, 2018,
respectively
1.1
1.1
1.1
1.1
1.0
Additional paid in capital
3,089.5
2,938.2
2,837.4
2,685.3
2,281.5
Accumulated deficit
(613.0
)
(552.2
)
(600.2
)
(444.3
)
(353.0
)
Accumulated other comprehensive loss
(15.0
)
(9.0
)
(12.3
)
(3.1
)
(1.3
)
Total stockholders' equity
2,462.6
2,378.1
2,226.0
2,239.0
1,928.2
Total liabilities and equity
$
5,869.7
$
5,941.4
$
5,592.5
$
5,493.1
$
4,628.7
CyrusOne Inc.
Condensed Consolidated
Statements of Cash Flow
(Dollars in millions)
(Unaudited)
Six Months Ended June 30,
2019
Six Months Ended June 30,
2018
Three Months Ended June 30,
2019
Three Months Ended June 30,
2018
Cash flows from operating activities:
Net income
$
80.9
$
149.4
$
(8.5
)
$
105.9
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
204.2
152.2
102.1
77.6
Provision for bad debt expense
(0.3
)
0.4
(0.3
)
(0.1
)
Unrealized gain on marketable equity
investment
(25.8
)
(143.2
)
75.4
(102.7
)
Realized gain on marketable equity
investment
(66.9
)
—
(66.9
)
—
Loss on early extinguishment of debt
—
3.1
—
—
Interest expense amortization, net
2.3
1.8
1.1
1.1
Stock-based compensation expense
8.2
8.4
3.7
4.5
Deferred income tax expense
(3.4
)
—
(2.6
)
—
Operating lease cost
9.6
—
4.6
—
Other
(0.2
)
—
0.3
—
Change in operating assets and
liabilities:
Rent and other receivables, net and other
assets
(41.1
)
(36.8
)
(23.1
)
(18.8
)
Accounts payable and accrued expenses
(8.2
)
(3.1
)
31.6
25.8
Deferred revenue and prepaid rents
18.0
16.3
10.9
11.0
Operating lease liabilities
(9.8
)
—
(4.7
)
—
Net cash provided by operating
activities
167.5
148.5
123.6
104.3
Cash flows from investing activities:
Investment in real estate
(514.8
)
(322.7
)
(212.9
)
(177.5
)
Proceeds from sale of equity
investments
199.8
—
199.8
—
Equity investments
(0.3
)
—
(0.3
)
—
Net cash used in investing
activities
(315.3
)
(322.7
)
(13.4
)
(177.5
)
Cash flows from financing activities:
Issuance of common stock, net
252.6
152.2
147.6
9.3
Dividends paid
(101.3
)
(86.6
)
(50.9
)
(45.6
)
Proceeds from revolving credit
facility
287.8
—
12.1
—
Proceeds from unsecured term loan
—
985.4
—
(0.2
)
Repayments of unsecured term loan
(200.0
)
(902.7
)
(200.0
)
—
Payments on finance lease liabilities
(1.2
)
(5.1
)
(0.6
)
(2.5
)
Tax payment upon exercise of equity
awards
(8.8
)
(4.7
)
(0.1
)
(0.3
)
Net cash provided by (used in)
financing activities
229.1
138.5
(91.9
)
(39.3
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(0.3
)
—
(0.2
)
—
Net increase (decrease) in cash, cash
equivalents and restricted cash
81.0
(35.7
)
18.1
(112.5
)
Cash, cash equivalents and restricted cash
at beginning of period
64.4
151.9
127.3
228.7
Cash, cash equivalents and restricted
cash at end of period
$
145.4
$
116.2
$
145.4
$
116.2
Supplemental disclosure of cash flow
information:
Cash paid for interest, including amounts
capitalized of $18.1 million and $10.4 million in 2019 and 2018,
respectively
$
62.7
$
53.3
$
16.0
$
11.1
Cash paid for income taxes
2.8
3.0
2.8
2.7
Non-cash investing and financing
activities:
Construction costs payable
149.5
113.3
149.5
113.3
Dividends payable
53.0
46.5
53.0
46.5
CyrusOne Inc.
Reconciliation of Net Income
(Loss) to Net Operating Income
(Dollars in millions)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
Change
June 30,
Change
2019
2018
$
%
2019
2018
$
%
Net (Loss) Income
$
(8.5
)
$
105.9
$
(114.4
)
n/m
$
80.9
$
149.4
$
(68.5
)
(46
)%
Sales and marketing expenses
5.3
4.4
0.9
20
%
10.6
9.7
0.9
9
%
General and administrative expenses
19.7
18.6
1.1
6
%
41.9
37.9
4.0
11
%
Depreciation and amortization expenses
102.1
77.6
24.5
32
%
204.2
152.2
52.0
34
%
Transaction, acquisition, integration and
other related expenses
1.4
0.4
1.0
n/m
1.7
2.3
(0.6
)
(26
)%
Interest expense
21.1
22.8
(1.7
)
(7
)%
44.8
43.6
1.2
3
%
Loss (gain) on marketable equity
investment
8.5
(102.7
)
111.2
n/m
(92.7
)
(143.2
)
50.5
(35
)%
Loss on early extinguishment of debt
—
—
—
n/m
—
3.1
(3.1
)
n/m
Other expense
—
—
—
n/m
0.1
—
0.1
n/m
Income tax (benefit) expense
(1.4
)
1.0
(2.4
)
n/m
(1.6
)
1.8
(3.4
)
n/m
Net Operating Income
$
148.2
$
128.0
$
20.2
16
%
$
289.9
$
256.8
$
33.1
13
%
CyrusOne Inc.
Net Operating Income and
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(Dollars in millions)
(Unaudited)
Six Months Ended
Three Months Ended
June 30,
Change
June 30,
March 31,
December 31,
September 30,
June 30,
2019
2018
$
%
2019
2019
2018
2018
2018
Net Operating Income
Revenue
$
476.5
$
393.5
$
83.0
21%
$
251.5
$
225.0
$
221.3
$
206.6
$
196.9
Property operating expenses
186.6
136.7
49.9
37%
103.3
83.3
78.0
77.7
68.9
Net Operating Income (NOI)
$
289.9
$
256.8
$
33.1
13%
$
148.2
$
141.7
$
143.3
$
128.9
$
128.0
NOI as a % of Revenue
60.8
%
65.3
%
58.9
%
63.0
%
64.8
%
62.4
%
65.0
%
Reconciliation of Net Income (Loss) to
Adjusted EBITDA:
Net income (loss)
$
80.9
$
149.4
$
(68.5
)
(46)%
$
(8.5
)
$
89.4
$
(105.8
)
$
(42.4
)
$
105.9
Interest expense
44.8
43.6
1.2
3%
21.1
23.7
25.3
25.8
22.8
Income tax (benefit) expense
(1.6
)
1.8
(3.4
)
n/m
(1.4
)
(0.2
)
(1.4
)
0.2
1.0
Depreciation and amortization
204.2
152.2
52.0
34%
102.1
102.1
97.9
84.0
77.6
EBITDA (Nareit definition)(a)
$
328.3
$
347.0
$
(18.7
)
(5)%
$
113.3
$
215.0
$
16.0
$
67.6
$
207.3
Transaction, acquisition, integration and
other related expenses
1.7
2.3
(0.6
)
(26)%
1.4
0.3
1.4
1.1
0.4
Legal claim costs
0.2
0.3
(0.1
)
(33)%
0.1
0.1
0.2
0.1
0.1
Stock-based compensation expense
8.2
8.4
(0.2
)
(2)%
3.7
4.5
4.5
4.6
4.5
Severance and management transition
costs
0.1
0.7
(0.6
)
(86)%
—
0.1
1.6
—
—
Loss on early extinguishment of debt
—
3.1
(3.1
)
n/m
—
—
—
—
—
New accounting standards and regulatory
compliance and the related system implementation costs
0.6
1.5
(0.9
)
(60)%
0.3
0.3
0.7
0.8
1.0
(Gain) loss on marketable equity
investment
(92.7
)
(143.2
)
50.5
(35)%
8.5
(101.2
)
96.7
36.6
(102.7
)
Other expenses
0.1
—
0.1
n/m
—
0.1
0.1
—
—
Adjusted EBITDA
$
246.5
$
220.1
$
26.4
12%
$
127.3
$
119.2
$
121.2
$
110.8
$
110.6
Adjusted EBITDA as a % of Revenue
51.7
%
55.9
%
50.6
%
53.0
%
54.8
%
53.6
%
56.2
%
(a)
We calculate Earnings Before Interest,
Taxes, Depreciation and Amortization for Real Estate (EBITDAre) as
GAAP net income (loss) plus interest expense, income tax (benefit)
(expense) and depreciation and amortization. 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 FFO and Normalized FFO
(Dollars in millions)
(Unaudited)
Six Months Ended
Three Months Ended
June 30,
Change
June 30,
March 31,
December 31,
September 30,
June 30,
2019
2018
$
%
2019
2019
2018
2018
2018
Reconciliation of Net Income (Loss) to
FFO and Normalized FFO:
Net income (loss)
$
80.9
$
149.4
$
(68.5
)
(46
)%
$
(8.5
)
$
89.4
$
(105.8
)
$
(42.4
)
$
105.9
Real estate depreciation and
amortization
200.3
148.1
52.2
35
%
100.2
100.1
95.5
81.9
75.6
Funds from Operations ("FFO") - Nareit
defined
$
281.2
$
297.5
$
(16.3
)
(5
)%
$
91.7
$
189.5
$
(10.3
)
$
39.5
$
181.5
Loss on early extinguishment of debt
—
3.1
(3.1
)
n/m
—
—
—
—
—
Net (gain) loss on marketable equity
investment
(92.7
)
(143.2
)
50.5
(35
)%
8.5
(101.2
)
96.7
36.6
(102.7
)
New accounting standards and regulatory
compliance and the related system implementation costs
0.6
1.5
(0.9
)
(60
)%
0.3
0.3
0.7
0.8
1.0
Amortization of tradenames
0.3
0.7
(0.4
)
(57
)%
0.1
0.2
0.6
0.4
0.4
Transaction, acquisition, integration and
other related expenses
1.7
2.3
(0.6
)
(26
)%
1.4
0.3
1.4
1.1
0.4
Severance and management transition
costs
0.1
0.7
(0.6
)
(86
)%
—
0.1
1.6
—
—
Legal claim costs
0.2
0.3
(0.1
)
(33
)%
0.1
0.1
0.2
0.1
0.1
Normalized Funds from Operations
(Normalized FFO)
$
191.4
$
162.9
$
28.5
17
%
$
102.1
$
89.3
$
90.9
$
78.5
$
80.7
Normalized FFO per diluted common
share
$
1.72
$
1.66
$
0.06
4
%
$
0.90
$
0.82
$
0.86
$
0.79
$
0.81
Weighted average diluted common shares
outstanding
111.1
98.1
13.0
13
%
113.1
108.8
106.1
99.5
99.4
Additional Information:
Amortization of deferred financing costs
and bond premium
2.4
1.8
0.6
33
%
1.2
1.2
1.1
1.1
1.1
Stock-based compensation expense
8.2
8.4
(0.2
)
(2
)%
3.7
4.5
4.5
4.6
4.5
Non-real estate depreciation and
amortization
3.8
3.4
0.4
12
%
1.9
1.9
1.8
1.7
1.6
Straight line rent adjustments(a)
(16.9
)
(13.0
)
(3.9
)
30
%
(6.8
)
(10.1
)
(8.9
)
(5.8
)
(5.8
)
Deferred revenue, primarily installation
revenue(b)
10.6
5.6
5.0
89
%
4.7
5.9
16.1
7.6
2.4
Leasing commissions
(6.8
)
(6.9
)
0.1
(1
)%
(3.1
)
(3.7
)
(6.5
)
(3.3
)
(3.7
)
Recurring capital expenditures
(4.3
)
(4.7
)
0.4
(9
)%
(1.6
)
(2.7
)
(2.1
)
(3.7
)
(2.3
)
(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
June 30, 2019)
(dollars in millions)
Shares or
Equivalents
Outstanding
Market Price
as of
June 30, 2019
Market Value
Equivalents
(in millions)
Common shares
113,176,370
$
57.72
$
6,532.5
Net Debt
2,617.4
Total Enterprise Value (TEV)
$
9,149.9
Reconciliation of Net
Debt
June 30,
March 31,
(dollars in millions)
2019
2019
Long-term debt(a)
$
2,729.9
$
2,915.8
Capital lease obligations
31.6
33.4
Less:
Cash and cash equivalents
(144.1
)
(126.0
)
Net Debt
$
2,617.4
$
2,823.2
(a) Excludes adjustment for deferred
financing costs and bond premiums.
Debt Schedule (as of June 30,
2019)
(dollars in millions)
Long-term debt:
Amount
Interest Rate(a)
Maturity Date
Revolving credit facility - EUR(b)
$
153.5
EURIBOR + 145 bps(c)
March 2023(d)
Revolving credit facility - GBP(e)
6.4
GBP LIBOR + 145 bps(f)
March 2023(d)
Revolving credit facility - USD(g)
270.0
USD LIBOR + 145 bps(h)
March 2023(d)
Term loan
800.0
USD LIBOR + 140 bps(i)
March 2023
Term loan
300.0
USD LIBOR + 170bps(j)
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(k)
$
2,729.9
4.02%(l)
Weighted average term of debt:
4.9 years
(a)
Interest rate margins were 155 bps for the
revolving credit facility, 150 bps for the term loan maturing March
2023, and 180 bps for the term loan maturing March 2025 as of June
30, 2019, but subsequent to quarter end each decreased by 10
bps.
(b)
Amount outstanding is USD equivalent of
€135 million.
(c)
Interest rate as of June 30, 2019: 1.55%;
decreased to 1.45% subsequent to quarter end.
(d)
Assuming exercise of one-year extension
option.
(e)
Amount outstanding is USD equivalent of £5
million.
(f)
Interest rate as of June 30, 2019: 2.28%;
decreased to 2.18% subsequent to quarter end.
(g)
Amount converted into €238 million
pursuant to USD-EUR cross currency swap.
(h)
Interest rate as of June 30, 2019: 3.97%,
decreased to 3.87% subsequent to quarter end; adjusted rate
pursuant to USD-EUR cross currency swap: 0.99%.
(i)
Interest rate as of June 30, 2019: 3.91%;
decreased to 3.81% subsequent to quarter end.
(j)
Interest rate as of June 30, 2019: 4.21%;
decreased to 4.11% subsequent to quarter end.
(k)
Excludes adjustment for deferred financing
costs.
(l)
Weighted average interest rate calculated
using lower interest rate on swapped amount and 10 bp decreases in
interest rate margins for the revolving credit facility and term
loans that occurred subsequent to quarter end.
Interest
Summary
Three Months Ended
June 30,
March 31,
June 30,
Growth %
(dollars in millions)
2019
2019
2018
Yr/Yr
Interest expense and fees
$
28.8
$
31.8
$
27.0
7
%
Amortization of deferred financing costs
and bond premium
1.2
1.2
1.1
9
%
Capitalized interest
(8.9
)
(9.3
)
(5.3
)
68
%
Total interest expense
$
21.1
$
23.7
$
22.8
(7
)%
CyrusOne Inc.
Colocation Square Footage
(CSF) and CSF Leased
(Unaudited)
As of June 30, 2019
As of March 31, 2019
As of June 30, 2018
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
1,113
91
%
1,113
91
%
673
98%
Dallas
621
70
%
621
70
%
550
81%
Phoenix
509
100
%
509
100
%
509
92%
Cincinnati
402
79
%
402
85
%
402
93%
Houston
308
68
%
308
70
%
308
76%
San Antonio
300
100
%
300
100
%
300
100%
New York Metro
228
77
%
228
77
%
218
82%
Chicago
203
72
%
207
71
%
213
67%
Austin
106
81
%
106
80
%
106
72%
Raleigh-Durham
83
100
%
83
99
%
76
88%
Total - Domestic
3,872
84
%
3,876
85
%
3,356
88%
Frankfurt
125
99
%
98
99
%
—
—%
London
116
72
%
84
100
%
10
94%
Singapore
3
22
%
3
22
%
3
22%
Total - International
244
85
%
185
98
%
13
76%
Total - Portfolio
4,116
84
%
4,061
86
%
3,369
88%
Stabilized Properties(c)
3,744
89
%
3,721
90
%
3,097
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.
2019 Guidance
Category
Previous 2019 Guidance
Revised 2019 Guidance
Total Revenue
$960 - 1,000 million
$970 - 990 million
Lease and Other Revenues from
Customers
$835 - 865 million
$842 - 857 million
Metered Power Reimbursements
$125 - 135 million
$128 - 133 million
Adjusted EBITDA
$500 - 525 million
$507 - 517 million
Normalized FFO per diluted common
share
$3.30 - 3.40
$3.50 - 3.60
Capital Expenditures
$900 - 1,000 million
$850 - 950 million
Development(1)
$890 - 985 million
$840 - 935 million
Recurring
$10 - 15 million
$10 - 15 million
(1)Development capital expenditures
include the acquisition of land for future development.
CyrusOne is updating guidance for full year 2019, tightening the
guidance ranges for Total Revenue and Adjusted EBITDA, increasing
the guidance range for Normalized FFO per diluted common share, and
decreasing the guidance ranges for Capital Expenditures and Capital
Expenditures - 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 June 30, 2019
(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
$
76,451
305
84
%
84
%
82
45
%
111
498
—
44
Northern Virginia - Sterling V
Northern Virginia
52,037
383
84
%
92
%
11
100
%
145
539
64
63
Northern Virginia - Sterling VI
Northern Virginia
42,394
272
88
%
88
%
35
—
%
—
307
—
57
Northern Virginia - Sterling II
Northern Virginia
33,657
159
100
%
100
%
9
100
%
55
223
—
30
San Antonio III
San Antonio
33,389
132
100
%
100
%
9
100
%
43
184
—
24
Houston - Houston West I
Houston
31,273
112
86
%
86
%
11
100
%
37
161
3
28
Somerset I
New York Metro
31,002
106
79
%
82
%
27
89
%
89
222
188
15
Chicago - Aurora I
Chicago
30,462
113
98
%
98
%
34
100
%
223
371
27
71
Cincinnati - 7th Street***
Cincinnati
30,032
197
66
%
66
%
6
61
%
175
378
46
16
Dallas - Lewisville*
Dallas
26,815
114
83
%
83
%
11
84
%
54
180
—
21
Totowa - Madison**
New York Metro
26,814
51
88
%
90
%
22
93
%
59
133
—
6
Cincinnati - North Cincinnati
Cincinnati
25,063
65
99
%
99
%
45
79
%
53
163
65
14
Phoenix - Chandler VI
Phoenix
23,779
148
100
%
100
%
6
100
%
32
187
279
24
Frankfurt I
Frankfurt
22,433
53
97
%
97
%
8
91
%
57
118
—
18
San Antonio I
San Antonio
21,751
44
100
%
100
%
6
83
%
46
96
11
12
Phoenix - Chandler II
Phoenix
21,638
74
100
%
100
%
6
53
%
26
105
—
12
Houston - Houston West II
Houston
21,279
80
75
%
75
%
4
88
%
55
139
11
12
Phoenix - Chandler I
Phoenix
20,873
74
100
%
100
%
35
12
%
39
147
31
16
Wappingers Falls I**
New York Metro
20,052
37
66
%
66
%
20
91
%
15
72
—
3
Phoenix - Chandler III
Phoenix
19,867
68
100
%
100
%
2
—
%
30
101
—
14
Northern Virginia - Sterling I
Northern Virginia
19,450
78
100
%
100
%
6
81
%
49
132
—
12
Northern Virginia - Sterling III
Northern Virginia
19,261
79
100
%
100
%
7
100
%
34
120
—
15
Raleigh-Durham I
Raleigh-Durham
18,820
83
93
%
100
%
13
100
%
82
178
246
15
Austin III
Austin
18,496
62
68
%
69
%
15
98
%
21
98
67
6
San Antonio II
San Antonio
14,927
64
100
%
100
%
11
100
%
41
117
—
12
Austin II
Austin
14,311
44
94
%
98
%
2
100
%
22
68
—
5
Houston - Galleria
Houston
14,002
63
49
%
49
%
23
40
%
25
112
—
14
Florence
Cincinnati
13,630
53
99
%
99
%
47
87
%
40
140
—
9
Phoenix - Chandler V
Phoenix
13,153
72
100
%
100
%
1
95
%
16
89
94
12
Northern Virginia - Sterling IV
Northern Virginia
11,544
81
100
%
100
%
7
100
%
34
122
—
15
Phoenix - Chandler IV
Phoenix
11,373
73
100
%
100
%
3
100
%
27
103
—
12
San Antonio IV
San Antonio
11,172
60
100
%
100
%
12
100
%
27
99
—
12
Cincinnati - Hamilton*
Cincinnati
10,880
47
73
%
73
%
1
100
%
35
83
—
10
London I*
London
10,003
25
100
%
100
%
12
56
%
58
95
9
10
Frankfurt II
Frankfurt
9,497
71
100
%
100
%
9
100
%
72
152
10
28
London II*
London
8,974
49
100
%
100
%
10
100
%
93
151
4
15
Houston - Houston West III
Houston
6,546
53
36
%
40
%
10
100
%
32
95
209
6
London - Great Bridgewater**
London
6,231
10
94
%
95
%
—
—
%
1
11
—
1
Stamford - Riverbend**
New York Metro
5,407
20
23
%
23
%
—
—
%
8
28
—
2
Cincinnati - Mason
Cincinnati
5,170
34
100
%
100
%
26
98
%
17
78
—
4
Norwalk I**
New York Metro
4,437
13
100
%
100
%
4
65
%
41
58
87
2
Chicago - Lombard
Chicago
2,367
14
62
%
62
%
4
45
%
12
30
29
3
Stamford - Omega**
New York Metro
1,245
—
—
%
—
%
19
81
%
4
22
—
—
Totowa - Commerce**
New York Metro
671
—
—
%
—
%
20
44
%
6
26
—
—
Cincinnati - Blue Ash*
Cincinnati
625
6
36
%
36
%
7
100
%
2
15
—
1
Singapore - Inter Business Park**
Singapore
385
3
22
%
22
%
—
—
%
—
3
—
1
Stabilized Properties - Total
$
863,639
3,744
88
%
89
%
659
72
%
2,143
6,546
1,480
717
CyrusOne Inc.
Data Center Portfolio
As of June 30, 2019
(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
$
863,639
3,744
88%
89%
659
72%
2,143
6,546
1,480
717
Pre-Stabilized
Properties(b)
Dallas - Carrollton (DH #6)
Dallas
7,152
75
77%
77%
—
—%
21
96
—
6
Northern Virginia - Sterling VIII
Northern Virginia
4,295
61
37%
37%
4
—%
25
90
—
6
Chicago - Aurora II (DH #1)
Chicago
3,217
77
33%
35%
45
—%
14
136
272
16
Dallas - Carrollton (DH #7)
Dallas
2,827
48
38%
39%
—
—%
—
48
—
6
Dallas - Allen (DH #1)
Dallas
637
79
7%
8%
—
—%
58
137
204
6
London II* (DH #2)
London
—
15
—%
—%
—
—%
—
15
—
6
London II* (DH #3)
London
—
17
—%
—%
—
—%
—
17
—
7
All Properties - Total
$
881,768
4,116
83%
84%
709
67%
2,261
7,085
1,956
770
*
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 June 30, 2019
multiplied by 12. For the month of June 2019, customer
reimbursements were $130.7 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 July 1, 2017 through June 30, 2019, 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 June 30, 2019 was
$882.5 million. Our annualized effective rent was greater than our
annualized rent as of June 30, 2019 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 June 30,
2019 divided by total CSF. Leases signed but that have not
commenced billing as of June 30, 2019 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 June 30, 2019 divided by total Office &
Other space. Leases signed but not commenced as of June 30, 2019
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 June 30, 2019
(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
Northern Virginia - Sterling V
Northern Virginia
3Q'19
—
—
—
—
—
2.0
4
5-7
9-11
Austin III
Austin
3Q'19
—
—
—
—
—
3.0
2
15-17
17-19
London I
London
3Q'19
13
—
—
—
13
5.0
7
5-7
12-14
Frankfurt II
Frankfurt
3Q'19
19
—
—
—
19
7.0
10
10-14
20-24
Somerset II
New York Metro
4Q'19
15
—
—
—
15
2.0
3
14-18
17-21
Dallas - Carrollton
Dallas
4Q'19
—
—
—
—
—
6.0
17
11-12
28-29
Amsterdam I
Amsterdam
4Q'19
39
28
40
194
301
6.0
26
40-51
66-77
Northern Virginia - Sterling VIII
Northern Virginia
1Q'20
61
—
—
—
61
24.0
22
86-98
108-120
Northern Virginia - Sterling IX
Northern Virginia
1Q'20
—
—
—
307
307
—
7
80-89
87-96
Frankfurt III
Frankfurt
2Q'20
—
—
—
258
258
—
2
64-75
66-77
Northern Virginia - Sterling VII
Northern Virginia
3Q'20
—
—
—
167
167
—
7
84-93
91-100
Total
146
28
40
925
1,140
55.0
$
107
414-481
521-588
(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 June 30, 2019. 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
Six Months Ended
March 31
June 30
June 30
(dollars in millions)
2019
2019
2019
Capital expenditures - investment in real
estate
$299.2
$211.3
$510.5
CyrusOne Inc.
Land Available for Future
Development (Acres)
As of June 30, 2019
(Unaudited)
As of
Market
June 30, 2019
Amsterdam
8
Atlanta
44
Austin
22
Chicago
23
Cincinnati
98
Dallas
57
Houston
20
Northern Virginia
24
Phoenix
96
Quincy, Washington
48
San Antonio
22
Santa Clara
23
Total Available(a)
484
Book Value of Total Available
$
200.4
million
(a) Does not sum to total due to
rounding.
CyrusOne Inc.
Leasing Statistics - Lease
Signings
As of June 30, 2019
(Unaudited)
Period
Number of Leases(a)
Total CSF Signed(b)
Total kW Signed(c)
Total MRR Signed
(000)(d)
Weighted Average Lease
Term(e)
2Q'19
500
46,000
5,946
$1,090
67
Prior 4Q Avg.
478
138,250
22,341
$2,904
83
1Q'19
422
93,000
15,557
$2,267
56
4Q'18
482
41,000
6,768
$1,678
73
3Q'18
500
114,000
15,118
$2,218
60
2Q'18
506
305,000
51,919
$5,453
143
(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
1Q'19, and $0.1 million in 4Q'18 and 2Q'19.
(e)
Calculated on a CSF-weighted basis.
CyrusOne Inc.
New MRR Signed - Existing vs.
New Customers
As of June 30, 2019
(Dollars in thousands)
(Unaudited)
New MRR(a) Signed
($000)
3Q'17 4Q'17 1Q'18 2Q'18
3Q'18 4Q'18 1Q'19 2Q'19 Existing
Customers
$1,418
$1,063
$3,149
$4,429
$2,072
$1,226
$2,102
$974
New Customers
$810
$400
$221
$1,024
$146
$452
$165
$116
Total
$2,228
$1,463
$3,370
$5,453
$2,218
$1,678
$2,267
$1,090
% from Existing Customers
64%
73%
93%
81%
93%
73%
93%
89%
(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 3Q'17-1Q'18 and 1Q'19,
and $0.1 million in 4Q'18 and 2Q'19.
CyrusOne Inc.
Customer Sector
Diversification(a)
As of June 30, 2019
(Unaudited)
Principal Customer
Industry
Number of Locations
Annualized Rent(b)
(000)
Percentage of Portfolio
Annualized Rent(c)
Weighted Average Remaining
Lease Term in Months(d)
1
Information Technology
11
$
185,502
21.0
%
101.9
2
Information Technology
5
55,772
6.3
%
62.2
3
Information Technology
11
52,015
5.9
%
36.4
4
Information Technology
7
31,899
3.6
%
27.1
5
Information Technology
7
26,463
3.0
%
44.6
6
Financial Services
1
19,411
2.2
%
141.0
7
Information Technology
7
18,818
2.1
%
27.8
8
Research and Consulting Services
3
15,702
1.8
%
30.9
9
Healthcare
2
15,396
1.7
%
102.0
10
Industrials
5
11,109
1.3
%
11.8
11
Telecommunication Services
2
9,824
1.1
%
27.2
12
Financial Services
2
9,756
1.1
%
50.8
13
Telecommunication Services
7
9,492
1.1
%
18.3
14
Consumer Staples
3
9,222
1.0
%
19.9
15
Information Technology
4
9,044
1.0
%
49.6
16
Information Technology
4
8,704
1.0
%
104.6
17
Information Technology
2
8,026
1.0
%
60.2
18
Telecommunication Services
1
7,901
1.0
%
100.0
19
Information Technology
2
6,922
0.8
%
17.5
20
Financial Services
1
6,600
0.7
%
11.0
$
517,578
58.7
%
69.0
(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 June 30, 2019,
multiplied by 12. For the month of June 2019, customer
reimbursements were $130.7 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 July 1, 2017 through June 30, 2019, 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 June 30, 2019 was
$882.5 million. Our annualized effective rent was greater than our
annualized rent as of June 30, 2019 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
June 30, 2019, which was approximately $881.8 million.
(d)
Weighted average based on customer’s
percentage of total annualized rent expiring and is as of June 30,
2019, 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 June 30, 2019
(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
647
67
%
138
2
%
$
74,919
9
%
1,000-2,499
120
12
%
187
3
%
45,133
5
%
2,500-4,999
72
7
%
252
4
%
45,853
5
%
5,000-9,999
45
5
%
316
6
%
50,588
6
%
10,000+
83
9
%
4,898
85
%
665,275
75
%
Total
967
100
%
5,791
100
%
$
881,768
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 June 30, 2019.
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 June 30, 2019,
multiplied by 12. For the month of June 2019, customer
reimbursements were $130.7 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 July 1, 2017 through June 30, 2019, 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 June 30, 2019 was
$882.5 million. Our annualized effective rent was greater than our
annualized rent as of June 30, 2019 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 June 30, 2019
(Unaudited)
Year(a)
Number of Leases
Expiring(b)
Total Operating NRSF Expiring
(000)
Percentage of Total
NRSF
Annualized Rent(c)
(000)
Percentage of Annualized
Rent
Annualized Rent at
Expiration(d) (000)
Percentage of Annualized Rent
at Expiration
Available
1,295
18
%
Month-to-Month
766
69
1
%
$
25,784
3
%
$
28,208
3
%
2019
1,135
450
6
%
39,461
4
%
39,628
4
%
2020
2,481
751
11
%
142,189
16
%
144,133
15
%
2021
1,912
650
9
%
129,148
15
%
137,105
14
%
2022
978
602
8
%
95,629
11
%
102,425
11
%
2023
296
776
11
%
102,144
12
%
119,345
12
%
2024
151
395
6
%
59,291
7
%
76,088
8
%
2025
47
184
3
%
30,452
3
%
34,323
3
%
2026
37
620
9
%
91,657
10
%
98,570
10
%
2027
21
456
6
%
70,962
8
%
79,372
8
%
2028
17
277
4
%
31,501
4
%
36,828
4
%
2029 - Thereafter
22
560
8
%
$
63,550
7
%
$
76,072
8
%
Total
7,863
7,085
100
%
$
881,768
100
%
$
972,097
100
%
(a)
Leases that were auto-renewed prior to
June 30, 2019 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 June 30, 2019,
multiplied by 12. For the month of June 2019, customer
reimbursements were $130.7 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 July 1, 2017 through June 30, 2019, 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 June 30, 2019 was
$882.5 million. Our annualized effective rent was greater than our
annualized rent as of June 30, 2019 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 June
30, 2019, multiplied by 12.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190731005980/en/
Investor Relations Michael Schafer Vice President,
Capital Markets & Investor Relations 972-350-0060
investorrelations@cyrusone.com
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