1Q’20 Year-over-Year Revenue Growth of 9%
Signed $60 Million in Annualized GAAP Revenue
and 44 Megawatts
CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT,
today announced first quarter 2020 earnings.
Highlights
Category
1Q’20
vs. 1Q’19
Revenue
$245.9 million
9%
Net income / (loss)
$14.7 million
(84)%
Adjusted EBITDA
$132.2 million
11%
Normalized FFO
$111.8 million
25%
Net income / (loss) per diluted share
$0.13
(84)%
Normalized FFO per diluted share
$0.97
18%
- Leased 44 megawatts (“MW”) and 289,000 colocation square feet
(“CSF”) in the first quarter, totaling $60 million in annualized
GAAP revenue, the second-highest quarterly total in the company’s
history
– Leased 31.5 MW totaling $38 million in
annualized GAAP revenue across European locations, with 9 MW
totaling $12.5 million in annualized GAAP revenue expected to
commence this year, reflecting continued strong demand growth in
these markets from U.S. hyperscale companies
- Backlog of $88 million in annualized GAAP revenue as of the end
of the first quarter, the highest quarter-end backlog in the
company’s history, representing approximately $610 million in total
contract value1
- As previously announced, amended our senior unsecured credit
agreement, extending the maturity dates and decreasing the interest
rate margins applicable on the revolving credit facility and term
loans
- As previously announced, issued €500 million of 1.45% Senior
Notes due 2027, with the proceeds used to repay floating rate Euro
denominated obligations and fund continued development in
Europe
- As previously announced, entered into a forward sale agreement
through the at-the-market (“ATM”) equity program with respect to
approximately 2.0 million shares of common stock, which will result
in estimated net proceeds of approximately $123 million upon
settlement by March 2021
– Combined with the forward sale agreement
entered into in the fourth quarter of 2019, which will result in
estimated net proceeds of approximately $99 million upon settlement
by November 2020, the Company has $222 million in available forward
equity
“First and foremost, our thoughts and well wishes go out to the
people most directly impacted by COVID-19, particularly those who
have lost loved ones, and we want to thank our first responders and
healthcare professionals that are on the front line,” said Tesh
Durvasula, interim president and chief executive officer of
CyrusOne. “We had very strong financial and operational performance
in the quarter, with high growth across key metrics and the second
highest leasing total in the company’s history, including a
significant contribution from Europe as demand for larger
deployments there continues to accelerate. The nearly $90 million
revenue backlog enhances our growth profile, and the company is
very well positioned with a strong balance sheet, substantial
liquidity including available forward equity, and capacity
throughout our markets.”
First Quarter 2020 Financial Results
Revenue was $245.9 million for the first quarter, compared to
$225.0 million for the same period in 2019, an increase of 9%. The
increase in revenue was driven primarily by a 5% increase in
occupied CSF and additional interconnection services.
Net income was $14.7 million for the first quarter, compared to
net income of $89.4 million in the same period in 2019. Net income
for the first quarter included a $14.7 million gain on the
Company’s equity investment in GDS, a leading data center provider
in China, compared to a $101.2 million gain in the first quarter of
2019. Additionally in the first quarter, the Company recognized a
$4.5 million gain associated with a change in fair value on the
undesignated portion of its cross-currency swaps, partially offset
by a $3.4 million loss on the early extinguishment of debt
associated with the amendment of our senior unsecured credit
agreement. Net income per diluted common share2 was $0.13 in the
first quarter of 2020, compared to net income per diluted common
share of $0.82 in the same period in 2019.
Net operating income (“NOI”)3 was $153.3 million for the first
quarter, compared to $141.7 million in the same period in 2019, an
increase of 8%. Adjusted EBITDA4 was $132.2 million for the first
quarter, compared to $119.2 million in the same period in 2019, an
increase of 11%.
Normalized Funds From Operations (“Normalized FFO”)5 was $111.8
million for the first quarter, compared to $89.3 million in the
same period in 2019, an increase of 25%. Normalized FFO per diluted
common share was $0.97 in the first quarter of 2020, compared to
$0.82 in the same period in 2019, an increase of 18%.
Leasing Activity
CyrusOne leased approximately 44 MW of power and 289,000 CSF in
the first quarter, representing approximately $5.0 million in
monthly recurring rent, inclusive of the monthly impact of
installation charges. The leasing for the quarter represents
approximately $59.9 million in annualized GAAP revenue6, excluding
estimates for pass-through power. The weighted average lease term
of the new leases, based on square footage, is 98 months (8.2
years), and the weighted average remaining lease term of CyrusOne’s
portfolio is 53 months (taking into consideration the impact of the
backlog). Recurring rent churn percentage7 for the first quarter
was 1.0%, compared to 2.1% for the same period in 2019.
Portfolio Development and Percentage CSF Leased
In the first quarter, the Company completed construction on
50,000 CSF and 6 MW of power capacity in Amsterdam and
Raleigh-Durham. Percentage CSF leased8 as of the end of the first
quarter was 88% for stabilized properties9 and 86% overall. In
addition, the Company has development projects underway in
Frankfurt, Dublin, London, Northern Virginia, San Antonio, Phoenix,
the New York Metro area, and Council Bluffs (IA) that are expected
to add approximately 438,000 CSF and 88 MW of power capacity.
Balance Sheet and Liquidity
As of March 31, 2020, the Company had gross asset value10
totaling approximately $7.7 billion, an increase of approximately
10% over gross asset value as of March 31, 2019. CyrusOne had $3.08
billion of long-term debt11, $57 million of cash and cash
equivalents, and $1.16 billion available under its unsecured
revolving credit facility as of March 31, 2020. Net debt11 was
$3.06 billion as of March 31, 2020, representing approximately 30%
of the Company's total enterprise value as of March 31, 2020 of
$10.2 billion, or 5.4x 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 5.2x12. Available liquidity13 was $1.43 billion as of March 31,
2020.
As previously announced, the Company amended its senior
unsecured credit agreement, extending the maturity dates and
decreasing the interest rate margins applicable on the revolving
credit facility and term loans. The amended agreement consists of a
$1.4 billion revolving credit facility, which includes a $750
million multicurrency borrowing sublimit, and term loan commitments
totaling $1.1 billion. The revolving credit facility has been
decreased by $300 million, resulting in savings on the annual
facility fee and reflecting the Company’s enhanced access to
capital as an investment-grade issuer. The revolving credit
facility matures in March 2024 and includes a 12-month extension
option which, if exercised by the Company, would extend the final
maturity to March 2025. The term loan commitments consist of a $400
million term loan maturing in March 2023 and a $700 million term
loan maturing in March 2025. The term loan maturing in March 2023
includes two 12-month extension options which, if fully exercised
by the Company, would extend the final maturity to March 2025. The
credit agreement also contains an accordion that allows the Company
to obtain up to $1.5 billion in additional revolving or term loan
commitments.
The all-in drawn margin applicable to the revolving credit
facility based on the Company’s current leverage level has
decreased by 25 basis points compared to the margin on the previous
revolving credit facility. The current margin is 100 basis points
over the applicable index for floating rate advances, and the
annual facility fee is 20 basis points. The margin on the term loan
maturing in March 2023 based on the Company’s current leverage
level is LIBOR plus 120 basis points, a decrease of 15 basis points
compared to the margin on the previously outstanding term loan
maturing in March 2023. The margin on the term loan maturing in
March 2025 based on the Company’s current leverage level is also
LIBOR plus 120 basis points, a decrease of 45 basis points compared
to the margin on the previously outstanding term loan maturing in
March 2025.
As previously announced, the Company issued €500 million of
1.45% Senior Notes due 2027, with the proceeds used to repay
floating rate Euro denominated obligations and fund continued
development in Europe.
As previously announced, the Company entered into a forward sale
agreement through the ATM equity program with respect to
approximately 2.0 million shares, which will result in estimated
net proceeds of approximately $123 million upon settlement by March
2021. Combined with the forward sale agreement entered into in the
fourth quarter of 2019, which will result in estimated net proceeds
of approximately $99 million upon settlement by November 2020, the
Company has $222 million in available forward equity (no portion of
these forward sale agreements has been settled as of April 29,
2020). As of March 31, 2020, there was approximately $165 million
in remaining availability under the current ATM equity program.
Dividend
On February 20, 2020, the Company announced a dividend of $0.50
per share of common stock for the first quarter of 2020. The
dividend was paid on April 9, 2020, to stockholders of record at
the close of business on March 27, 2020.
Additionally, today the Company is announcing a dividend of
$0.50 per share of common stock for the second quarter of 2020. The
dividend will be paid on July 10, 2020, to stockholders of record
at the close of business on June 26, 2020.
Guidance
CyrusOne is updating guidance for full year 2020, tightening the
guidance range and decreasing the midpoint for Total Revenue and
Lease and Other Revenues from Customers, and widening the guidance
range and decreasing the midpoint for Adjusted EBITDA. 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 is evolving rapidly and the
potential impact on our business is 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
Revised 2020 Guidance
Total Revenue
$1,015 - 1,055 million
$1,010 - 1,045 million
Lease and Other Revenues from
Customers
$870 - 900 million
$865 - 890 million
Metered Power Reimbursements
$145 - 155 million
$145 - 155 million
Adjusted EBITDA
$535 - 555 million
$525 - 550 million
Normalized FFO per diluted common
share
$3.75 - 3.90
$3.75 - 3.90
Capital Expenditures
$750 - 850 million
$750 - 850 million
Development(1)
$735 - 830 million
$735 - 830 million
Recurring
$15 - 20 million
$15 - 20 million
(1)Development capital expenditures
include the acquisition of land for future development.
Upcoming Conferences and Events (All Virtual)
- MoffettNathanson Media & Communications Summit on May
11-12
- J.P. Morgan Global Technology, Media and Communications
Conference on May 12-14
- RBC Capital Markets Global Data Center / Connectivity
Conference on May 27
- Cowen and Company Technology, Media & Telecom Conference on
May 26-29
- NAREIT’s REITweek Investor Conference on June 2-4
Conference Call Details
CyrusOne will host a conference call on April 30, 2020, at 11:00
AM Eastern Time (10:00 AM Central Time) to discuss its results for
the first 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 April 30, 2020, through May 14,
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 10141841.
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.
1Inclusive of 4.5 MW and approximately $5.5 million in
annualized GAAP revenue associated with a paid reservation signed
in 3Q’19 expected to be exercised in the next six months.
2Net 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 115.1 million for the first
quarter of 2020 and 108.8 million for the first quarter of
2019.
3We 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, 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 on marketable
equity investment, Loss on early extinguishment of debt, Foreign
currency and derivative gains, net, Other 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 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.
4Adjusted 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; 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 (gains) losses, net; and Other expense (income). 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.
5We 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 loss 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 plus Loss on early
extinguishment of debt; (Gain) loss on marketable equity
investment; Foreign currency and derivative 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.
6Annualized 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.
7Recurring 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.
8Percentage 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.
9Stabilized properties include data halls that have been in
service for at least 24 months or are at least 85% leased.
10Gross asset value is defined as total assets plus accumulated
depreciation.
11Long-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.
12The estimated impact of the adoption of ASC 842 on Adjusted
EBITDA for the last quarter annualized is $16.1 million.
13Liquidity 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
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
2850 N. Harwood Street, Ste. 2200
Tesh Durvasula, Interim 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, Managing Director, Europe
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
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
March 31,
December 31,
March 31,
Growth %
2020
2019
2019
Yr/Yr
Revenue
$
245.9
$
253.9
$
225.0
9
%
Net operating income
153.3
160.1
141.7
8
%
Net income (loss)
14.7
(52.1
)
89.4
(84
)%
Funds from Operations ("FFO") - Nareit
defined
120.4
53.6
189.5
(36
)%
Normalized Funds from Operations
("Normalized FFO")
111.8
113.7
89.3
25
%
Weighted average number of common shares
outstanding - diluted for Normalized FFO
115.1
114.4
108.8
6
%
Income (loss) per share - basic
$
0.13
$
(0.46
)
$
0.82
(84
)%
Income (loss) per share - diluted
$
0.13
$
(0.46
)
$
0.82
(84
)%
Normalized FFO per diluted common
share
$
0.97
$
0.99
$
0.82
18
%
Adjusted EBITDA
$
132.2
$
137.9
$
119.2
11
%
Adjusted EBITDA as a % of Revenue
53.8
%
54.3
%
53.0
%
0.8 pts
As of
March 31,
December 31,
March 31,
Growth %
2020
2019
2019
Yr/Yr
Balance Sheet Data
Gross investment in real estate
$
6,260.9
$
6,089.5
$
5,508.8
14
%
Accumulated depreciation
(1,469.5
)
(1,379.2
)
(1,122.5
)
31
%
Total investment in real estate, net
4,791.4
4,710.3
4,386.3
9
%
Cash and cash equivalents
57.3
76.4
126.0
(55
)%
Market value of common equity
7,102.1
7,511.9
5,785.0
23
%
Long-term debt
3,084.0
2,915.0
2,915.8
6
%
Net debt
3,056.1
2,870.4
2,823.2
8
%
Total enterprise value
10,158.2
10,382.3
8,608.2
18
%
Net debt to LQA Adjusted EBITDA(a)
5.4x
5.0x
5.2x
0.2x
Dividend Activity
Dividends per share
$
0.50
$
0.50
$
0.46
9
%
Portfolio Statistics
Data centers
48
47
48
-
Stabilized CSF (000)
4,035
3,937
3,721
8
%
Stabilized CSF % leased
88
%
88
%
90
%
(2) pts
Total CSF (000)
4,215
4,165
4,061
4
%
Total CSF % leased
86
%
85
%
86
%
0 pts
Total GSF (000)
7,243
7,135
7,004
3
%
(a)
March 31, 2020 and December 31, 2019
periods adjusted to reflect the pro forma impact of settlement of
the forward sale agreements. 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
Ended March 31,
Change
2020
2019
$
%
Revenue(a)
$
245.9
$
225.0
$
20.9
9
%
Operating expenses:
Property operating expenses
92.6
83.3
9.3
11
%
Sales and marketing
4.7
5.3
(0.6
)
(11
)%
General and administrative
26.9
22.2
4.7
21
%
Depreciation and amortization
108.1
102.1
6.0
6
%
Transaction, acquisition, integration and
other related expenses
0.4
0.3
0.1
33
%
Total operating expenses
232.7
213.2
19.5
9
%
Operating income
13.2
11.8
1.4
12
%
Interest expense, net
(16.0
)
(23.7
)
7.7
(32
)%
Gain on marketable equity investment
14.7
101.2
(86.5
)
(85
)%
Loss on early extinguishment of debt
(3.4
)
—
(3.4
)
n/m
Foreign currency and derivative gains,
net
5.1
—
5.1
n/m
Other expense
(0.1
)
(0.1
)
—
n/m
Net income before income taxes
13.5
89.2
(75.7
)
(85
)%
Income tax benefit
1.2
0.2
1.0
n/m
Net income
$
14.7
$
89.4
$
(74.7
)
(84
)%
Income per share - basic
$
0.13
$
0.82
$
(0.69
)
(84
)%
Income per share - diluted
$
0.13
$
0.82
$
(0.69
)
(84
)%
(a)
Revenue includes metered power
reimbursements of $34.8 million and $28.5 million for the three
months ended March 31, 2020 and 2019, respectively.
CyrusOne Inc.
Condensed Consolidated Balance
Sheets
(Dollars in millions)
(Unaudited)
March 31,
December 31,
Change
2020
2019
$
%
Assets
Investment in real estate:
Land
$
172.2
$
147.6
$
24.6
17
%
Buildings and improvements
1,786.3
1,761.4
24.9
1
%
Equipment
3,106.4
3,028.2
78.2
3
%
Gross operating real estate
5,064.9
4,937.2
127.7
3
%
Less accumulated depreciation
(1,469.5
)
(1,379.2
)
(90.3
)
7
%
Net operating real estate
3,595.4
3,558.0
37.4
1
%
Construction in progress, including land
under development
990.6
946.3
44.3
5
%
Land held for future development
205.4
206.0
(0.6
)
—
%
Total investment in real estate, net
4,791.4
4,710.3
81.1
2
%
Cash and cash equivalents
57.3
76.4
(19.1
)
(25
)%
Rent and other receivables, net
305.3
291.9
13.4
5
%
Restricted cash
1.3
1.3
—
n/m
Operating lease right-of-use assets,
net
208.6
161.9
46.7
29
%
Equity investments
153.1
135.1
18.0
13
%
Goodwill
455.1
455.1
—
n/m
Intangible assets, net
184.5
196.1
(11.6
)
(6
)%
Other assets
121.9
113.9
8.0
7
%
Total assets
$
6,278.5
$
6,142.0
$
136.5
2
%
Liabilities and equity
Debt
$
3,047.0
$
2,886.6
$
160.4
6
%
Finance lease liabilities
29.4
31.8
(2.4
)
(8
)%
Operating lease liabilities
243.0
195.8
47.2
24
%
Construction costs payable
183.4
176.3
7.1
4
%
Accounts payable and accrued expenses
121.0
122.7
(1.7
)
(1
)%
Dividends payable
58.7
58.6
0.1
—
%
Deferred revenue and prepaid rents
167.3
163.7
3.6
2
%
Deferred tax liability
57.0
60.5
(3.5
)
(6
)%
Other liabilities
7.9
11.4
(3.5
)
(31
)%
Total liabilities
3,914.7
3,707.4
207.3
6
%
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 115,014,251 and 114,808,898 shares issued and
outstanding at March 31, 2020 and December 31, 2019,
respectively
1.2
1.1
0.1
9.1
%
Additional paid in capital
3,199.9
3,202.0
(2.1
)
—
%
Accumulated deficit
(811.0
)
(767.3
)
(43.7
)
6
%
Accumulated other comprehensive loss
(26.3
)
(1.2
)
(25.1
)
n/m
Total stockholders’ equity
2,363.8
2,434.6
(70.8
)
(3
)%
Total liabilities and equity
$
6,278.5
$
6,142.0
$
136.5
2
%
CyrusOne Inc.
Condensed Consolidated
Statements of Operations
(Dollars in millions, except
per share amounts)
(Unaudited)
For the three months ended:
March 31,
December 31,
September 30,
June 30,
March 31,
2020
2019
2019
2019
2019
Revenue(a)
$
245.9
$
253.9
$
250.9
$
251.5
$
225.0
Operating expenses:
Property operating expenses
92.6
93.8
103.0
103.3
83.3
Sales and marketing
4.7
4.5
5.1
5.3
5.3
General and administrative
26.9
21.8
19.8
19.7
22.2
Depreciation and amortization
108.1
108.1
105.4
102.1
102.1
Transaction, acquisition, integration and
other related expenses
0.4
2.7
4.4
1.4
0.3
Impairment losses
—
0.7
—
—
—
Total operating expenses
232.7
231.6
237.7
231.8
213.2
Operating income
13.2
22.3
13.2
19.7
11.8
Interest expense, net
(16.0
)
(17.6
)
(19.6
)
(21.1
)
(23.7
)
Gain (loss) on marketable equity
investment
14.7
27.2
12.4
(8.5
)
101.2
Loss on early extinguishment of debt
(3.4
)
(71.8
)
—
—
—
Foreign currency and derivative gains
(losses), net
5.1
(13.0
)
5.5
—
—
Other (expense) income
(0.1
)
0.7
(0.9
)
—
(0.1
)
Net income (loss) before income
taxes
13.5
(52.2
)
10.6
(9.9
)
89.2
Income tax benefit
1.2
0.1
2.0
1.4
0.2
Net income (loss)
$
14.7
$
(52.1
)
$
12.6
$
(8.5
)
$
89.4
Income (loss) per share - basic
$
0.13
$
(0.46
)
$
0.11
$
(0.08
)
$
0.82
Income (loss) per share -
diluted
$
0.13
$
(0.46
)
$
0.11
$
(0.08
)
$
0.82
(a)
Revenue includes metered power
reimbursements of $34.8 million, $37.5 million, $41.1 million,
$31.7 million and $28.5 million for the three months ended March
31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and
March 31, 2019, respectively.
CyrusOne Inc.
Condensed Consolidated Balance
Sheets
(Dollars in millions)
(Unaudited)
March 31,
December 31,
September 30,
June 30,
March 31,
2020
2019
2019
2019
2019
Assets
Investment in real estate:
Land
$
172.2
$
147.6
$
147.3
$
148.0
$
124.9
Buildings and improvements
1,786.3
1,761.4
1,732.0
1,689.7
1,649.2
Equipment
3,106.4
3,028.2
2,950.3
2,869.7
2,799.6
Gross operating real estate
5,064.9
4,937.2
4,829.6
4,707.4
4,573.7
Less accumulated depreciation
(1,469.5
)
(1,379.2
)
(1,292.7
)
(1,207.4
)
(1,122.5
)
Net operating real estate
3,595.4
3,558.0
3,536.9
3,500.0
3,451.2
Construction in progress, including land
under development
990.6
946.3
836.9
799.2
734.7
Land held for future development
205.4
206.0
204.3
200.4
200.4
Total investment in real estate, net
4,791.4
4,710.3
4,578.1
4,499.6
4,386.3
Cash and cash equivalents
57.3
76.4
51.7
144.1
126.0
Rent and other receivables, net
305.3
291.9
279.3
268.4
248.7
Restricted cash
1.3
1.3
1.3
1.3
1.3
Operating lease right-of-use assets,
net
208.6
161.9
90.7
78.5
83.8
Equity investments
153.1
135.1
104.3
91.9
299.3
Goodwill
455.1
455.1
455.1
455.1
455.1
Intangible assets, net
184.5
196.1
203.7
215.3
226.1
Other assets
121.9
113.9
128.7
115.5
114.8
Total assets
$
6,278.5
$
6,142.0
$
5,892.9
$
5,869.7
$
5,941.4
Liabilities and equity
Debt
$
3,047.0
$
2,886.6
$
2,776.1
$
2,713.8
$
2,898.6
Finance lease liabilities
29.4
31.8
30.7
31.6
33.4
Operating lease liabilities
243.0
195.8
124.3
114.1
119.6
Construction costs payable
183.4
176.3
131.2
149.5
155.5
Accounts payable and accrued expenses
121.0
122.7
132.4
112.8
81.6
Dividends payable
58.7
58.6
57.7
53.0
51.5
Deferred revenue and prepaid rents
167.3
163.7
164.0
166.8
155.9
Deferred tax liability
57.0
60.5
59.6
65.5
67.2
Other liabilities
7.9
11.4
—
—
—
Total liabilities
3,914.7
3,707.4
3,476.0
3,407.1
3,563.3
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 115,014,251 and 114,808,898 shares issued and
outstanding at March 31, 2020 and December 31, 2019,
respectively
1.2
1.1
1.1
1.1
1.1
Additional paid in capital
3,199.9
3,202.0
3,094.2
3,089.5
2,938.2
Accumulated deficit
(811.0
)
(767.3
)
(657.4
)
(613.0
)
(552.2
)
Accumulated other comprehensive loss
(26.3
)
(1.2
)
(21.0
)
(15.0
)
(9.0
)
Total stockholders' equity
2,363.8
2,434.6
2,416.9
2,462.6
2,378.1
Total liabilities and equity
$
6,278.5
$
6,142.0
$
5,892.9
$
5,869.7
$
5,941.4
CyrusOne Inc.
Condensed Consolidated
Statements of Cash Flow
(Dollars in millions)
(Unaudited)
Three Months Ended March 31,
2020
Three Months Ended March 31,
2019
Cash flows from operating activities:
Net income
$
14.7
$
89.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
108.1
102.1
Provision for bad debt expense
(0.1
)
—
Unrealized gain on marketable equity
investment
(14.7
)
(101.2
)
Foreign currency and derivative gains,
net
(5.1
)
—
Proceeds from swap terminations
2.9
—
Loss on early extinguishment of debt
3.4
—
Interest expense amortization, net
2.0
1.2
Stock-based compensation expense
3.7
4.5
Deferred income tax benefit
(2.0
)
(0.8
)
Operating lease cost
6.2
5.0
Other income (expense)
0.2
(0.5
)
Change in operating assets and
liabilities:
Rent and other receivables, net and other
assets
(29.4
)
(18.0
)
Accounts payable and accrued expenses
(1.2
)
(39.8
)
Deferred revenue and prepaid rents
3.2
7.1
Operating lease liabilities
(5.6
)
(5.1
)
Net cash provided by operating
activities
86.3
43.9
Cash flows from investing activities:
Investment in real estate
(196.5
)
(301.9
)
Equity investments
(3.3
)
—
Net cash used in investing
activities
(199.8
)
(301.9
)
Cash flows from financing activities:
Issuance of common stock, net
0.6
105.0
Dividends paid
(58.4
)
(50.4
)
Payment of deferred financing costs
(13.6
)
—
Proceeds from revolving credit
facility
244.4
275.7
Repayments of revolving credit
facility
(623.1
)
—
Proceeds from Euro bond
550.6
—
Proceeds from unsecured term loan
1,100.0
—
Repayments of unsecured term loan
(1,100.0
)
—
Payments on finance lease liabilities
(0.7
)
(0.6
)
Tax payment upon exercise of equity
awards
(6.3
)
(8.7
)
Net cash provided by financing
activities
93.5
321.0
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
0.9
(0.1
)
Net decrease in cash, cash equivalents and
restricted cash
(19.1
)
62.9
Cash, cash equivalents and restricted cash
at beginning of period
77.7
64.4
Cash, cash equivalents and restricted
cash at end of period
$
58.6
$
127.3
Supplemental disclosure of cash flow
information:
Cash paid for interest, including amounts
capitalized of $6.0 million and $9.3 million in 2020 and 2019,
respectively
$
8.3
$
46.7
Non-cash investing and financing
activities:
Construction costs payable
183.4
155.5
Dividends payable
58.7
51.5
CyrusOne Inc.
Reconciliation of Net Income
(Loss) to Net Operating Income
(Dollars in millions)
(Unaudited)
Three Months Ended
March 31,
Change
2020
2019
$
%
Net income
$
14.7
$
89.4
$
(74.7
)
(84
)%
Sales and marketing expenses
4.7
5.3
(0.6
)
(11
)%
General and administrative expenses
26.9
22.2
4.7
21
%
Depreciation and amortization expenses
108.1
102.1
6.0
6
%
Transaction, acquisition, integration and
other related expenses
0.4
0.3
0.1
33
%
Interest expense, net
16.0
23.7
(7.7
)
(32
)%
Gain on marketable equity investment
(14.7
)
(101.2
)
86.5
(85
)%
Loss on early extinguishment of debt
3.4
—
3.4
n/m
Foreign currency and derivative gains,
net
(5.1
)
—
(5.1
)
n/m
Other expense
0.1
0.1
—
n/m
Income tax benefit
(1.2
)
(0.2
)
(1.0
)
n/m
Net Operating Income
$
153.3
$
141.7
$
11.6
8
%
CyrusOne Inc.
Net Operating Income and
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(Dollars in millions)
(Unaudited)
Three Months Ended
Three Months Ended
March 31,
Change
March 31,
December 31,
September 30,
June 30,
March 31,
2020
2019
$
%
2020
2019
2019
2019
2019
Net Operating Income
Revenue
$
245.9
$
225.0
$
20.9
9%
$
245.9
$
253.9
$
250.9
$
251.5
$
225.0
Property operating expenses
92.6
83.3
9.3
11%
92.6
93.8
103.0
103.3
83.3
Net Operating Income (NOI)
$
153.3
$
141.7
$
11.6
8%
$
153.3
$
160.1
$
147.9
$
148.2
$
141.7
NOI as a % of Revenue
62.3
%
63.0
%
62.3
%
63.1
%
58.9
%
58.9
%
63.0
%
Reconciliation of Net Income (Loss) to
Adjusted
EBITDA:
Net income (loss)
$
14.7
$
89.4
$
(74.7
)
(84)%
$
14.7
$
(52.1
)
$
12.6
$
(8.5
)
$
89.4
Interest expense, net
16.0
23.7
(7.7
)
(32)%
16.0
17.6
19.6
21.1
23.7
Income tax benefit
(1.2
)
(0.2
)
(1.0
)
n/m
(1.2
)
(0.1
)
(2.0
)
(1.4
)
(0.2
)
Depreciation and amortization expenses
108.1
102.1
6.0
6%
108.1
108.1
105.4
102.1
102.1
Impairment losses
—
—
—
n/m
—
0.7
—
—
—
EBITDA (Nareit definition)(a)
$
137.6
$
215.0
$
(77.4
)
(36)%
$
137.6
$
74.2
$
135.6
$
113.3
$
215.0
Transaction, acquisition, integration and
other related expenses
0.4
0.3
0.1
33%
0.4
2.7
4.4
1.4
0.3
Legal claim costs
0.1
0.1
—
n/m
0.1
0.5
0.4
0.1
0.1
Stock-based compensation expense
3.5
4.5
(1.0
)
(22)%
3.5
4.3
4.2
3.7
4.5
Cash severance and management transition
costs
6.8
0.1
6.7
n/m
6.8
(0.7
)
—
—
0.1
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
—
0.3
(0.3
)
n/m
—
—
0.2
0.3
0.3
(Gain) loss on marketable equity
investment
(14.7
)
(101.2
)
86.5
(85)%
(14.7
)
(27.2
)
(12.4
)
8.5
(101.2
)
Foreign currency and derivative (gains)
losses, net
(5.1
)
—
(5.1
)
n/m
(5.1
)
13.0
(5.5
)
—
—
Other expense (income)
0.1
0.1
—
n/m
0.1
(0.7
)
0.9
—
0.1
Adjusted EBITDA
$
132.2
$
119.2
$
13.0
11%
$
132.2
$
137.9
$
127.8
$
127.3
$
119.2
Adjusted EBITDA as a % of Revenue
53.8
%
53.0
%
53.8
%
54.3
%
50.9
%
50.6
%
53.0
%
(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 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)
Three Months Ended
Three Months Ended
March 31,
Change
March 31,
December 31,
September 30,
June 30,
March 31,
2020
2019
$
%
2020
2019
2019
2019
2019
Reconciliation of Net Income (Loss) to
FFO and Normalized FFO:
Net income (loss)
$
14.7
$
89.4
$
(74.7
)
(84
)%
$
14.7
$
(52.1
)
$
12.6
$
(8.5
)
$
89.4
Real estate depreciation and
amortization
105.8
100.1
5.7
6
%
105.8
105.6
102.6
100.2
100.1
Impairment losses and gain on disposal of
assets
(0.1
)
—
(0.1
)
n/m
(0.1
)
0.1
1.0
—
—
Funds from Operations ("FFO") - Nareit
defined
$
120.4
$
189.5
$
(69.1
)
(36
)%
$
120.4
$
53.6
$
116.2
$
91.7
$
189.5
Loss on early extinguishment of debt
3.4
—
3.4
n/m
3.4
71.8
—
—
—
(Gain) loss on marketable equity
investment
(14.7
)
(101.2
)
86.5
(85
)%
(14.7
)
(27.2
)
(12.4
)
8.5
(101.2
)
Foreign currency and derivative (gains)
losses, net
(5.1
)
—
(5.1
)
n/m
(5.1
)
13.0
(5.5
)
—
—
New accounting standards and regulatory
compliance and the related system implementation costs
—
0.3
(0.3
)
n/m
—
—
0.2
0.3
0.3
Amortization of tradenames
0.3
0.2
0.1
50
%
0.3
0.4
0.6
0.1
0.2
Transaction, acquisition, integration and
other related expenses
0.5
0.3
0.2
67
%
0.5
2.3
4.4
1.4
0.3
Cash severance and management transition
costs
6.8
0.1
6.7
n/m
6.8
(0.7
)
—
—
0.1
Severance-related stock compensation
costs
0.1
—
0.1
n/m
0.1
—
—
—
—
Legal claim costs
0.1
0.1
—
n/m
0.1
0.5
0.4
0.1
0.1
Normalized Funds from Operations
(Normalized FFO)
$
111.8
$
89.3
$
22.5
25
%
$
111.8
$
113.7
$
103.9
$
102.1
$
89.3
Normalized FFO per diluted common
share
$
0.97
$
0.82
$
0.15
18
%
$
0.97
$
0.99
$
0.91
$
0.90
$
0.82
Weighted average diluted common shares
outstanding
115.1
108.8
6.3
6
%
115.1
114.4
113.5
113.1
108.8
Additional Information:
Amortization of deferred financing costs
and bond premium / discount
2.0
1.2
0.8
67
%
2.0
1.4
1.2
1.2
1.2
Stock-based compensation expense
3.5
4.5
(1.0
)
(22
)%
3.5
4.3
4.2
3.7
4.5
Non-real estate depreciation and
amortization
2.0
1.9
0.1
5
%
2.0
2.1
2.0
1.9
1.9
Straight line rent adjustments(a)
1.7
(10.1
)
11.8
n/m
1.7
(3.8
)
(5.9
)
(6.8
)
(10.1
)
Deferred revenue, primarily installation
revenue(b)
(2.2
)
5.9
(8.1
)
n/m
(2.2
)
(2.3
)
(1.7
)
4.7
5.9
Leasing commissions
(2.4
)
(3.7
)
1.3
(35
)%
(2.4
)
(4.8
)
(2.8
)
(3.1
)
(3.7
)
Recurring capital expenditures
(3.5
)
(2.7
)
(0.8
)
30
%
(3.5
)
(1.1
)
(4.5
)
(1.6
)
(2.7
)
(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 March 31, 2020)
(dollars in millions)
Shares or
Equivalents
Outstanding
Market Price
as of
March 31, 2020
Market Value
Equivalents
(in millions)
Common shares
115,014,251
$
61.75
$
7,102.1
Net Debt
3,056.1
Total Enterprise Value (TEV)
$
10,158.2
Reconciliation of Net Debt
March 31,
December 31,
March 31,
(dollars in millions)
2020
2019
2019
Long-term debt(a)
$
3,084.0
$
2,915.0
$
2,915.8
Finance lease liabilities
29.4
31.8
33.4
Less:
Cash and cash equivalents
(57.3
)
(76.4
)
(126.0
)
Net Debt
$
3,056.1
$
2,870.4
$
2,823.2
Interest
Summary
Three Months Ended
March 31,
December 31,
March 31,
% Change
(dollars in millions)
2020
2019
2019
Yr/Yr
Interest expense and fees
$
20.0
$
22.9
$
31.8
(37
)%
Amortization of deferred financing costs
and bond premium / discount
2.0
1.4
1.2
67
%
Capitalized interest
(6.0
)
(6.7
)
(9.3
)
(35
)%
Total interest expense
$
16.0
$
17.6
$
23.7
(32
)%
CyrusOne Inc.
Debt Schedule and Debt
Covenants
(Unaudited)
Debt
Schedule (as of March 31, 2020)
(dollars in millions)
Long-term debt:
Amount
Interest Rate
Maturity Date
Revolving credit facility - GBP(a)(b)
31.0
GBP LIBOR + 100 bps(d)
March 2025(c)
Revolving credit facility - USD(a)
203.0
USD LIBOR + 100 bps(e)
March 2025(c)
Term loan(f)
1,100.0
USD LIBOR + 120 bps(g)
March 2025(h)
2.900% USD senior notes due 2024
600.0
2.900%
November 2024
1.450% EUR senior notes due 2027(i)
550.0
1.450%
January 2027
3.450% USD senior notes due 2029
600.0
3.450%
November 2029
Total long-term debt(j)
$
3,084.0
2.22%(k)
Weighted average term of debt:
6.2
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 £25 million.
(c)
Assuming exercise of 12-month
extension option.
(d)
Interest rate as of March 31,
2020: 1.25%.
(e)
Interest rate as of March 31,
2020: 2.00%.
(f)
$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.
(g)
Interest rate as of March 31,
2020: 2.20%; weighted average interest rate pursuant to swaps:
1.42%.
(h)
Assumes exercise of two 12-month
extension options on $400 million tranche.
(i)
Amount outstanding is USD
equivalent of €500 million.
(j)
Excludes adjustment for deferred
financing costs.
(k)
Weighted average interest rate
calculated using lower interest rate on swapped amount.
Debt
Covenants - Senior Notes (as of March 31, 2020)
Ratios
Requirement
March 31, 2020
Total Outstanding Indebtedness to Total
Assets
≤ 60%
39%
Secured Indebtedness to Total Assets
≤ 40%
0%
Consolidated EBITDA to Interest
Expense
≥ 1.50x
6.01x
Total Unencumbered Assets to Unsecured
Indebtedness
≥ 150%
252%
CyrusOne Inc.
Colocation Square Footage
(CSF) and CSF Leased
(Unaudited)
As of March 31, 2020
As of December 31,
2019
As of March 31, 2019
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
96
%
1,113
92
%
1,113
91
%
Dallas
621
71
%
621
70
%
621
70
%
Phoenix
509
100
%
509
100
%
509
100
%
Cincinnati
402
75
%
402
78
%
402
85
%
Houston
308
63
%
308
64
%
308
70
%
San Antonio
300
100
%
300
100
%
300
100
%
New York Metro
245
73
%
245
74
%
228
77
%
Chicago
203
78
%
203
77
%
207
71
%
Austin
106
78
%
106
79
%
106
80
%
Raleigh-Durham
94
96
%
83
95
%
83
99
%
Total - Domestic
3,901
85
%
3,890
84
%
3,876
85
%
Frankfurt
144
99
%
144
99
%
98
99
%
London
128
81
%
128
81
%
84
100
%
Amsterdam
39
100
%
—
—
%
—
—
%
Singapore
3
20
%
3
20
%
3
22
%
Total - International
314
91
%
275
90
%
185
98
%
Total - Portfolio
4,215
86
%
4,165
85
%
4,061
86
%
Stabilized Properties(c)
4,035
88
%
3,937
88
%
3,721
90
%
(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
Category
Previous 2020 Guidance
Revised 2020 Guidance
Total Revenue
$1,015 - 1,055 million
$1,010 - 1,045 million
Lease and Other Revenues from
Customers
$870 - 900 million
$865 - 890 million
Metered Power Reimbursements
$145 - 155 million
$145 - 155 million
Adjusted EBITDA
$535 - 555 million
$525 - 550 million
Normalized FFO per diluted common
share
$3.75 - 3.90
$3.75 - 3.90
Capital Expenditures
$750 - 850 million
$750 - 850 million
Development(1)
$735 - 830 million
$735 - 830 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, tightening the
guidance range and decreasing the midpoint for Total Revenue and
Lease and Other Revenues from Customers, and widening the guidance
range and decreasing the midpoint for Adjusted EBITDA. 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 is evolving rapidly and the
potential impact on our business is 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 gain 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 March 31, 2020
(Unaudited)
Gross Square Feet
(GSF)(a)
Powered Shell Available for
Future Development (GSF)(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
$
88,489
428
79
%
79
%
83
46
%
133
644
—
62
Northern Virginia - Sterling V
Northern Virginia
66,823
383
99
%
99
%
11
100
%
145
539
64
66
Northern Virginia - Sterling VI
Northern Virginia
49,283
272
91
%
100
%
35
—
%
—
307
—
57
Northern Virginia - Sterling II
Northern Virginia
33,735
159
100
%
100
%
9
100
%
55
223
—
30
Somerset I
New York Metro
32,749
108
81
%
81
%
27
99
%
89
224
138
16
San Antonio III
San Antonio
31,851
132
100
%
100
%
9
100
%
43
184
—
24
Chicago - Aurora I
Chicago
31,693
113
98
%
98
%
34
100
%
223
371
27
71
Cincinnati - 7th Street***
Cincinnati
28,074
197
59
%
59
%
6
61
%
175
378
46
16
Houston - Houston West I
Houston
28,014
112
75
%
75
%
11
100
%
37
161
3
28
Dallas - Lewisville*
Dallas
27,590
114
81
%
81
%
11
63
%
54
180
—
21
Totowa - Madison**
New York Metro
26,385
51
87
%
87
%
22
89
%
59
133
—
6
Cincinnati - North Cincinnati
Cincinnati
25,645
65
99
%
99
%
45
79
%
53
163
65
14
Phoenix - Chandler VI
Phoenix
25,128
148
100
%
100
%
6
100
%
32
187
279
24
Frankfurt I
Frankfurt
22,414
53
97
%
97
%
8
91
%
57
118
—
18
Austin III
Austin
20,851
62
69
%
73
%
15
81
%
21
98
67
9
Houston - Houston West II
Houston
20,796
80
74
%
74
%
4
97
%
55
139
11
12
Phoenix - Chandler II
Phoenix
20,205
74
100
%
100
%
6
53
%
26
105
—
12
Phoenix - Chandler I
Phoenix
19,844
74
100
%
100
%
35
12
%
39
147
31
16
Phoenix - Chandler III
Phoenix
19,546
68
100
%
100
%
2
—
%
30
101
—
14
Northern Virginia - Sterling III
Northern Virginia
19,250
79
100
%
100
%
7
100
%
34
120
—
15
Frankfurt II
Frankfurt
19,101
90
100
%
100
%
9
100
%
72
171
10
35
Wappingers Falls I**
New York Metro
18,835
37
63
%
63
%
20
87
%
15
72
—
3
Northern Virginia - Sterling I
Northern Virginia
18,590
78
100
%
100
%
6
69
%
49
132
—
12
Raleigh-Durham I
Raleigh-Durham
18,376
94
89
%
96
%
16
95
%
82
192
235
17
San Antonio I
San Antonio
18,093
44
99
%
99
%
6
83
%
46
96
11
12
Northern Virginia - Sterling IV
Northern Virginia
16,992
81
100
%
100
%
7
100
%
34
122
—
15
San Antonio II
San Antonio
14,868
64
100
%
100
%
11
100
%
41
117
—
12
Austin II
Austin
14,426
44
85
%
85
%
2
100
%
22
68
—
5
Phoenix - Chandler V
Phoenix
14,397
72
100
%
100
%
1
95
%
16
89
13
12
Florence
Cincinnati
13,545
53
99
%
99
%
47
87
%
40
140
—
9
London I*
London
11,938
30
100
%
100
%
12
56
%
58
100
9
12
Houston - Galleria
Houston
11,918
63
45
%
45
%
23
27
%
25
112
—
14
Phoenix - Chandler IV
Phoenix
11,734
73
100
%
100
%
3
100
%
27
103
—
12
Cincinnati - Hamilton*
Cincinnati
11,107
47
73
%
73
%
1
100
%
35
83
—
10
San Antonio IV
San Antonio
10,981
60
100
%
100
%
12
100
%
27
99
—
12
London II*
London
9,829
64
100
%
100
%
10
100
%
93
166
4
21
Houston - Houston West III
Houston
7,116
53
41
%
41
%
10
98
%
32
95
209
6
London - Great Bridgewater**
London
6,244
10
96
%
96
%
—
—
%
1
11
—
1
Stamford - Riverbend**
New York Metro
6,008
20
23
%
23
%
—
—
%
8
28
—
2
Chicago - Aurora II (DH #1)
Chicago
5,308
77
51
%
51
%
45
1
%
14
136
272
16
Cincinnati - Mason
Cincinnati
5,142
34
100
%
100
%
26
98
%
17
78
—
4
Norwalk I**
New York Metro
4,850
13
100
%
100
%
4
65
%
41
58
87
2
Chicago - Lombard
Chicago
2,461
14
64
%
64
%
4
45
%
12
30
29
3
Stamford - Omega**
New York Metro
1,258
—
—
%
—
%
19
80
%
4
22
—
—
Totowa - Commerce**
New York Metro
659
—
—
%
—
%
20
44
%
6
26
—
—
Cincinnati - Blue Ash*
Cincinnati
621
6
36
%
36
%
7
100
%
2
15
—
1
Singapore - Inter Business Park**
Singapore
354
3
20
%
20
%
—
—
%
—
3
—
1
Amsterdam I
Amsterdam
—
39
100
%
100
%
15
100
%
40
94
207
4
Stabilized Properties - Total
$
913,115
4,035
88
%
88
%
723
66
%
2,218
6,976
1,818
779
CyrusOne Inc.
Data Center Portfolio
As of March 31, 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
$
913,115
4,035
88
%
88
%
723
66
%
2,218
6,976
1,818
779
Pre-Stabilized Properties(b)
Northern Virginia - Sterling VIII
Northern Virginia
8,718
61
37
%
37
%
4
—
%
25
90
—
6
Dallas - Allen (DH #1)
Dallas
1,343
79
11
%
11
%
—
—
%
58
137
204
6
Somerset I (DH #14)
New York Metro
—
16
—
%
40
%
—
—
%
—
16
—
2
London II* (DH #3)
London
—
17
—
%
—
%
—
—
%
—
17
—
7
London I* (DH #1)
London
—
8
—
%
—
%
—
—
%
—
8
—
3
All Properties - Total
$
923,176
4,215
85
%
86
%
727
65
%
2,301
7,243
2,021
803
*
Indicates properties in which we hold a
leasehold interest in the building shell and land. All data center
infrastructure has been constructed by us and is owned by us.
**
Indicates properties in which we hold a
leasehold interest in the building shell, land, and all data center
infrastructure.
***
The information provided for the
Cincinnati - 7th Street property includes data for two facilities,
one of which we lease and one of which we own.
(a)
Represents the total square feet of a
building under lease or available for lease based on engineers'
drawings and estimates but does not include space held for
development or space used by CyrusOne.
(b)
Stabilized properties include data halls
that have been in service for at least 24 months or are at least
85% leased. Pre-stabilized properties include data halls that have
been in service for less than 24 months and are less than 85%
leased.
(c)
Represents monthly contractual rent
(defined as cash rent including customer reimbursements for metered
power) under existing customer leases as of March 31, 2020
multiplied by 12. For the month of March 2020, customer
reimbursements were $137.2 million annualized and consisted of
reimbursements by customers across all facilities with separately
metered power. Customer reimbursements under leases with separately
metered power vary from month-to-month based on factors such as our
customers' utilization of power and the suppliers' pricing of
power. From April 1, 2018 through March 31, 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 March 31, 2020 was
$912.5 million. Our annualized effective rent was lower than our
annualized rent as of March 31, 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 March 31, 2020
divided by total CSF. Leases signed but that have not commenced
billing as of March 31, 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 March 31, 2020 divided by total Office & Other
space. Leases signed but not commenced as of March 31, 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 March 31, 2020
(Dollars in millions)
(Unaudited)
GSF 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 IX(g)
Northern Virginia
2Q'20
53
1
66
187
307
6.0
9
$21-24
$30-33
Phoenix V
Phoenix
2Q'20
71
1
8
—
81
6.0
2
25-35
27-37
London III
London
2Q'20
20
2
45
20
87
6.0
27
12-16
39-43
Somerset I
New York
3Q'20
45
—
2
—
47
6.0
—
23-31
23-31
Frankfurt III
Frankfurt
3Q'20
101
9
109
39
258
35.0
61
119-138
180-199
Northern Virginia - Sterling VII
Northern Virginia
3Q'20
—
—
—
167
167
—
34
57-66
91-100
San Antonio V
San Antonio
3Q'20
67
7
21
105
199
9.0
56
30-39
86-95
Council Bluffs I
Council Bluffs, IA
3Q'20
42
14
18
42
115
5.0
5
55-61
60-66
Northern Virginia - Sterling VIII
Northern Virginia
4Q'20
—
—
—
—
—
9.0
15
24-29
39-44
Dublin I
Dublin
4Q'20
39
10
33
113
195
6.0
26
40-47
66-73
Total
438
44
302
672
1,456
88.0
$
235
$406-486
$641-721
(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
1.24. Frankfurt and Dublin development costs are EUR-denominated
and shown as USD-equivalent using exchange rate of 1.10 as of March
31, 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 March 31, 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.
(g)
Northern Virginia - Sterling IX shell
construction was completed in 1Q'20, and construction of the CSF,
MW, and supporting infrastructure commenced in 1Q'20, with costs in
the table reflecting the construction that began in 1Q'20.
Capital Expenditures - Investment in
Real Estate
Three Months Ended
March 31
(dollars in millions)
2020
Capital expenditures - investment in real
estate
$193.0
CyrusOne Inc.
Land Available for Future
Development (Acres)
As of March 31, 2020
(Unaudited)
As of
Market
March 31, 2020
Amsterdam
8
Atlanta
44
Austin
22
Chicago
23
Cincinnati
98
Council Bluffs, Iowa
10
Dallas
57
Dublin
15
Houston
20
Northern Virginia
24
Phoenix
96
Quincy, Washington
48
San Antonio
12
Santa Clara
23
Total Available(a)
499
Book Value of Total Available
$
205.4
million
(a) Does not sum to total due to rounding.
CyrusOne Inc.
Leasing Statistics - Lease
Signings
As of March 31, 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)
1Q'20
460
289,000
43,586
$4,994
98
Prior 4Q Avg.
456
108,250
15,369
$2,186
69
4Q'19
450
28,000
4,703
$1,063
55
3Q'19(f)
452
266,000
35,269
$4,324
99
2Q'19
500
46,000
5,946
$1,090
67
1Q'19
422
93,000
15,557
$2,267
56
(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 1Q'19 and
4Q'19, and $0.1 million in 2Q'19 and 3Q'19.
(e)
Calculated on a CSF-weighted basis.
(f)
Includes 30,000 CSF, 4.5 MW, and
approximately $0.5 million in monthly recurring rent associated
with a paid reservation expected to be exercised in the next six
months.
CyrusOne Inc.
New MRR Signed - Existing vs.
New Customers
As of March 31, 2020
(Dollars in thousands)
(Unaudited)
2Q'18
3Q'18
4Q'18
1Q'19
2Q'19
3Q'19(b)
4Q'19
1Q'20
Existing Customers
$4,429
$2,072
$1,226
$2,102
$974
$2,849
$843
$4,756
New Customers
$1,024
$146
$452
$165
$116
$1,475
$220
$238
Total
$5,453
$2,218
$1,678
$2,267
$1,090
$4,324
$1,063
$4,994
% from Existing Customers
81%
93%
73%
93%
89%
66%
79%
95%
(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, 3Q'18, and 1Q'20, $0.2 million in 1Q'19 and
4Q'19, and $0.1 million in 4Q'18, 2Q'19 and 3Q'19. (b) Includes
approximately $0.5 million in monthly recurring rent associated
with a paid reservation expected to be exercised within the next 6
months.
CyrusOne Inc.
Customer Sector
Diversification(a)
As of March 31, 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
$
184,457
20.0
%
97.9
2
Information Technology
11
61,765
6.7
%
28.2
3
Information Technology
5
54,404
5.9
%
52.6
4
Information Technology
7
35,552
3.9
%
47.8
5
Information Technology
7
34,431
3.7
%
38.7
6
Information Technology
5
22,585
2.4
%
33.9
7
Financial Services
1
19,434
2.1
%
132.0
8
Healthcare
2
15,641
1.7
%
93.0
9
Information Technology
4
15,456
1.7
%
41.8
10
Research and Consulting Services
3
15,357
1.7
%
21.3
11
Industrials
5
11,126
1.2
%
7.7
12
Financial Services
2
9,788
1.1
%
48.3
13
Telecommunication Services
2
9,706
1.1
%
18.5
14
Telecommunication Services
8
9,617
1.0
%
11.1
15
Information Technology
4
9,614
1.0
%
95.8
16
Information Technology
1
9,610
1.0
%
47.6
17
Consumer Staples
3
9,260
1.0
%
11.0
18
Telecommunication Services
1
7,686
0.8
%
91.3
19
Information Technology
3
7,156
0.8
%
49.4
20
Information Technology
1
6,922
0.8
%
13.9
$
549,565
59.5
%
63.5
(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 March 31, 2020,
multiplied by 12. For the month of March 2020, customer
reimbursements were $137.2 million annualized and consisted of
reimbursements by customers across all facilities with separately
metered power. Customer reimbursements under leases with separately
metered power vary from month-to-month based on factors such as our
customers' utilization of power and the suppliers' pricing of
power. From April 1, 2018 through March 31, 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 March 31, 2020 was
$912.5 million. Our annualized effective rent was lower than our
annualized rent as of March 31, 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
March 31, 2020, which was approximately $923.2 million.
(d)
Weighted average based on
customer’s percentage of total annualized rent expiring and is as
of March 31, 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 March 31, 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
647
67
%
135
2
%
$
78,073
8
%
1000-2499
116
12
%
180
3
%
44,661
5
%
2500-4999
73
8
%
257
5
%
48,966
5
%
5000-9999
46
5
%
325
6
%
53,453
6
%
10000+
81
8
%
4,720
84
%
698,023
76
%
Total
963
100
%
5,616
100
%
$
923,176
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 March
31, 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 March 31, 2020,
multiplied by 12. For the month of March 2020, customer
reimbursements were $137.2 million annualized and consisted of
reimbursements by customers across all facilities with separately
metered power. Customer reimbursements under leases with separately
metered power vary from month-to-month based on factors such as our
customers' utilization of power and the suppliers' pricing of
power. From April 1, 2018 through March 31, 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 March 31, 2020 was
$912.5 million. Our annualized effective rent was lower than our
annualized rent as of March 31, 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 March 31, 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
1,627
22
%
Month-to-Month
1,050
55
1
%
$
21,221
2
%
$
21,667
2
%
2020
2,005
541
8
%
102,256
11
%
102,748
10
%
2021
2,697
786
11
%
163,131
18
%
165,717
17
%
2022
1,574
638
9
%
110,432
12
%
116,837
12
%
2023
716
830
11
%
124,375
13
%
136,215
14
%
2024
244
540
7
%
92,109
10
%
102,564
10
%
2025
97
245
3
%
34,358
4
%
41,501
4
%
2026
46
622
9
%
91,997
10
%
98,813
10
%
2027
30
489
7
%
81,786
9
%
90,544
9
%
2028
17
278
4
%
32,748
3
%
38,269
4
%
2029
7
82
1
%
6,615
1
%
8,778
1
%
2030 - Thereafter
19
511
7
%
62,147
7
%
71,845
7
%
Total
8,502
7,243
100
%
$
923,176
100
%
$
995,497
100
%
(a)
Leases that were auto-renewed
prior to March 31, 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 March 31, 2020,
multiplied by 12. For the month of March 2020, customer
reimbursements were $137.2 million annualized and consisted of
reimbursements by customers across all facilities with separately
metered power. Customer reimbursements under leases with separately
metered power vary from month-to-month based on factors such as our
customers' utilization of power and the suppliers' pricing of
power. From April 1, 2018 through March 31, 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 March 31, 2020 was
$912.5 million. Our annualized effective rent was lower than our
annualized rent as of March 31, 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 March 31, 2020, multiplied by 12.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200429005913/en/
Investor Relations Michael Schafer Vice President, Capital
Markets & Investor Relations 972-350-0060
investorrelations@cyrusone.com
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