Signed $37 Million in Annualized GAAP Revenue
and 22 Megawatts
Record Quarter-End Backlog of $97 Million in
Annualized GAAP Revenue
CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT,
today announced second quarter 2020 earnings.
Highlights
Category
2Q’20
vs.
2Q’19
Revenue
$256.4 million
2%
Net income / (loss)
$45.0 million
n/m
Adjusted EBITDA
$136.8 million
7%
Normalized FFO
$118.9 million
16%
Net income / (loss) per diluted
share
$0.39
n/m
Normalized FFO per diluted
share
$1.03
14%
- Leased 22 megawatts (“MW”) and 150,000 colocation square feet
(“CSF”) in the second quarter, totaling $37 million in annualized
GAAP revenue – Balanced geographical mix with 51% of annualized
GAAP revenue totaling $19 million signed across European markets –
Includes exercise of previously disclosed (in 3Q'19) paid
reservation for 4.5 MW totaling approximately $5.5 million in
annualized GAAP revenue
- Backlog of $97 million in annualized GAAP revenue as of the end
of the second quarter, the highest quarter-end backlog in the
company’s history, representing approximately $710 million in total
contract value
- Announcing a 2% increase in the quarterly dividend for the
third quarter of 2020 to $0.51 per share, up from $0.50 per share
in the second quarter of 2020
- Entered into forward sale agreements through the at-the-market
(“ATM”) equity program with respect to approximately 4.2 million
shares of common stock, which will result in estimated net proceeds
of approximately $292 million upon settlement by May 2021 –
Combined with the forward sale agreement entered into in the first
quarter of 2020, which will result in estimated net proceeds of
approximately $121 million upon settlement by March 2021, the
Company has approximately $413 million in available forward equity
– Settled the forward sale agreement entered into in the fourth
quarter of 2019, resulting in net proceeds of approximately $97
million, which were used to pay down a portion of amounts
outstanding on the Company’s unsecured revolving credit
facility
“We had another very strong leasing quarter with broad demand
across our markets in the U.S. and Europe, and the nearly $100
million revenue backlog positions us well for growth in 2021 and
beyond,” said Bruce Duncan, president and chief executive officer
of CyrusOne. “We also continue to strengthen our balance sheet, and
our $1.5 billion in available liquidity, including more than $400
million in forward equity, gives us significant capacity to fund
our development pipeline while managing our leverage.”
Second Quarter 2020 Financial Results
Revenue was $256.4 million for the second quarter, compared to
$251.5 million for the same period in 2019, an increase of 2%. The
increase in revenue was driven primarily by a 7% increase in
occupied CSF, lease termination fees totaling $3.0 million, and
additional interconnection services, partially offset by the impact
of equipment sales and rent churn. Revenue in the second quarter of
2020 included $6.9 million of equipment sales, compared to $17.1
million of equipment sales for the same period in 2019.
Net income was $45.0 million for the second quarter, compared to
net loss of $(8.5) million in the same period in 2019. Net income
for the second quarter included a $50.4 million gain on the
Company’s equity investment in GDS Holdings Limited (“GDS”), a
leading data center provider in China, compared to an $(8.5)
million loss in the second quarter of 2019. Also in the second
quarter, the Company recognized a $(13.9) million loss associated
with a change in fair value on the undesignated portion of its net
investment hedge. Net income per diluted common share1 was $0.39 in
the second quarter of 2020, compared to net loss per diluted common
share of $(0.08) in the same period in 2019.
Net operating income (“NOI”)2 was $157.4 million for the second
quarter, compared to $148.2 million in the same period in 2019, an
increase of 6%. Adjusted EBITDA3 was $136.8 million for the second
quarter, compared to $127.3 million in the same period in 2019, an
increase of 7%.
Normalized Funds From Operations (“Normalized FFO”)4 was $118.9
million for the second quarter, compared to $102.1 million in the
same period in 2019, an increase of 16%. Normalized FFO per diluted
common share was $1.03 in the second quarter of 2020, compared to
$0.90 in the same period in 2019, an increase of 14%.
Leasing Activity
CyrusOne leased approximately 22 MW of power and 150,000 CSF in
the second quarter, representing approximately $3.1 million in
monthly recurring rent, inclusive of the monthly impact of
installation charges. The leasing for the quarter represents
approximately $36.8 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 84 months (7.0
years), and the weighted average remaining lease term of CyrusOne’s
portfolio is 52 months (taking into consideration the impact of the
backlog). Recurring rent churn percentage6 for the second quarter
was 1.1%, compared to 0.6% for the same period in 2019.
Portfolio Development and Percentage CSF Leased
In the second quarter, the Company completed construction on
212,000 CSF and 27 MW of power capacity in San Antonio, Phoenix,
Northern Virginia, and London. Percentage CSF leased7 as of the end
of the second quarter was 88% for stabilized properties8 and 83%
overall. In addition, the Company has development projects underway
in Frankfurt, Dublin, London, Northern Virginia, San Antonio, the
New York Metro area, and Council Bluffs (IA) that are expected to
add approximately 336,000 CSF and 82 MW of power capacity plus
337,000 square feet of powered shell.
Balance Sheet and Liquidity
As of June 30, 2020, the Company had gross asset value9 totaling
approximately $8.0 billion, an increase of approximately 13% over
gross asset value as of June 30, 2019. CyrusOne had $3.19 billion
of long-term debt10, $71 million of cash and cash equivalents, and
$1.06 billion available under its unsecured revolving credit
facility as of June 30, 2020. Net debt10 was $3.15 billion as of
June 30, 2020, representing approximately 27% of the Company's
total enterprise value as of June 30, 2020 of $11.7 billion, or
5.0x Adjusted EBITDA for the last quarter annualized (after further
adjusting net debt to reflect the pro forma impact of settlement of
the forward sale agreements). 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 periods prior to 2019, net debt to Adjusted
EBITDA for the last quarter annualized was 4.9x11. Available
liquidity12 was $1.54 billion as of June 30, 2020.
During the second quarter of 2020, the Company entered into
forward sale agreements through the ATM equity program with respect
to approximately 4.2 million shares of common stock, which will
result in estimated net proceeds of approximately $292 million upon
settlement by May 2021. Combined with the forward sale agreement
entered into in the first quarter of 2020, which will result in
estimated net proceeds of approximately $121 million upon
settlement by March 2021, the Company has $413 million in available
forward equity (no portion of the forward sale agreements entered
into during the first and second quarters of 2020 has been settled
as of July 29, 2020). During the second quarter of 2020, the
Company settled the forward sale agreement entered into in the
fourth quarter of 2019, resulting in net proceeds of approximately
$97 million, which were used to pay down a portion of amounts
outstanding on the Company’s unsecured revolving credit
facility.
Also during the second quarter of 2020, the Company entered into
sales agreements pursuant to which the Company may issue and sell
from time to time shares of its common stock having an aggregate
sales price of up to $750 million through its ATM equity program.
This new ATM equity program replaced the prior ATM equity program.
As of June 30, 2020, there was approximately $450 million in
remaining availability under the new ATM equity program.
Additionally, the Company raised approximately $20 million
through the sale of approximately 0.2 million American depository
shares (“ADSs”) of GDS. The settlement of a portion of the ADSs and
receipt of the associated proceeds occurred in July 2020. After
taking into account the impact of the sale of ADSs, CyrusOne owned
approximately 2.1 million ADSs with a total value of approximately
$164 million based on GDS’s share price as of June 30, 2020.
Dividend
On April 29, 2020, the Company announced a dividend of $0.50 per
share of common stock for the second quarter of 2020. The dividend
was paid on July 10, 2020, to stockholders of record at the close
of business on June 26, 2020.
Additionally, today the Company is announcing a dividend of
$0.51 per share of common stock for the third quarter of 2020, a 2%
increase in the quarterly dividend compared to the second quarter
of 2020. The dividend will be paid on October 9, 2020, to
stockholders of record at the close of business on September 25,
2020.
Guidance
CyrusOne is updating guidance for full year 2020, increasing the
upper and lower ends of the guidance range for Capital Expenditures
and Capital Expenditures - Development and reaffirming its other
guidance ranges. 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. The COVID-19 pandemic continues to evolve
rapidly and the potential impact on our business remains uncertain
and unpredictable.
CyrusOne does not provide forward-looking guidance for GAAP
financial measures (other than Total 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, Impairment losses and loss on disposal of assets and other
charges in its reconciliation of historic numbers, the amount of
which, based on historical experience, could be significant.
Category
Previous
2020 Guidance
Current
2020 Guidance
Total Revenue
$1,010 - 1,045 million
$1,010 - 1,045 million
Lease and Other Revenues from
Customers
$865 - 890 million
$865 - 890 million
Metered Power Reimbursements
$145 - 155 million
$145 - 155 million
Adjusted EBITDA
$525 - 550 million
$525 - 550 million
Normalized FFO per diluted common
share
$3.75 - 3.90
$3.75 - 3.90
Capital Expenditures
$750 - 850 million
$850 - 950 million
Development(1)
$735 - 830 million
$835 - 930 million
Recurring
$15 - 20 million
$15 - 20 million
(1) Development capital expenditures
include the acquisition of land for future development.
Announcing Retirement of Diane Morefield, Executive Vice
President & Chief Financial Officer
CyrusOne is also announcing today that following a successful 40
year career, including the last four years with the company, Diane
Morefield plans to retire in early 2021. Ms. Morefield will
continue in her role as Executive Vice President & Chief
Financial Officer until her successor is appointed, which is
targeted to be by December 31, 2020. She will remain with the
company during a transition period until her retirement date on
March 1, 2021. CyrusOne is conducting a search for its next CFO,
which will include consideration of internal and external
candidates.
“On behalf of the entire Board and the management team, we thank
Diane for her many contributions to CyrusOne since she joined the
company in 2016,” said Duncan. “She has been instrumental in the
company’s growth, and her leadership will be missed. We are
grateful that she has agreed to remain with the company to
facilitate a smooth transition. We wish Diane nothing but the best
in her retirement.”
“It has been a privilege to be part of the success story at
CyrusOne,” said Morefield. “I’m proud of the team we have built and
the financial foundation we have set to continue to support the
future growth of the company. I look forward to ensuring a smooth
transition.”
Upcoming Conferences and Events
- Cowen Virtual Communications Infrastructure Summit on August
11-12
- BMO Capital Markets Virtual Real Assets Conference on September
2-3
- Deutsche Bank Technology Conference on September 14-15 in San
Francisco, CA*
- Bank of America Merrill Lynch 2020 Global Real Estate
Conference on September 15-16 in New York City*
- Raymond James Park City Summit on September 21-22 in Park City,
UT
*Tentative as conference may be virtual
Conference Call Details
CyrusOne will host a conference call on July 30, 2020, at 11:00
AM Eastern Time (10:00 AM Central Time) to discuss its results for
the second quarter 2020. 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
July 30, 2020, through August 13, 2020. 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
10145802.
Safe Harbor
This release and the documents incorporated by reference herein
contain certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. We intend
such forward- looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and include this statement
for purposes of complying with these safe harbor provisions. 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 and
our customers’ respective businesses and industries, 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, (i) the potential widespread and highly uncertain
impact of public health outbreaks, epidemics and pandemics, such as
the COVID-19 pandemic; (ii) loss of key customers; (iii) economic
downturn, natural disaster or oversupply of data centers in the
limited geographic areas that we serve; (iv) risks related to the
development of our properties including, without limitation,
obtaining applicable permits, power and connectivity and our
ability to successfully lease those properties; (v) weakening in
the fundamentals for data center real estate, including but not
limited to, decreases in or slowed growth of global data,
e-commerce and demand for outsourcing of data storage and
cloud-based applications; (vi) loss of access to key third-party
service providers and suppliers; (vii) risks of loss of power or
cooling which may interrupt our services to our customers; (viii)
inability to identify and complete acquisitions and operate
acquired properties, including those acquired in the acquisition of
Zenium Topco Ltd. and certain other affiliated entities (“Zenium”);
(ix) our failure to obtain necessary outside financing on favorable
terms, or at all; (x) restrictions in the instruments governing our
indebtedness; (xi) risks related to environmental matters; (xii)
unknown or contingent liabilities related to our acquisitions;
(xiii) significant competition in our industry; (xiv) loss of key
personnel; (xv) risks associated with real estate assets and the
industry; (xvi) failure to maintain our status as a REIT (as
defined below) or to comply with the highly technical and complex
REIT provisions of the Internal Revenue Code of 1986, as amended;
(xvii) REIT distribution requirements could adversely affect our
ability to execute our business plan; (xviii) insufficient cash
available for distribution to stockholders; (xix) future offerings
of debt may adversely affect the market price of our common stock;
(xx) increases in market interest rates will increase our
borrowings costs and may drive potential investors to seek higher
dividend yields and reduce demand for our common stock; (xxi)
market price and volume of stock could be volatile; (xxii) risks
related to regulatory changes impacting our customers and demand
for colocation space in particular geographies; (xxiii) our
international activities, including those now conducted as a result
of the Zenium acquisition and land acquisitions, are subject to
special risks different from those faced by us in the United
States; (xxiv) the significant uncertainty that remains about the
future relationship between the United Kingdom and the European
Union as a result of the United Kingdom’s withdrawal from the
European Union; (xxv) expanded and widened price increases in
certain selective materials for data center development capital
expenditures due to international trade negotiations; (xxvi) a
failure to comply with anti-corruption laws and regulations;
(xxvii) legislative or other actions relating to taxes; and
(xxviii) other factors affecting the real estate and technology
industries generally. More information on potential risks and
uncertainties is available in our recent filings with the
Securities and Exchange Commission (SEC), including CyrusOne’s Form
10-K report, Form 10-Q reports, and Form 8-K reports. We disclaim
any obligation other than as required by law to publicly update or
revise any forward-looking statement to reflect changes in
underlying assumptions or factors or for new information, data or
methods, future events or other changes.
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 recognized on the effective date. By applying the
modified retrospective transition method, the presentation of
financial information for periods prior to January 1, 2019 was not
restated.
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, or a
substitute for, 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, which are non-GAAP
financial measures commonly used in the REIT industry, as
supplemental performance measures. Management uses these measures
as supplemental performance measures because, when compared period
over period, they 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), these measures are used by investors as a basis to
evaluate REITs. Other REITs 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 presented in
accordance with GAAP 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
our cash needs, including our ability to make distributions. These
measures also should not be used as supplements to or substitutes
for cash flow from operating activities computed in accordance with
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 115.7 million for the second
quarter of 2020 and 113.1 million for the second quarter of
2019.
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 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, net,
(Gain) loss on marketable equity investment, Loss on early
extinguishment of debt, Impairment losses, Foreign currency and
derivative losses, net, Other (income) expense, Income tax benefit
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 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.
3Adjusted EBITDA, which is a non-GAAP financial measure, is
defined as Net income (loss) as defined by GAAP adjusted for
Interest expense, net; Income tax benefit ; Depreciation and
amortization expenses; Impairment losses; Transaction, acquisition,
integration and other related expenses; Legal claim costs;
Stock-based compensation expense; Cash severance and management
transition costs; Severance-related stock compensation 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; Foreign currency and
derivative losses (gains), net; Other expense (income) 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.
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
Impairment losses and gain on disposal of assets. 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 adjusted for Loss on early
extinguishment of debt; (Gain) loss on marketable equity
investment; Foreign currency and derivative losses (gains), net;
New accounting standards and regulatory compliance and the related
system implementation costs; Amortization of tradenames;
Transaction, acquisition, integration and other related expenses;
Cash severance and management transition costs; Severance-related
stock compensation 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 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.
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 percentage 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.
7Percentage CSF leased is calculated by dividing CSF under
signed leases for colocation space (whether or not the lease has
commenced billing) by total CSF. Percentage 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 discounts / 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 finance lease liabilities, offset by cash and cash
equivalents.
11The estimated impact of the adoption of ASC 842 on Adjusted
EBITDA for the last quarter annualized is $15.8 million.
12Liquidity is calculated as cash, cash equivalents, and
temporary cash investments on hand, plus the undrawn capacity on
CyrusOne’s revolving credit facility, plus the pro forma impact of
settlement of the forward sale agreements.
About CyrusOne
CyrusOne (NASDAQ: CONE) is a 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
approximately 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 more
than 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 approximately 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 more
than 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
2850 N. Harwood Street, Ste.
2200
Bruce Duncan, President and
CEO
John Gould, EVP & Chief
Commercial Officer
Dallas, Texas 75201
Diane Morefield, EVP & Chief
Financial Officer
Kellie Teal-Guess, EVP &
Chief People Officer
Phone: (972) 350-0060
Kevin Timmons, EVP & Chief
Technology Officer
Robert Jackson, EVP General
Counsel & Secretary
Website: www.cyrusone.com
Jonathan Schildkraut, EVP &
Chief Strategy Officer
Matt Pullen, EVP & Managing
Director, Europe
Analyst Coverage
Firm
Analyst
Phone
Number
Bank of America Merrill Lynch
Michael J. Funk
(646) 855-5664
Barclays
Tim Long
(212) 526-4043
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
Green Street Advisors
David Guarino
(949) 640-8780
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 %
2020
2020
2019
Yr/Yr
Revenue
$
256.4
$
245.9
$
251.5
2
%
Net operating income
157.4
153.3
148.2
6
%
Net income (loss)
45.0
14.7
(8.5
)
n/m
Funds from Operations ("FFO") -
Nareit defined
154.9
120.4
91.7
69
%
Normalized Funds from Operations
("Normalized FFO")
118.9
111.8
102.1
16
%
Weighted average number of common
shares outstanding - diluted for Normalized FFO
115.7
115.1
113.1
2
%
Income (loss) per share -
basic
$
0.39
$
0.13
$
(0.08
)
n/m
Income (loss) per share -
diluted
$
0.39
$
0.13
$
(0.08
)
n/m
Normalized FFO per diluted common
share
$
1.03
$
0.97
$
0.90
14
%
Adjusted EBITDA
$
136.8
$
132.2
$
127.3
7
%
Adjusted EBITDA as a % of
Revenue
53.4
%
53.8
%
50.6
%
2.8 pts
As of
June 30,
March 31,
June 30,
Growth %
2020
2020
2019
Yr/Yr
Balance Sheet Data
Gross investment in real
estate
$
6,504.9
$
6,260.9
$
5,707.0
14
%
Accumulated depreciation
(1,562.7
)
(1,469.5
)
(1,207.4
)
29
%
Total investment in real estate,
net
4,942.2
4,791.4
4,499.6
10
%
Cash and cash equivalents
70.7
57.3
144.1
(51
)%
Market value of common equity
8,501.0
7,102.1
6,532.5
30
%
Long-term debt
3,191.3
3,084.0
2,729.9
17
%
Net debt
3,149.4
3,056.1
2,617.4
20
%
Total enterprise value
11,650.4
10,158.2
9,149.9
27
%
Net debt to LQA Adjusted
EBITDA(a)
5.0x
5.4x
5.1x
(0.1)x
Dividend Activity
Dividends per share
$
0.50
$
0.50
$
0.46
9
%
Portfolio Statistics
Data centers
51
48
47
9
%
Stabilized CSF (000)
4,055
4,035
3,744
8
%
Stabilized CSF % leased
88
%
88
%
89
%
(1) pts
Total CSF (000)
4,427
4,215
4,116
8
%
Total CSF % leased
83
%
86
%
84
%
(1) pts
Total GSF (000)
7,605
7,243
7,085
7
%
(a)
June 30, 2020 and March 31, 2020 periods
adjusted to reflect the pro forma impact of settlement of the
forward sale agreements.
CyrusOne Inc.
Condensed Consolidated
Statements of Operations
(Dollars in millions, except
per share amounts)
(Unaudited)
Three Months Ended June
30,
Change
Six Months Ended June
30,
Change
2020
2019
$
%
2020
2019
$
%
Revenue(a)
$
256.4
$
251.5
$
4.9
2
%
$
502.3
$
476.5
$
25.8
5
%
Operating expenses:
Property operating expenses
99.0
103.3
(4.3
)
(4
)%
191.6
186.6
5.0
3
%
Sales and marketing
3.8
5.3
(1.5
)
(28
)%
8.5
10.6
(2.1
)
(20
)%
General and administrative
20.3
19.7
0.6
3
%
47.2
41.9
5.3
13
%
Depreciation and amortization
109.7
102.1
7.6
7
%
217.8
204.2
13.6
7
%
Transaction, acquisition,
integration and other related expenses
0.1
1.4
(1.3
)
(93
)%
0.5
1.7
(1.2
)
(71
)%
Impairment losses
2.4
—
2.4
n/m
2.4
—
2.4
n/m
Total operating expenses
235.3
231.8
3.5
2
%
468.0
445.0
23.0
5
%
Operating income
21.1
19.7
1.4
7
%
34.3
31.5
2.8
9
%
Interest expense, net
(13.9
)
(21.1
)
7.2
(34
)%
(29.9
)
(44.8
)
14.9
(33
)%
Gain (loss) on marketable equity
investment
50.4
(8.5
)
58.9
n/m
65.1
92.7
(27.6
)
(30
)%
Loss on early extinguishment of
debt
—
—
—
n/m
(3.4
)
—
(3.4
)
n/m
Foreign currency and derivative
losses, net
(13.9
)
—
(13.9
)
n/m
(8.8
)
—
(8.8
)
n/m
Other income (expense)
0.1
—
0.1
n/m
—
(0.1
)
0.1
(100
)%
Net income (loss) before
income taxes
43.8
(9.9
)
53.7
n/m
57.3
79.3
(22.0
)
(28
)%
Income tax benefit
1.2
1.4
(0.2
)
(14
)%
2.4
1.6
0.8
50
%
Net income (loss)
$
45.0
$
(8.5
)
$
53.5
n/m
$
59.7
$
80.9
$
(21.2
)
(26
)%
Income (loss) per share -
basic
$
0.39
$
(0.08
)
$
0.47
n/m
$
0.52
$
0.73
$
(0.21
)
(29
)%
Income (loss) per share -
diluted
$
0.39
$
(0.08
)
$
0.47
n/m
$
0.52
$
0.73
$
(0.21
)
(29
)%
(a)
Revenue includes metered power
reimbursements of $37.1 million and $31.7 million for the three
months ended June 30, 2020 and 2019, respectively, and includes
metered power reimbursements of $71.9 million and $60.3 million for
the six months ended June 30, 2020 and 2019, respectively.
CyrusOne Inc.
Condensed Consolidated Balance
Sheets
(Dollars in millions)
(Unaudited)
June 30,
December 31,
Change
2020
2019
$
%
Assets
Investment in real estate:
Land
$
175.5
$
147.6
$
27.9
19
%
Buildings and improvements
1,857.9
1,761.4
96.5
5
%
Equipment
3,229.5
3,028.2
201.3
7
%
Gross operating real estate
5,262.9
4,937.2
325.7
7
%
Less accumulated depreciation
(1,562.7
)
(1,379.2
)
(183.5
)
13
%
Net operating real estate
3,700.2
3,558.0
142.2
4
%
Construction in progress,
including land under development
1,024.8
946.3
78.5
8
%
Land held for future
development
217.2
206.0
11.2
5
%
Total investment in real estate,
net
4,942.2
4,710.3
231.9
5
%
Cash and cash equivalents
70.7
76.4
(5.7
)
(7
)%
Rent and other receivables,
net
307.0
291.9
15.1
5
%
Restricted cash
1.3
1.3
—
n/m
Operating lease right-of-use
assets, net
204.7
161.9
42.8
26
%
Equity investments
184.9
135.1
49.8
37
%
Goodwill
455.1
455.1
—
n/m
Intangible assets, net
174.9
196.1
(21.2
)
(11
)%
Other assets
127.3
113.9
13.4
12
%
Total assets
$
6,468.1
$
6,142.0
$
326.1
5
%
Liabilities and equity
Debt
$
3,156.9
$
2,886.6
$
270.3
9
%
Finance lease liabilities
28.8
31.8
(3.0
)
(9
)%
Operating lease liabilities
240.5
195.8
44.7
23
%
Construction costs payable
155.7
176.3
(20.6
)
(12
)%
Accounts payable and accrued
expenses
127.0
122.7
4.3
4
%
Dividends payable
59.7
58.6
1.1
2
%
Deferred revenue and prepaid
rents
166.2
163.7
2.5
2
%
Deferred tax liability
55.8
60.5
(4.7
)
(8
)%
Other liabilities
16.8
11.4
5.4
47
%
Total liabilities
4,007.4
3,707.4
300.0
8
%
Stockholders' equity
Preferred stock, $.01 par value,
100,000,000 authorized; no shares issued or outstanding
—
—
—
n/m
Common stock, $0.01 par value, 500,000,000
shares authorized and 116,852,894 and 114,808,898 shares issued and
outstanding at June 30, 2020 and December 31, 2019,
respectively
1.2
1.1
0.1
9.1
%
Additional paid in capital
3,305.9
3,202.0
103.9
3
%
Accumulated deficit
(824.7
)
(767.3
)
(57.4
)
7
%
Accumulated other comprehensive
loss
(21.7
)
(1.2
)
(20.5
)
n/m
Total stockholders’
equity
2,460.7
2,434.6
26.1
1
%
Total liabilities and equity
$
6,468.1
$
6,142.0
$
326.1
5
%
CyrusOne Inc.
Condensed Consolidated
Statements of Operations
(Dollars in millions, except
per share amounts)
(Unaudited)
For the three months ended:
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
Revenue(a)
$
256.4
$
245.9
$
253.9
$
250.9
$
251.5
Operating expenses:
Property operating expenses
99.0
92.6
93.8
103.0
103.3
Sales and marketing
3.8
4.7
4.5
5.1
5.3
General and administrative
20.3
26.9
21.8
19.8
19.7
Depreciation and amortization
109.7
108.1
108.1
105.4
102.1
Transaction, acquisition,
integration and other related expenses
0.1
0.4
2.7
4.4
1.4
Impairment losses
2.4
—
0.7
—
—
Total operating expenses
235.3
232.7
231.6
237.7
231.8
Operating income
21.1
13.2
22.3
13.2
19.7
Interest expense, net
(13.9
)
(16.0
)
(17.6
)
(19.6
)
(21.1
)
Gain (loss) on marketable equity
investment
50.4
14.7
27.2
12.4
(8.5
)
Loss on early extinguishment of
debt
—
(3.4
)
(71.8
)
—
—
Foreign currency and derivative
(losses) gains, net
(13.9
)
5.1
(13.0
)
5.5
—
Other income (expense)
0.1
(0.1
)
0.7
(0.9
)
—
Net income (loss) before
income taxes
43.8
13.5
(52.2
)
10.6
(9.9
)
Income tax benefit
1.2
1.2
0.1
2.0
1.4
Net income (loss)
$
45.0
$
14.7
$
(52.1
)
$
12.6
$
(8.5
)
Income (loss) per share -
basic
$
0.39
$
0.13
$
(0.46
)
$
0.11
$
(0.08
)
Income (loss) per share -
diluted
$
0.39
$
0.13
$
(0.46
)
$
0.11
$
(0.08
)
(a)
Revenue includes metered power
reimbursements of $37.1 million, $34.8 million, $37.5 million,
$41.1 million and $31.7 million for the three months ended June 30,
2020, March 31, 2020, December 31, 2019, September 30, 2019 and
June 30, 2019, respectively.
CyrusOne Inc.
Condensed Consolidated Balance
Sheets
(Dollars in millions)
(Unaudited)
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
Assets
Investment in real estate:
Land
$
175.5
$
172.2
$
147.6
$
147.3
$
148.0
Buildings and improvements
1,857.9
1,786.3
1,761.4
1,732.0
1,689.7
Equipment
3,229.5
3,106.4
3,028.2
2,950.3
2,869.7
Gross operating real estate
5,262.9
5,064.9
4,937.2
4,829.6
4,707.4
Less accumulated depreciation
(1,562.7
)
(1,469.5
)
(1,379.2
)
(1,292.7
)
(1,207.4
)
Net operating real estate
3,700.2
3,595.4
3,558.0
3,536.9
3,500.0
Construction in progress,
including land under development
1,024.8
990.6
946.3
836.9
799.2
Land held for future
development
217.2
205.4
206.0
204.3
200.4
Total investment in real estate,
net
4,942.2
4,791.4
4,710.3
4,578.1
4,499.6
Cash and cash equivalents
70.7
57.3
76.4
51.7
144.1
Rent and other receivables,
net
307.0
305.3
291.9
279.3
268.4
Restricted cash
1.3
1.3
1.3
1.3
1.3
Operating lease right-of-use
assets, net
204.7
208.6
161.9
90.7
78.5
Equity investments
184.9
153.1
135.1
104.3
91.9
Goodwill
455.1
455.1
455.1
455.1
455.1
Intangible assets, net
174.9
184.5
196.1
203.7
215.3
Other assets
127.3
121.9
113.9
128.7
115.5
Total assets
$
6,468.1
$
6,278.5
$
6,142.0
$
5,892.9
$
5,869.7
Liabilities and equity
Debt
$
3,156.9
$
3,047.0
$
2,886.6
$
2,776.1
$
2,713.8
Finance lease liabilities
28.8
29.4
31.8
30.7
31.6
Operating lease liabilities
240.5
243.0
195.8
124.3
114.1
Construction costs payable
155.7
183.4
176.3
131.2
149.5
Accounts payable and accrued
expenses
127.0
121.0
122.7
132.4
112.8
Dividends payable
59.7
58.7
58.6
57.7
53.0
Deferred revenue and prepaid
rents
166.2
167.3
163.7
164.0
166.8
Deferred tax liability
55.8
57.0
60.5
59.6
65.5
Other liabilities
16.8
7.9
11.4
—
—
Total liabilities
4,007.4
3,914.7
3,707.4
3,476.0
3,407.1
Stockholders' equity
Preferred stock, $.01 par value,
100,000,000 authorized; no shares issued or outstanding
—
—
—
—
—
Common stock, $0.01 par value,
500,000,000 shares authorized and 116,852,894 and 114,808,898
shares issued and outstanding at June 30, 2020 and December 31,
2019, respectively
1.2
1.2
1.1
1.1
1.1
Additional paid in capital
3,305.9
3,199.9
3,202.0
3,094.2
3,089.5
Accumulated deficit
(824.7
)
(811.0
)
(767.3
)
(657.4
)
(613.0
)
Accumulated other comprehensive
loss
(21.7
)
(26.3
)
(1.2
)
(21.0
)
(15.0
)
Total stockholders'
equity
2,460.7
2,363.8
2,434.6
2,416.9
2,462.6
Total liabilities and
equity
$
6,468.1
$
6,278.5
$
6,142.0
$
5,892.9
$
5,869.7
CyrusOne Inc.
Condensed Consolidated
Statements of Cash Flow
(Dollars in millions)
(Unaudited)
Six Months
Six Months
Three Months
Three Months
Ended June 30,
Ended June 30,
Ended June 30,
Ended June 30,
2020
2019
2020
2019
Cash flows from operating
activities:
Net income (loss)
$
59.7
$
80.9
$
45.0
$
(8.5
)
Adjustments to reconcile net
income (loss) to net cash provided by operating activities:
Depreciation and amortization
217.8
204.2
109.7
102.1
Provision for bad debt
expense
—
(0.3
)
0.1
(0.3
)
(Gain) loss on marketable equity
investment
(65.1
)
(92.7
)
(50.4
)
8.5
Foreign currency and derivative
losses, net
8.8
—
13.9
—
Proceeds from swap
terminations
2.9
—
—
—
Impairment on land held for
future development
2.2
—
2.2
—
Loss on early extinguishment of
debt
3.4
—
—
—
Interest expense amortization,
net
3.6
2.3
1.6
1.1
Stock-based compensation
expense
7.0
8.2
3.3
3.7
Deferred income tax benefit
(4.2
)
(3.4
)
(2.2
)
(2.6
)
Operating lease cost
13.0
9.6
6.8
4.6
Other income (expense)
0.5
(0.2
)
0.3
0.3
Change in operating assets and
liabilities:
Rent and other receivables, net
and other assets
(31.0
)
(41.1
)
(1.6
)
(23.1
)
Accounts payable and accrued
expenses
4.7
(8.2
)
5.9
31.6
Deferred revenue and prepaid
rents
2.0
18.0
(1.2
)
10.9
Operating lease liabilities
(11.1
)
(9.8
)
(5.5
)
(4.7
)
Net cash provided by operating
activities
214.2
167.5
127.9
123.6
Cash flows from investing
activities:
Investments in real estate
(458.0
)
(514.8
)
(261.5
)
(212.9
)
Proceeds from sale of equity
investments
8.2
199.8
8.2
199.8
Equity investments
(4.7
)
(0.3
)
(1.4
)
(0.3
)
Proceeds from the sale of real
estate assets
0.3
—
0.3
—
Net cash used in investing
activities
(454.2
)
(315.3
)
(254.4
)
(13.4
)
Cash flows from financing
activities:
Issuance of common stock, net
103.3
252.6
102.7
147.6
Dividends paid
(116.1
)
(101.3
)
(57.7
)
(50.9
)
Payment of deferred financing
costs
(12.5
)
—
1.1
—
Proceeds from revolving credit
facility
438.8
287.8
194.4
12.1
Repayments of revolving credit
facility
(723.1
)
—
(100.0
)
—
Proceeds from Euro bond
550.2
—
(0.4
)
—
Proceeds from unsecured term
loan
1,100.0
—
—
—
Repayments of unsecured term
loan
(1,100.0
)
(200.0
)
—
(200.0
)
Payments on finance lease
liabilities
(1.3
)
(1.2
)
(0.6
)
(0.6
)
Tax payment upon exercise of
equity awards
(6.4
)
(8.8
)
(0.1
)
(0.1
)
Net cash provided by (used in)
financing activities
232.9
229.1
139.4
(91.9
)
Effect of exchange rate changes
on cash, cash equivalents and restricted cash
1.4
(0.3
)
0.5
(0.2
)
Net (decrease) increase in cash,
cash equivalents and restricted cash
(5.7
)
81.0
13.4
18.1
Cash, cash equivalents and
restricted cash at beginning of period
77.7
64.4
58.6
127.3
Cash, cash equivalents and restricted
cash at end of period
$
72.0
$
145.4
$
72.0
$
145.4
Supplemental disclosure of cash flow
information:
Cash paid for interest, including amounts
capitalized of $11.4 million and $18.1 million in 2020 and 2019,
respectively
$
30.0
$
62.7
$
21.7
$
16.0
Cash paid for income taxes
0.1
2.8
0.1
2.8
Non-cash investing and financing
activities:
Construction costs payable
155.7
149.5
155.7
149.5
Dividends payable
59.7
53.0
59.7
53.0
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
2020
2019
$
%
2020
2019
$
%
Net income (loss)
$
45.0
$
(8.5
)
$
53.5
n/m
$
59.7
$
80.9
$
(21.2
)
(26
)%
Sales and marketing expenses
3.8
5.3
(1.5
)
(28
)%
8.5
10.6
(2.1
)
(20
)%
General and administrative
expenses
20.3
19.7
0.6
3
%
47.2
41.9
5.3
13
%
Depreciation and amortization
expenses
109.7
102.1
7.6
7
%
217.8
204.2
13.6
7
%
Transaction, acquisition,
integration and other related expenses
0.1
1.4
(1.3
)
(93
)%
0.5
1.7
(1.2
)
(71
)%
Interest expense, net
13.9
21.1
(7.2
)
(34
)%
29.9
44.8
(14.9
)
(33
)%
(Gain) loss on marketable equity
investment
(50.4
)
8.5
(58.9
)
n/m
(65.1
)
(92.7
)
27.6
(30
)%
Loss on early extinguishment of
debt
—
—
—
n/m
3.4
—
3.4
n/m
Impairment losses
2.4
—
2.4
n/m
2.4
—
2.4
n/m
Foreign currency and derivative
losses, net
13.9
—
13.9
n/m
8.8
—
8.8
n/m
Other (income) expense
(0.1
)
—
(0.1
)
n/m
—
0.1
(0.1
)
n/m
Income tax benefit
(1.2
)
(1.4
)
0.2
(14
)%
(2.4
)
(1.6
)
(0.8
)
50
%
Net Operating Income
$
157.4
$
148.2
$
9.2
6
%
$
310.7
$
289.9
$
20.8
7
%
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,
2020
2019
$
%
2020
2020
2019
2019
2019
Net Operating Income
Revenue
$
502.3
$
476.5
$
25.8
5
%
$
256.4
$
245.9
$
253.9
$
250.9
$
251.5
Property operating expenses
191.6
186.6
5.0
3
%
99.0
92.6
93.8
103.0
103.3
Net Operating Income
(NOI)
$
310.7
$
289.9
$
20.8
7
%
$
157.4
$
153.3
$
160.1
$
147.9
$
148.2
NOI as a % of Revenue
61.9
%
60.8
%
61.4
%
62.3
%
63.1
%
58.9
%
58.9
%
Reconciliation of Net Income
(Loss) to Adjusted EBITDA:
Net income (loss)
$
59.7
$
80.9
$
(21.2
)
(26
)%
$
45.0
$
14.7
$
(52.1
)
$
12.6
$
(8.5
)
Interest expense, net
29.9
44.8
(14.9
)
(33
)%
13.9
16.0
17.6
19.6
21.1
Income tax benefit
(2.4
)
(1.6
)
(0.8
)
50
(1.2
)
(1.2
)
(0.1
)
(2.0
)
(1.4
)
Depreciation and amortization
expenses
217.8
204.2
13.6
7
%
109.7
108.1
108.1
105.4
102.1
Impairment losses
2.4
—
2.4
n/m
2.4
—
0.7
—
—
EBITDA (Nareit
definition)(a)
$
307.4
$
328.3
$
(20.9
)
(6
)%
$
169.8
$
137.6
$
74.2
$
135.6
$
113.3
Transaction, acquisition, integration and
other related expenses
0.5
1.7
(1.2
)
(71
)%
0.1
0.4
2.7
4.4
1.4
Legal claim costs
0.2
0.2
—
n/m
0.1
0.1
0.5
0.4
0.1
Stock-based compensation
expense
6.9
8.2
(1.3
)
(16
)%
3.4
3.5
4.3
4.2
3.7
Cash severance and management
transition costs
6.8
0.1
6.7
n/m
—
6.8
(0.7
)
—
—
Severance-related stock
compensation costs
0.1
—
0.1
n/m
—
0.1
—
—
—
Loss on early extinguishment of
debt
3.4
—
3.4
n/m
—
3.4
71.8
—
—
New accounting standards and
regulatory compliance and the related system implementation
costs
—
0.6
(0.6
)
n/m
—
—
—
0.2
0.3
(Gain) loss on marketable equity
investment
(65.1
)
(92.7
)
27.6
(30
)%
(50.4
)
(14.7
)
(27.2
)
(12.4
)
8.5
Foreign currency and derivative
losses (gains), net
8.8
—
8.8
n/m
13.9
(5.1
)
13.0
(5.5
)
—
Other expense (income)
—
0.1
(0.1
)
n/m
(0.1
)
0.1
(0.7
)
0.9
—
Adjusted EBITDA
$
269.0
$
246.5
$
22.5
9
%
$
136.8
$
132.2
$
137.9
$
127.8
$
127.3
Adjusted EBITDA as a % of
Revenue
53.6
%
51.7
%
53.4
%
53.8
%
54.3
%
50.9
%
50.6
%
(a)
We calculate Earnings Before Interest,
Taxes, Depreciation and Amortization for Real Estate (EBITDAre) as
GAAP Net income (loss) plus Interest expense, net, Income tax
benefit, Depreciation and amortization expenses and Impairment
losses. 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,
2020
2019
$
%
2020
2020
2019
2019
2019
Reconciliation of Net Income (Loss) to
FFO and Normalized FFO:
Net income (loss)
$
59.7
$
80.9
$
(21.2
)
(26)%
$
45.0
$
14.7
$
(52.1
)
$
12.6
$
(8.5
)
Real estate depreciation and
amortization
213.3
200.3
13.0
6%
107.5
105.8
105.6
102.6
100.2
Impairment losses and gain on
disposal of assets
2.3
—
2.3
n/m
2.4
(0.1
)
0.1
1.0
—
Funds from Operations ("FFO")
- Nareit defined
$
275.3
$
281.2
$
(5.9
)
(2)%
$
154.9
$
120.4
$
53.6
$
116.2
$
91.7
Loss on early extinguishment of
debt
3.4
—
3.4
n/m
—
3.4
71.8
—
—
(Gain) loss on marketable equity
investment
(65.1
)
(92.7
)
27.6
(30)%
(50.4
)
(14.7
)
(27.2
)
(12.4
)
8.5
Foreign currency and derivative
losses (gains), net
8.8
—
8.8
n/m
13.9
(5.1
)
13.0
(5.5
)
—
New accounting standards and regulatory
compliance and the related system implementation costs
—
0.6
(0.6
)
n/m
—
—
—
0.2
0.3
Amortization of tradenames
0.6
0.3
0.3
n/m
0.3
0.3
0.4
0.6
0.1
Transaction, acquisition,
integration and other related expenses
0.6
1.7
(1.1
)
(65)%
0.1
0.5
2.3
4.4
1.4
Cash severance and management
transition costs
6.8
0.1
6.7
n/m
—
6.8
(0.7
)
—
—
Severance-related stock
compensation costs
0.1
—
0.1
n/m
—
0.1
—
—
—
Legal claim costs
0.2
0.2
—
n/m
0.1
0.1
0.5
0.4
0.1
Normalized Funds from
Operations (Normalized FFO)
$
230.7
$
191.4
$
39.3
21%
$
118.9
$
111.8
$
113.7
$
103.9
$
102.1
Normalized FFO per diluted
common share
$
2.00
$
1.72
$
0.28
16%
$
1.03
$
0.97
$
0.99
$
0.91
$
0.90
Weighted average diluted
common shares outstanding
115.4
111.1
4.3
4%
115.7
115.1
114.4
113.5
113.1
Additional
Information:
Amortization of deferred financing costs
and bond premium / discount
3.6
2.4
1.2
50%
1.6
2.0
1.4
1.2
1.2
Stock-based compensation
expense
6.9
8.2
(1.3
)
(16)%
3.4
3.5
4.3
4.2
3.7
Non-real estate depreciation and
amortization
4.0
3.8
0.2
5%
2.0
2.0
2.1
2.0
1.9
Straight line rent
adjustments(a)
(0.4
)
(16.9
)
16.5
(98)%
(2.1
)
1.7
(3.8
)
(5.9
)
(6.8
)
Deferred revenue, primarily
installation revenue(b)
0.1
10.6
(10.5
)
n/m
2.3
(2.2
)
(2.3
)
(1.7
)
4.7
Leasing commissions
(5.6
)
(6.8
)
1.2
(18)%
(3.2
)
(2.4
)
(4.8
)
(2.8
)
(3.1
)
Recurring capital
expenditures
(9.9
)
(4.3
)
(5.6
)
n/m
(6.4
)
(3.5
)
(1.1
)
(4.5
)
(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 and Interest Summary
(Unaudited)
Market
Capitalization (as of June 30, 2020)
(dollars in millions)
Shares or Equivalents
Outstanding
Market Price as of June 30,
2020
Market Value Equivalents (in
millions)
Common shares
116,852,894
$
72.75
$
8,501.0
Net Debt
3,149.4
Total Enterprise Value
(TEV)
$
11,650.4
Reconciliation of Net Debt
(dollars in millions)
June 30, 2020
March 31, 2020
June 30, 2019
Long-term debt(a)
$
3,191.3
$
3,084.0
$
2,729.9
Finance lease liabilities
28.8
29.4
31.6
Less:
Cash and cash equivalents
(70.7
)
(57.3
)
(144.1
)
Net Debt
$
3,149.4
$
3,056.1
$
2,617.4
(a) Excludes adjustment for deferred
financing costs and unamortized bond discounts.
Interest
Summary
Three Months Ended
(dollars in millions)
June 30, 2020
March 31, 2020
June 30, 2019
% Change Yr/Yr
Interest expense and fees,
net
$
17.7
$
20.0
$
28.8
(39
)%
Amortization of deferred
financing costs and bond premium / discount
1.6
2.0
1.2
33
%
Capitalized interest
(5.4
)
(6.0
)
(8.9
)
(39
)%
Total interest expense,
net
$
13.9
$
16.0
$
21.1
(34
)%
CyrusOne Inc.
Debt Schedule and Debt
Covenants
(Unaudited)
Debt
Schedule (as of June 30, 2020)
(dollars in millions)
Long-term debt:
Amount
Interest Rate
Maturity Date
Revolving credit facility -
EUR(a)(b)
89.8
EURIBOR + 100 bps(c)
March 2025(d)
Revolving credit facility -
GBP(a)(e)
37.0
GBP LIBOR + 100 bps(f)
March 2025(d)
Revolving credit facility -
USD(a)
203.0
USD LIBOR + 100 bps(g)
March 2025(d)
Term loan(h)
1,100.0
USD LIBOR + 120 bps(i)
March 2025(j)
2.900% USD senior notes due
2024
600.0
2.900%
November 2024
1.450% EUR senior notes due
2027(k)
561.5
1.450%
January 2027
3.450% USD senior notes due
2029
600.0
3.450%
November 2029
Total long-term
debt(l)
$
3,191.3
2.05%(m)
Weighted average term of
debt:
5.9
years
(a)
Revolving credit facility includes 0.20%
facility fee on entire revolving credit facility commitment of $1.4
billion.
(b)
Amount outstanding is USD equivalent of
€80 million.
(c)
Interest rate as of June 30, 2020:
1.00%.
(d)
Assuming exercise of 12-month extension
option.
(e)
Amount outstanding is USD equivalent of
£30 million.
(f)
Interest rate as of June 30, 2020:
1.10%.
(g)
Interest rate as of June 30, 2020:
1.18%.
(h)
$500 million of $1,100 million
synthetically converted into €451 million pursuant to a USD-EUR
cross currency swap; $300 million swapped pursuant to USD floating
to fixed interest rate swap.
(i)
Interest rate as of June 30, 2020: 1.38%;
weighted average interest rate pursuant to swaps: 1.40%.
(j)
Assumes exercise of two 12-month extension
options on $400 million tranche.
(k)
Amount outstanding is USD equivalent of
€500 million.
(l)
Excludes adjustment for deferred financing
costs and unamortized bond discounts.
(m)
Weighted average interest rate calculated
using lower interest rate on swapped amount.
Debt Covenants -
Senior Notes (as of June 30, 2020)
Ratios
Requirement
June 30, 2020
Total Outstanding Indebtedness to
Total Assets
≤ 60%
39%
Secured Indebtedness to Total
Assets
≤ 40%
0%
Consolidated EBITDA to Interest
Expense
≥ 1.50x
7.09x
Total Unencumbered Assets to
Unsecured Indebtedness
≥ 150%
253%
CyrusOne Inc.
Colocation Square Footage
(CSF) and CSF Leased
(Unaudited)
As of June 30, 2020
As of March 31, 2020
As of June 30, 2019
Colocation Space
(CSF)(a)
CSF
Colocation Space
(CSF)(a)
CSF
Colocation Space
(CSF)(a)
CSF
Market
(000)
Leased(b)
(000)
Leased(b)
(000)
Leased(b)
Northern Virginia
1,166
92
%
1,113
96
%
1,113
91
%
Dallas
621
71
%
621
71
%
621
70
%
Phoenix
581
92
%
509
100
%
509
100
%
Cincinnati
402
73
%
402
75
%
402
79
%
San Antonio
367
96
%
300
100
%
300
100
%
Houston
308
62
%
308
63
%
308
68
%
New York Metro
245
76
%
245
73
%
228
77
%
Chicago
203
78
%
203
78
%
203
72
%
Austin
106
76
%
106
78
%
106
81
%
Raleigh-Durham
94
96
%
94
96
%
83
100
%
Total - Domestic
4,093
83
%
3,901
85
%
3,872
84
%
London
148
70
%
128
81
%
116
72
%
Frankfurt
144
99
%
144
99
%
125
99
%
Amsterdam
39
100
%
39
100
%
—
—
%
Singapore
3
20
%
3
20
%
3
22
%
Total - International
334
85
%
314
91
%
244
85
%
Total - Portfolio
4,427
83
%
4,215
86
%
4,116
84
%
Stabilized
Properties(c)
4,055
88
%
4,035
88
%
3,744
89
%
(a)
CSF represents the GSF 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. May not sum to total due to rounding.
(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.
2020 Guidance
Previous 2020 Guidance
Current 2020 Guidance
Category
Total Revenue
$1,010 - 1,045 million
$1,010 - 1,045 million
Lease and Other Revenues from
Customers
$865 - 890 million
$865 - 890 million
Metered Power Reimbursements
$145 - 155 million
$145 - 155 million
Adjusted EBITDA
$525 - 550 million
$525 - 550 million
Normalized FFO per diluted common
share
$3.75 - 3.90
$3.75 - 3.90
Capital Expenditures
$750 - 850 million
$850 - 950 million
Development(1)
$735 - 830 million
$835 - 930 million
Recurring
$15 - 20 million
$15 - 20 million
(1)
Development capital expenditures include
the acquisition of land for future development.
CyrusOne is updating guidance for full year 2020, increasing the
upper and lower ends of the guidance range for Capital Expenditures
and Capital Expenditures - Development and reaffirming its other
guidance ranges. 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. The COVID-19 pandemic continues to evolve
rapidly and the potential impact on our business remains uncertain
and unpredictable.
CyrusOne does not provide forward-looking guidance for GAAP
financial measures (other than Total 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, Impairment losses and loss on disposal of assets 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, 2020
(Unaudited)
Gross Square Feet
(GSF)(a)
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)
Powered Shell Available for
Future Development (GSF)(k) (000)
Available Critical Load
Capacity (MW)(l)
Dallas - Carrollton
Dallas
$
90,153
428
79
%
79
%
83
46
%
133
644
—
62
Northern Virginia - Sterling
V
Northern Virginia
66,202
383
99
%
99
%
11
100
%
145
539
64
66
Northern Virginia - Sterling
VI
Northern Virginia
50,843
272
100
%
100
%
35
—
%
—
307
—
57
Somerset I
New York Metro
34,156
108
81
%
81
%
27
99
%
89
224
138
16
Northern Virginia - Sterling
II
Northern Virginia
33,944
159
100
%
100
%
9
100
%
55
223
—
30
Chicago - Aurora I
Chicago
32,412
113
98
%
98
%
34
100
%
223
371
27
71
San Antonio III
San Antonio
32,330
132
100
%
100
%
9
100
%
43
184
—
24
Houston - Houston West I
Houston
27,731
112
75
%
75
%
11
100
%
37
161
3
28
Cincinnati - 7th Street***
Cincinnati
27,710
197
54
%
54
%
6
61
%
175
378
46
16
Phoenix - Chandler VI
Phoenix
27,236
148
100
%
100
%
6
100
%
32
187
279
24
Totowa - Madison**
New York Metro
26,515
51
87
%
87
%
22
89
%
59
133
—
6
Dallas - Lewisville*
Dallas
26,475
114
82
%
82
%
11
63
%
54
180
—
21
Cincinnati - North Cincinnati
Cincinnati
25,723
65
99
%
99
%
45
79
%
53
163
65
14
Frankfurt I
Frankfurt
24,038
53
97
%
97
%
8
91
%
57
118
—
18
Frankfurt II
Frankfurt
23,895
90
100
%
100
%
9
100
%
72
171
10
35
Phoenix - Chandler I
Phoenix
21,892
74
100
%
100
%
35
12
%
39
147
31
16
Phoenix - Chandler II
Phoenix
21,877
74
100
%
100
%
6
53
%
26
105
—
12
Houston - Houston West II
Houston
21,444
80
73
%
73
%
4
97
%
55
139
11
12
Austin III
Austin
20,779
62
69
%
69
%
15
81
%
21
98
67
9
Phoenix - Chandler III
Phoenix
20,669
68
100
%
100
%
2
—
%
30
101
—
14
Raleigh-Durham I
Raleigh-Durham
19,737
94
89
%
96
%
16
95
%
82
192
235
17
Northern Virginia - Sterling
III
Northern Virginia
19,222
79
100
%
100
%
7
100
%
34
120
—
15
San Antonio I
San Antonio
19,140
44
99
%
99
%
6
83
%
46
96
11
12
Wappingers Falls I**
New York Metro
18,329
37
63
%
63
%
20
87
%
15
72
—
3
Northern Virginia - Sterling
I
Northern Virginia
17,712
78
100
%
100
%
6
69
%
49
132
—
12
Northern Virginia - Sterling
IV
Northern Virginia
17,012
81
100
%
100
%
7
100
%
34
122
—
15
San Antonio II
San Antonio
15,485
64
100
%
100
%
11
100
%
41
117
—
12
Phoenix - Chandler V
Phoenix
15,381
72
100
%
100
%
1
95
%
16
89
13
12
Austin II
Austin
14,867
44
86
%
86
%
2
100
%
22
68
—
5
London I*
London
12,698
30
100
%
100
%
12
56
%
58
100
9
12
Phoenix - Chandler IV
Phoenix
12,551
73
100
%
100
%
3
100
%
27
103
—
12
San Antonio IV
San Antonio
11,584
60
100
%
100
%
12
100
%
27
99
—
12
Cincinnati - Hamilton*
Cincinnati
11,218
47
73
%
73
%
1
100
%
35
83
—
10
Houston - Galleria
Houston
11,019
63
39
%
39
%
23
24
%
25
112
—
14
London II*
London
10,862
64
100
%
100
%
10
100
%
93
166
4
21
Florence
Cincinnati
9,638
53
99
%
99
%
47
87
%
40
140
—
9
Houston - Houston West III
Houston
7,030
53
42
%
44
%
10
15
%
32
95
209
6
London - Great Bridgewater**
London
6,428
10
96
%
96
%
—
—
%
1
11
—
1
Stamford - Riverbend**
New York Metro
5,812
20
23
%
23
%
—
—
%
8
28
—
2
Chicago - Aurora II (DH #1)
Chicago
5,686
77
51
%
51
%
45
1
%
14
136
272
16
Norwalk I**
New York Metro
5,284
13
100
%
100
%
4
65
%
41
58
87
2
Cincinnati - Mason
Cincinnati
4,184
34
100
%
100
%
26
98
%
17
78
—
4
Chicago - Lombard
Chicago
2,479
14
64
%
64
%
4
45
%
12
30
29
3
Stamford - Omega**
New York Metro
1,354
—
—
%
—
%
19
72
%
4
22
—
—
Totowa - Commerce**
New York Metro
658
—
—
%
—
%
20
44
%
6
26
—
—
Cincinnati - Blue Ash*
Cincinnati
632
6
36
%
36
%
7
100
%
2
15
—
1
Singapore - Inter Business
Park**
Singapore
359
3
20
%
20
%
—
—
%
—
3
—
1
London III*
London
—
20
—
%
100
%
2
—
%
45
67
1
6
Amsterdam I
Amsterdam
—
39
100
%
100
%
15
100
%
40
94
207
4
Stabilized Properties -
Total
$
932,387
4,055
88
%
88
%
725
64
%
2,263
7,043
1,818
785
CyrusOne Inc.
Data Center Portfolio
As of June 30, 2020
(Unaudited)
Gross Square Feet
(GSF)(a)
Powered Shell Available for
Future
Development (GSF)(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
$
932,387
4,055
88
%
88
%
725
64
%
2,263
7,043
1,818
785
Pre-Stabilized Properties(b)
Northern Virginia - Sterling
VIII
Northern Virginia
8,642
61
37
%
37
%
4
—
%
25
90
—
6
Dallas - Allen (DH #1)
Dallas
1,756
79
12
%
12
%
—
—
%
58
137
204
6
Northern Virginia - Sterling
IX
Northern Virginia
305
53
10
%
10
%
1
—
%
66
120
187
6
Somerset I (DH #14)
New York Metro
296
16
71
%
79
%
—
—
%
—
16
—
2
London I*(DH #1)
London
—
8
—
%
—
%
—
—
%
—
8
—
3
London II*(DH #3)
London
—
17
—
%
—
%
—
—
%
—
17
—
7
San Antonio V
San Antonio
—
67
79
%
79
%
7
100
%
21
94
9
9
Phoenix - Chandler V (DH#2)
Phoenix
—
71
35
%
35
%
1
100
%
8
81
—
6
All Properties - Total
$
943,386
4,427
83
%
83
%
738
64
%
2,441
7,605
2,218
830
*
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, 2020
multiplied by 12. For the month of June 2020, customer
reimbursements were $154.4 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, 2018 through June 30, 2020, customer
reimbursements under leases with separately metered power
constituted between 13.5% and 19.4% of annualized rent. After
giving effect to abatements, free rent and other straight-line
adjustments, our annualized effective rent as of June 30, 2020 was
$938.9 million. Our annualized effective rent was lower than our
annualized rent as of June 30, 2020 because our negative
straight-line and other adjustments and amortization of deferred
revenue exceeded our positive straight-line adjustments due to
factors such as the timing of contractual rent escalations and
customer payments for services.
(d)
CSF represents the GSF 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, 2020
divided by total CSF. Leases signed but that have not commenced
billing as of June 30, 2020 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 GSF 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, 2020 divided by total Office & Other
space. Leases signed but not commenced as of June 30, 2020 are not
included.
(i)
Represents infrastructure support space,
including mechanical, telecommunications and utility rooms, as well
as building common areas.
(j)
Represents the GSF 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 GSF, 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.
GSF Under Development
As of June 30, 2020
(Dollars in millions)
(Unaudited)
GSF Under
Development(a)
Under Development
Costs(b)
Metropolitan
Estimated Completion
Colocation Space (CSF)
Office & Other
Supporting
Infrastructure
Powered Shell(c)
Critical Load MW
Actual to
Estimated Costs to
Facilities
Area
Date
(000)
(000)
(000)
(000)
Total (000)
Capacity(d)
Date(e)
Completion(f)
Total
Somerset I
New York
3Q'20
45
—
2
—
47
6.0
$
4
$
19-27
$
23-31
Frankfurt III (DH #1)
Frankfurt
3Q'20
101
9
109
16
235
35.0
123
56-75
179-198
Northern Virginia - Sterling
VII
Northern Virginia
4Q'20
—
—
—
167
167
—
41
50-59
91-100
Northern Virginia - Sterling
VIII
Northern Virginia
4Q'20
—
—
—
—
—
9.0
4
35-40
39-44
Council Bluffs I
Iowa
4Q'20
42
14
18
42
115
5.0
12
48-54
60-66
Dublin I
Dublin
4Q'20
39
10
33
113
195
6.0
39
28-35
67-74
Frankfurt III (DH #2 and DH
#3)
Frankfurt
4Q'20
23
—
—
—
23
9.0
—
22-26
22-26
San Antonio V
San Antonio
4Q'20
67
—
18
—
85
6.0
—
35-39
35-39
London III
London
1Q'21
19
—
—
—
19
6.0
—
28-33
28-33
Total
336
33
180
337
886
82.0
$
223
$
321-388
$
544-611
(a)
Represents GSF 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
1.23. Dublin and Frankfurt development costs are EUR- denominated
and shown as USD-equivalent using exchange rate of 1.12 as of June
30, 2020.
(c)
Represents GSF under construction that,
upon completion, will be powered shell available for future
development into operating GSF.
(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, 2020. 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 GSF under development.
There may be an increase in costs if customers require greater
power density.
Capital
Expenditures - Investment in Real Estate(a)
Three Months Ended
Six Months Ended
(dollars in millions)
June 30, 2020
June 30, 2020
Capital expenditures - investment
in real estate
$255.1
$448.1
(a) Excludes recurring capital
expenditures.
CyrusOne Inc.
Land Available for Future
Development (Acres)
As of June 30, 2020
(Unaudited)
Market
As of June 30, 2020
Amsterdam
8
Atlanta
44
Austin
22
Chicago
23
Cincinnati
98
Council Bluffs, Iowa
10
Dallas
57
Dublin
15
Frankfurt
2
Houston
20
Northern Virginia
24
Phoenix
96
Quincy, Washington
48
San Antonio
12
Santa Clara
23
Total Available(a)
501
Book Value of Total Available
$217.2 million
(a)
Does not sum to total due to rounding.
CyrusOne Inc.
Leasing Statistics - Lease
Signings
As of June 30, 2020
(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'20
396
150,000
21,956
$3,070
84
Prior 4Q Avg.
465
149,750
21,251
$2,751
81
1Q'20
460
289,000
43,586
$4,994
98
4Q'19
450
28,000
4,703
$1,063
55
3Q'19(f)
451
236,000
30,769
$3,856
104
2Q'19
500
46,000
5,946
$1,090
67
(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 GSF 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, and subject to full build
out of projects subject to additional conditions. 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 1Q'20, $0.2 million in 4Q'19 and
2Q'20, and $0.1 million in 2Q'19 and 3Q'19.
(e)
Calculated on a CSF-weighted basis.
(f)
Leasing statistics updated from prior
period reporting to remove the prior inclusion of the paid
reservation that was exercised in 2Q'20 and included in the 2Q'20
leasing results (30,000 CSF, 4.5 MW, and approximately $0.5 million
in monthly recurring rent).
CyrusOne Inc.
New MRR Signed - Existing vs.
New Customers
As of June 30, 2020
(Dollars in thousands)
(Unaudited)
New MRR(a) Signed
($000)
3Q'18 4Q'18 1Q'19 2Q'19
3Q'19(b) 4Q'19 1Q'20 2Q'20 Existing
Customers
$2,072
$1,226
$2,102
$974
$2,849
$843
$4,756
$2,872
New Customers
$146
$452
$165
$116
$1,007
$220
$238
$198
Total
$2,218
$1,678
$2,267
$1,090
$3,856
$1,063
$4,994
$3,070
% from Existing Customers
93%
73%
93%
89%
74%
79%
95%
94%
(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 3Q'18 and 1Q'20, $0.2 million in
1Q'19, 4Q'19 and 2Q'20, and $0.1 million in 4Q'18, 2Q'19 and
3Q'19.
(b)
Leasing statistics updated from
prior period reporting to remove the prior inclusion of the paid
reservation that was exercised in 2Q'20 and included in the 2Q'20
leasing results (30,000 CSF, 4.5 MW, and approximately $0.5 million
in monthly recurring rent).
CyrusOne Inc.
Customer Sector
Diversification(a)
As of June 30, 2020
(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
$
190,542
20.2
%
94.9
2
Information Technology
11
65,382
6.9
%
25.5
3
Information Technology
5
57,177
6.1
%
50.3
4
Information Technology
7
37,157
3.9
%
46.4
5
Information Technology
7
31,446
3.3
%
36.7
6
Information Technology
5
28,804
3.1
%
32.2
7
Financial Services
1
19,574
2.1
%
129.0
8
Information Technology
5
16,896
1.8
%
38.9
9
Healthcare
2
15,827
1.7
%
90.0
10
Research and Consulting
Services
3
15,338
1.6
%
17.9
11
Industrials
5
11,063
1.2
%
10.2
12
Financial Services
4
10,574
1.1
%
93.0
13
Telecommunication Services
2
9,923
1.1
%
15.6
14
Telecommunication Services
2
9,879
1.0
%
45.3
15
Information Technology
1
9,619
1.0
%
44.6
16
Telecommunication Services
8
9,559
1.0
%
9.3
17
Consumer Staples
3
9,212
1.0
%
8.0
18
Telecommunication Services
1
7,766
0.8
%
88.3
19
Information Technology
3
7,165
0.8
%
47.0
20
Information Technology
1
6,756
0.7
%
11.0
$
569,658
60.4
%
60.9
(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, 2020,
multiplied by 12. For the month of June 2020, customer
reimbursements were $154.4 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, 2018 through June 30, 2020, customer
reimbursements under leases with separately metered power
constituted between 13.5% and 19.4% of annualized rent. After
giving effect to abatements, free rent and other straight-line
adjustments, our annualized effective rent as of June 30, 2020 was
$938.9 million. Our annualized effective rent was lower than our
annualized rent as of June 30, 2020 because our negative
straight-line and other adjustments and amortization of deferred
revenue exceeded our positive straight-line adjustments due to
factors such as the timing of contractual rent escalations and
customer payments for services.
(c)
Represents the customer’s total annualized
rent divided by the total annualized rent in the portfolio as of
June 30, 2020, which was approximately $943.4 million.
(d)
Weighted average based on customer’s
percentage of total annualized rent expiring and is as of June 30,
2020, 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, 2020
(Unaudited)
GSF Under Lease(a)
Number of Customers(b)
Percentage of All
Customers
Total Leased GSF(c)
(000)
Percentage of Portfolio Leased
GSF
Annualized Rent(d)
(000)
Percentage of Annualized
Rent
0-999
626
66%
131
2%
$
78,716
8%
1000-2499
116
12%
181
3%
44,378
5%
2500-4999
73
8%
258
5%
50,069
5%
5000-9999
48
5%
337
6%
54,323
6%
10000+
81
9%
4,825
84%
715,899
76%
Total
944
100%
5,732
100%
$
943,386
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, 2020.
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 GSF 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, 2020,
multiplied by 12. For the month of June 2020, customer
reimbursements were $154.4 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, 2018 through June 30, 2020, customer
reimbursements under leases with separately metered power
constituted between 13.5% and 19.4% of annualized rent. After
giving effect to abatements, free rent and other straight-line
adjustments, our annualized effective rent as of June 30, 2020 was
$938.9 million. Our annualized effective rent was lower than our
annualized rent as of June 30, 2020 because our negative
straight-line and other adjustments and amortization of deferred
revenue exceeded our positive straight-line adjustments due to
factors such as the timing of contractual rent escalations and
customer payments for services.
CyrusOne Inc.
Lease Expirations
As of June 30, 2020
(Unaudited)
Year(a)
Number of Leases
Expiring(b)
Total Operating GSF Expiring
(000)
Percentage of Total
GSF
Annualized Rent(c)
(000)
Percentage of Annualized
Rent
Annualized Rent at
Expiration(d) (000)
Percentage of Annualized Rent
at Expiration
Available
1,873
25%
Month-to-Month
1,203
118
1%
$
28,755
3%
$
29,784
3%
2020
1,271
324
4%
66,959
7%
66,984
7%
2021
3,078
800
10%
168,801
18%
171,977
17%
2022
1,602
698
9%
119,970
13%
125,813
12%
2023
986
919
12%
137,327
14%
146,605
14%
2024
248
521
7%
97,736
10%
106,077
10%
2025
110
276
4%
37,420
4%
46,233
5%
2026
47
623
8%
93,980
10%
100,568
10%
2027
34
504
7%
85,383
9%
95,813
9%
2028
17
278
4%
35,129
4%
39,797
4%
2029
7
82
1%
6,601
1%
8,753
1%
2030 - Thereafter
23
589
8%
65,324
7%
84,276
8%
Total
8,626
7,605
100%
$
943,386
100%
$
1,022,680
100%
(a)
Leases that were auto-renewed
prior to June 30, 2020 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, 2020,
multiplied by 12. For the month of June 2020, customer
reimbursements were $154.4 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, 2018 through June 30, 2020, customer
reimbursements under leases with separately metered power
constituted between 13.5% and 19.4% of annualized rent. After
giving effect to abatements, free rent and other straight-line
adjustments, our annualized effective rent as of June 30, 2020 was
$938.9 million. Our annualized effective rent was lower than our
annualized rent as of June 30, 2020 because our negative
straight-line and other adjustments and amortization of deferred
revenue exceeded our positive straight-line adjustments due to
factors such as the timing of contractual rent escalations and
customer payments for services.
(d)
Represents the final monthly
contractual rent under existing customer leases that had commenced
as of June 30, 2020, multiplied by 12.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200729005989/en/
Investor Relations Michael Schafer Vice President,
Capital Markets & Investor Relations 972-350-0060
investorrelations@cyrusone.com
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