EX-99.1 2 exhibit991-earningsrelease.htm EXHIBIT 99.1 Exhibit 99.1 - Earnings Release


Exhibit 99.1
 
CyrusOne Reports Third Quarter 2013 Earnings
Record 62,000 CSF Leased and Revenue Growth of 19%

DALLAS (November 6, 2013) - Global data center service provider CyrusOne Inc (NASDAQ: CONE), which specializes in providing highly reliable enterprise-class, carrier-neutral data center properties to the Fortune 1000, today announced third quarter 2013 earnings.

Third Quarter Highlights

•
Record leasing of 62,000 colocation square feet, a 68% increase from the prior quarter and over 500% of the amount leased in the third quarter of 2012, including the previously announced lease signed in July for the San Antonio facility

•
Revenue of $67.5 million increased 19% over the third quarter of 2012. Normalized FFO and AFFO increased 44% and 46%, respectively, over the third quarter of 2012. Adjusted EBITDA growth of 21% over the third quarter of 2012

•
Completely leased the San Antonio data center one year ahead of schedule, leased over 60% of the Phoenix data center, and pre-leased over 25% of the second data hall in the Carrollton facility

•
Launched CyrusOne Market Place and CyrusOne Express in early October, an innovative online tool and product line that provide simple and efficient data center solutions for small and medium sized businesses

•
Added six Fortune 1000 companies as new customers, bringing total Fortune 1000 customers to 128


“Our results this quarter highlight the broad strength of the platform we have created. This platform is uniquely focused on providing data center solutions to Fortune 1000 customers, who continue to trust CyrusOne to manage their most mission critical applications. This was our strongest leasing quarter ever and positions us well to meet our annual financial guidance for 2013,” said Gary Wojtaszek, president and chief executive officer of CyrusOne. “We are excited about the recent launch of the CyrusOne Market Place and CyrusOne Express, which, in addition to the CyrusOne National Internet Exchange (IX) product that was launched last quarter, highlight the creativity and innovation CyrusOne brings to the market.”
Financial Results
Revenue was $67.5 million for the third quarter, compared to $56.7 million for the same period in 2012, or an increase of 19%. Revenue growth was entirely organic and driven by strong leasing activity from the past several quarters. Operating income improved $0.8 million from the third quarter of 2012 as increased revenue of $10.8 million was offset by increased property operating expenses of $4.2 million, general and administrative expenses of $1.9 million and depreciation and amortization of $5.1 million, partially offset by fewer non-recurring charges. Net loss was $2.2 million for the third quarter, compared to a net loss of $2.8 million in the same period in 2012.
Net operating income (NOI)1 was $43.3 million for the third quarter, compared to $36.7 million in the same period in 2012, an increase of 18%. The increase in NOI was primarily due to the increase in revenue, partially offset by additional property operating costs from new facilities and expansions at existing facilities. Adjusted EBITDA2 was $36.5 million for the third quarter, compared to $30.1 million in the same period in 2012, an increase of 21%. The Adjusted EBITDA margin of 54.1% in the third quarter improved from 53.1% in the same period in 2012.
Normalized Funds From Operations (Normalized FFO)3 was $21.9 million for the third quarter, compared to $15.2 million in the same period in 2012, an increase of 44%. The increase in Normalized FFO was primarily due to growth in Adjusted EBITDA with lower interest expense as the company is using cash on hand to fund future growth. Normalized FFO per diluted common share or common share equivalent4 was $0.33 in the third quarter of 2013. Adjusted Funds From Operations (AFFO)5 was $19.3 million for the third quarter, compared to $13.2 million in the same period in 2012, an increase of 46%.
Leasing Activity
CyrusOne leased approximately 62,000 colocation square feet (CSF) or 12.8 MW of power in the third quarter, compared to 11,000 CSF in the same period in 2012. The company added six new Fortune 10006 customers in the period, bringing the total to 128 Fortune 1000 companies and 598 customers in total as of September 30, 2013. The weighted average lease term of the new leases based on square footage was 57 months, and approximately 86% of the CSF was leased to metered customers with the remainder leased on a full service basis. Recurring rent churn7 for the third quarter of 2013 was 1.0%, compared to 1.5% for the third quarter of 2012.





The CyrusOne National IX continued to gain traction as approximately 75% of new leases included IX services, up from 68% last quarter. The broad and increased acceptance of the IX suite of services highlights the benefits of our innovative connectivity solution. The CyrusOne National IX creates a virtual data center platform that mirrors the data center architecture deployed by most Fortune 1000 companies. This quarter, IX products increased average rent by 29% for those customers that signed new leases with interconnectivity.


Portfolio Utilization and Development

CSF available as of September 30, 2013 were approximately 992,000 across 25 facilities, an increase of approximately 96,000, or 11%, from a year ago. In the third quarter of 2013, the company added 22,000 CSF. Construction of an additional data hall was completed at West Seventh Street in Cincinnati, Ohio, which is the company’s flagship data center in Cincinnati and one of the largest carrier hotels in the Midwest. The company also commissioned and leased the remainder of the San Antonio facility. CSF utilization8 for the third quarter was 85%, compared to 78% in the same period in 2012 and 81% in the second quarter of 2013. In October, the company commissioned approximately 60,000 CSF at its Carrollton facility, of which more than 25% was pre-leased. Lastly, construction on a new San Antonio facility on the 22 acres of land acquired in August will commence in the fourth quarter.

Balance Sheet and Liquidity

As of September 30, 2013, the company had $543.8 million of long-term debt, cash and cash equivalents of $213.2 million, and an undrawn $225.0 million senior secured revolving credit facility. Net debt9 was $330.6 million as of September 30, 2013, or approximately 21% of the company's total enterprise value or 2.3x Adjusted EBITDA annualized. Available liquidity10 was $438.2 million as of September 30, 2013.
Dividend
On September 4, 2013, the company announced a dividend of $0.16 per share of common stock and common stock equivalent for the third quarter of 2013. The dividend was paid on October 15, 2013 to shareholders of record at the close of business on September 27, 2013.

2013 Guidance

CyrusOne is refining guidance for the full-year of 2013 at this time with improved visibility on results. Revenue guidance ranges has been narrowed to $260 to $265 million from the prior range of $260 of $270 million. Also, the capital expenditures categories for development and land acquisition have been combined.

Category
Guidance
Revenue
$260 - $265 million
Adjusted EBITDA
$133 - $137 million
Normalized FFO per diluted common share or common share equivalent*
$1.15 - $1.25
Capital Expenditures
 
Development
$210 - $216 million
Recurring
$4 - $6 million
Acquisition of Leased Facilities**
$28 million

* Calculated as if all diluted common shares and common share equivalents were issued and outstanding on January 1, 2013.
** Inclusive of all amounts spent on acquisition of leased facilities, including dollars not reported through the capital expenditures captions on the GAAP cash flow statement.

The annual guidance provided above represents forward-looking projections, 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. Further, the guidance does not include the impact of any future financing, investment or disposition activities.


Upcoming Conferences and Events

•
REITWorld 2013: NAREIT's Annual Convention for All Things REIT on November 13-15 in San Francisco




•
Raymond James Systems, Semiconductors, Software and Supply Chain Conference on December 9-10 in New York
•
Citi 2014 Internet Media & Telecom Conference on January 6-8 in Las Vegas

Conference Call Details

CyrusOne will host a conference call on November 6, 2013 at 5:00 PM Eastern Time (4:00 PM Central Time) to discuss its results for the third quarter of 2013. A live webcast of the conference call will also be available on the investor relations page of the company's website at http://investor.cyrusone.com/index.cfm. The conference call dial-in number is 1-866-652-5200, and the international dial-in number is 1-412-317-6060. Passcode for the call is 10036203. A replay will be available one hour after the conclusion of the earnings call on November 6, 2013, until 9:00 AM (ET) on November 14, 2013. 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. Replay passcode is 10036203. An archived version of the webcast will also be available on the investor relations page of the company's website at http://investor.cyrusone.com/index.cfm.

Safe Harbor
This release contains forward-looking statements regarding future events and our future results that are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as "expects," "anticipates," "predicts," "projects," "intends," "plans," "believes," "seeks," "estimates," "continues," "endeavors," "strives," "may," variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance (including annual guidance for the remainder of 2013), our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned these forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially and adversely from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this release and those discussed in other documents we file with the Securities and Exchange Commission (SEC). More information on potential risks and uncertainties is available in our recent filings with the SEC, including CyrusOne's Form 10-K report and Form 8-K reports. Actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.
Use of Non-GAAP Financial Measures

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, Net Operating Income, Adjusted Funds From Operations, Adjusted EBITDA, and Net debt should not be construed as being more important than or substitutes for comparable GAAP measures. Detailed reconciliations of these non-GAAP financial measures to comparable GAAP financial measures have been included in the tables distributed with this release and are available in the Investor Relations section of www.cyrusone.com.
Management uses FFO, Normalized FFO, NOI, AFFO and Adjusted EBITDA as supplemental performance measures because they provide performance measures that, when compared year over year, capture trends in occupancy rates, rental rates and operating costs. Management uses net debt as a supplemental measure of the Company’s liquidity and financial health. The company also believes that, as widely recognized measures of the performance and financial position of real estate investment trusts (REITs) and other companies, these measures are used by investors as a basis to compare its operating performance and financial position with that of other companies. Other companies may not calculate these measures in the same manner, and, as presented, they may not be comparable to others. Therefore, FFO, Normalized FFO, NOI, AFFO and Adjusted EBITDA should be considered only as supplements to net income as measures of our performance. FFO, Normalized FFO, NOI, AFFO and Adjusted EBITDA should not be used as measures of liquidity nor as indicative of funds available to fund the company's cash needs, including the ability to make distributions. These measures also should not be used as supplements to or substitutes for cash flow from operating activities computed in accordance with U.S. GAAP.
1Net Operating Income (NOI) is defined as revenue less property operating expenses. Unlike operating income, net operating income excludes depreciation and amortization (including deferred leasing costs). Net operating income also excludes certain costs that are not property specific, but rather support our entire portfolio, such as sales and marketing costs (consisting of salaries and benefits for our internal sales staff, travel and entertainment, office supplies, marketing and advertising costs) and general and administrative costs (consisting of salaries and benefits of our senior management and support functions, legal and consulting costs, and other administrative costs). CyrusOne has not historically incurred any tenant improvement costs.




2Adjusted EBITDA is defined as net (loss) income before noncontrolling interests as defined by U.S. GAAP plus interest expense, other income, income tax (benefit) expense, depreciation and amortization, restructuring charges, legal claim costs, transaction costs and transaction-related compensation, including acquisition pursuit costs, loss on sale of receivables to affiliate, non-cash compensation, (gain) loss on extinguishment of debt, asset impairments, (gain) loss on sale of real estate improvements, and other special items.
3Normalized Funds From Operations (Normalized FFO) is defined as Funds From Operations (FFO) plus transaction costs, including acquisition pursuit costs, transaction-related compensation, (gain) loss on extinguishment of debt, restructuring charges, legal claim costs and other special items. FFO represents net (loss) income before noncontrolling interests computed in accordance with U.S. GAAP, real estate-related depreciation and amortization, amortization of customer relationship intangibles, real estate and customer relationship intangible impairments, and (gain) loss from sales of real estate improvements. Because the value of the customer relationship intangibles is inextricably connected to the real estate acquired, CyrusOne believes the amortization and impairments of such intangibles is analogous to real estate depreciation and impairments; therefore, the company adds the customer relationship intangible amortization and impairments back for similar treatment with real estate depreciation and impairments. CyrusOne's customer relationship intangibles are primarily associated with the acquisition of Cyrus Networks in 2010 and, at the time of acquisition, represented 22% of the value of the assets acquired.
4Normalized FFO per diluted common share or common share equivalent is defined as Normalized FFO divided by the average diluted common shares and common share equivalents outstanding for the quarter, which were approximately 64.7 million for the third quarter of 2013.
5Adjusted Funds From Operations (AFFO) is defined as Normalized FFO plus amortization of deferred financing costs, non-cash compensation, and non-real estate depreciation and amortization, less deferred revenue and straight line rent adjustments, leasing commissions, recurring capital expenditures, and non-cash corporate income tax benefit and expense.
6Fortune 1000 customers include subsidiaries whose ultimate parent is a Fortune 1000 company or a foreign or private company of equivalent size.
7Recurring rent churn is calculated as any reduction in recurring rent due to customer terminations, service reductions or net pricing decreases as a percentage of annualized rent at the beginning of the period, excluding any impact from metered power reimbursements or other usage-based billing.

8Utilization rate is calculated by dividing CSF under signed leases for available space (whether or not the contract has commenced billing) by total CSF. Utilization rate differs from percent leased presented in the Data Center Portfolio table because utilization rate excludes office space and supporting infrastructure net rentable square footage and includes CSF for signed leases that have not commenced billing.
9Net debt is defined as long-term debt and capital lease obligations, offset by cash, cash equivalents, and temporary cash investments.
10Available liquidity is calculated as cash, cash equivalents, and temporary cash investments on hand plus the undrawn capacity on CyrusOne's corporate revolving credit facility.
About CyrusOne

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 more than 575 customers, including nine of the Fortune 20 and more than 100 of the 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 25 data centers worldwide.

# # #








Investor Relations:
Idalia Rodriguez or Jamie Lillis
972-350-0060
investorrelations@cyrusone.com






CyrusOne Inc.
Combined Statements of Operations
(Dollars in millions, except per share amounts)
(Unaudited)
 

 
 
Three Months Ended September 30,

 

 
 
Nine Months Ended September 30,
 
 
 
 
 
 
Change
 
Change
 
 
2013

2012

$

%
 
2013
 
2012
 
$
 
%
Revenue
 
$
67.5


$
56.7


$
10.8


19%
 
$
191.2

 
$
162.8

 
$
28.4

 
17%
Costs and expenses:
 







 
 
 

 
 
 
 
Property operating expenses
 
24.2


20.0


4.2


21%
 
68.9

 
55.3

 
13.6

 
25%
Sales and marketing
 
2.3


2.1


0.2


10%
 
8.0

 
5.8

 
2.2

 
38%
General and administrative
 
7.2


5.3


1.9


36%
 
21.2

 
15.4

 
5.8

 
38%
Transaction-related compensation
 
—


—


—


n/m
 
20.0

 
—

 
20.0

 
n/m
Depreciation and amortization
 
23.9


18.8


5.1


27%
 
68.6

 
52.9

 
15.7

 
30%
Restructuring charges
 
0.7

 
—

 
0.7

 
n/m
 
0.7

 
—

 
0.7

 
n/m
Transaction costs
 
0.7


0.6


0.1


17%
 
1.2

 
1.3

 
(0.1
)
 
(8)%
Management fees charged by CBI
 
—


0.9


(0.9
)

n/m
 
—

 
2.1

 
(2.1
)
 
n/m
Loss on sale of receivables to affiliate
 
—


1.3


(1.3
)

n/m
 
—

 
3.7

 
(3.7
)
 
n/m
Asset impairments
 
—

 
—

 
—

 
n/m
 
—

 
13.3

 
(13.3
)
 
n/m
Total costs and expenses
 
59.0


49.0


10.0


20%
 
188.6

 
149.8

 
38.8

 
26%
Operating income
 
8.5


7.7


0.8


10%
 
2.6

 
13.0

 
(10.4
)
 
(80)%
Interest expense
 
10.5


11.3


(0.8
)

(7)%
 
32.2

 
31.2

 
1.0

 
3%
Other income
 
(0.1
)
 
—

 
(0.1
)
 
n/m
 
(0.1
)
 
—

 
(0.1
)
 
n/m
Loss on extinguishment of debt
 
—

 
—

 
—

 
n/m
 
1.3

 
—

 
1.3

 
n/m
Loss before income taxes
 
(1.9
)
 
(3.6
)

1.7


(47)%
 
(30.8
)
 
(18.2
)
 
(12.6
)
 
69%
Income tax (expense) benefit
 
(0.3
)

0.7


(1.0
)

(143)%
 
(1.2
)
 
4.7

 
(5.9
)
 
n/m
Net loss
 
(2.2
)

(2.9
)

0.7


(24)%
 
(32.0
)
 
(13.5
)
 
(18.5
)
 
n/m
Gain on sale of real estate improvements
 
—

 
0.1

 
(0.1
)
 
n/m
 
—

 
0.1

 
(0.1
)
 
n/m
Net loss attributed to Predecessor
 
—

 
(2.8
)
 
2.8


(100)%
 
(20.2
)
 
(13.4
)
 
(6.8
)
 
n/m
Noncontrolling interest in net loss
 
1.4


—


1.4


n/m
 
7.8

 
—

 
7.8

 
n/m
Net loss attributed to common stockholders
 
$
(0.8
)

$
—


$
(0.8
)

n/m
 
$
(4.0
)
 
$
—

 
$
(4.0
)
 
n/m
Loss per common share - basic and diluted
 
$
(0.05
)

n/a




 
 
$
(0.22
)
 
n/a

 


 
 




















CyrusOne Inc.
Combined Balance Sheets
(Dollars in millions)
(Unaudited)

 
 
 
September 30,
 
December 31,
 
Change
 
 
2013
 
2012
 
$
 
%
Assets
 
 
 
 
 
 
 
 
Investment in real estate:
 
 
 
 
 
 
 
 
Land
 
$
81.5

 
$
44.5

 
$
37.0

 
83
 %
Buildings and improvements
 
778.2

 
722.5

 
55.7

 
8
 %
Equipment
 
134.3

 
52.4

 
81.9

 
n/m

Construction in progress
 
63.2

 
64.2

 
(1.0
)
 
(2
)%
Subtotal
 
1,057.2

 
883.6

 
173.6

 
20
 %
Accumulated depreciation
 
(218.6
)
 
(176.7
)
 
(41.9
)
 
24
 %
Net investment in real estate
 
838.6

 
706.9

 
131.7

 
19
 %
Cash and cash equivalents
 
213.2

 
16.5

 
196.7

 
n/m

Rent and other receivables
 
33.9

 
33.2

 
0.7

 
2
 %
Restricted cash
 
—

 
6.3

 
(6.3
)
 
n/m

Goodwill
 
276.2

 
276.2

 
—

 
0%

Intangible assets, net
 
89.9

 
102.6

 
(12.7
)
 
(12
)%
Due from affiliates
 
0.9

 
2.2

 
(1.3
)
 
(59
)%
Other assets
 
67.2

 
67.0

 
0.2

 
0%

Total assets
 
$
1,519.9

 
$
1,210.9

 
$
309.0

 
26
 %
Liabilities and Equity
 
 
 
 
 

 

Accounts payable and accrued expenses
 
$
67.8

 
$
37.1

 
$
30.7

 
83
 %
Deferred revenue
 
55.1

 
52.8

 
2.3

 
4
 %
Due to affiliates
 
7.0

 
2.9

 
4.1

 
n/m

Capital lease obligations
 
18.8

 
32.2

 
(13.4
)
 
(42
)%
Long-term debt
 
525.0

 
525.0

 
—

 
0%

Other financing arrangements
 
55.8

 
60.8

 
(5.0
)
 
(8
)%
Total liabilities
 
729.5

 
710.8

 
18.7

 
3
 %
Shareholders’ Equity / Parent’s net investment:
 

 
 
 

 

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 22,116,172 shares issued and outstanding at September 30, 2013
 
0.2

 
—

 
0.2

 
n/m

Common stock, $.01 par value, 1,000 shares authorized and 100 shares issued and outstanding at December 31, 2012
 
—

 
—

 
—

 
n/m

Paid in capital
 
339.4

 
7.1

 
332.3

 
n/m

Accumulated deficit
 
(14.2
)
 
—

 
(14.2
)
 
n/m

Partnership capital
 
—

 
493.0

 
(493.0
)
 
n/m

Total shareholders’ equity / parent’s net investment
 
325.4

 
500.1

 
(174.7
)
 
(35
)%
Noncontrolling interests
 
465.0

 
—

 
465.0

 
n/m

Total Equity
 
790.4

 
500.1

 
290.3

 
58
 %
Total liabilities and shareholders’ equity / parent’s net investment
 
$
1,519.9

 
$
1,210.9

 
$
309.0

 
26
 %








CyrusOne Inc.
Combined Statements of Operations
(Dollars in millions, except per share amounts)
(Unaudited)

 
For the three months ended:
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
 
2013
 
2013
 
2013
 
2012
 
2012
Revenue
 
$
67.5

 
$
63.6

 
$
60.1

 
$
58.0

 
$
56.7

Costs and expenses:
 
 
 
 
 
 
 
 
 
 
Property operating expenses
 
24.2

 
24.6

 
20.1

 
20.6

 
20.0

Sales and marketing
 
2.3

 
2.9

 
2.8

 
4.0

 
2.1

General and administrative
 
7.2

 
7.1

 
6.9

 
5.4

 
5.3

Transaction-related compensation
 
—

 
—

 
20.0

 
—

 
—

Depreciation and amortization
 
23.9

 
23.0

 
21.7

 
20.4

 
18.8

Restructuring charges
 
0.7

 
—

 
—

 
—

 
—

Transaction costs
 
0.7

 
0.4

 
0.1

 
4.4

 
0.6

Management fees charged by CBI
 
—

 
—

 
—

 
0.4

 
0.9

(Gain) loss on sale of receivables to affiliate
 
—

 
—

 
—

 
(0.4
)
 
1.3

Asset impairments
 
—

 
—

 
—

 
—

 
—

Total costs and expenses
 
59.0

 
58.0

 
71.6

 
54.8

 
49.0

Operating income (loss)
 
8.5

 
5.6

 
(11.5
)
 
3.2

 
7.7

Interest expense
 
10.5

 
10.8

 
10.9

 
10.5

 
11.3

Other income
 
(0.1
)
 
—

 
—

 
—

 
—

Loss on extinguishment of debt
 
—

 
1.3

 
—

 
—

 
—

Loss before income taxes
 
(1.9
)
 
(6.5
)
 
(22.4
)
 
(7.3
)
 
(3.6
)
Income tax (expense) benefit
 
(0.3
)
 
(0.3
)
 
(0.6
)
 
0.4

 
0.7

Net loss from continuing operations
 
(2.2
)
 
(6.8
)
 
(23.0
)
 
(6.9
)
 
(2.9
)
Gain on sale of real estate improvements
 
—

 
—

 
—

 
—

 
0.1

Net loss attributed to Predecessor
 
—

 
—

 
(20.2
)
 
(6.9
)
 
(2.8
)
Noncontrolling interest in net loss
 
1.4

 
4.5

 
1.9

 
—

 
—

Net loss attributed to common stockholders
 
$
(0.8
)
 
$
(2.3
)
 
$
(0.9
)
 
$
—

 
$
—

Loss per common share - basic diluted
 
$
(0.05
)
 
$
(0.12
)
 
$
(0.05
)
 
n/a

 
n/a























CyrusOne Inc.
Combined Balance Sheets
(Dollars in millions)
(Unaudited) 


 
 
September 30, 2013
 
June 30, 2013
 
March 31,
2013
 
December 31,
2012
 
September 30,
2012
Assets
 
 
 
 
 
 
 
 
 
 
Investment in real estate:
 
 
 
 
 
 
 
 
 
 
Land
 
$
81.5

 
$
74.6

 
$
44.4

 
$
44.5

 
$
41.2

Buildings and improvements
 
778.2

 
778.5

 
740.7

 
722.5

 
666.5

Equipment
 
134.3

 
97.4

 
68.7

 
52.4

 
43.2

Construction in progress
 
63.2

 
48.2

 
92.6

 
64.2

 
56.6

Subtotal
 
1,057.2

 
998.7

 
946.4

 
883.6

 
807.5

Accumulated depreciation
 
(218.6
)
 
(208.7
)
 
(192.1
)
 
(176.7
)
 
(162.9
)
Net investment in real estate
 
838.6

 
790.0

 
754.3

 
706.9

 
644.6

Cash and cash equivalents
 
213.2

 
267.1

 
328.6

 
16.5

 
3.2

Rent and other receivables
 
33.9

 
27.2

 
30.0

 
33.2

 
—

Restricted cash
 
—

 
—

 
2.6

 
6.3

 
10.4

Goodwill
 
276.2

 
276.2

 
276.2

 
276.2

 
276.2

Intangible assets, net
 
89.9

 
94.1

 
98.4

 
102.6

 
106.7

Due from affiliates
 
0.9

 
1.6

 
23.2

 
2.2

 
9.6

Other assets
 
67.2

 
63.6

 
60.7

 
67.0

 
40.1

Total assets
 
$
1,519.9

 
$
1,519.8

 
$
1,574.0

 
$
1,210.9

 
$
1,090.8

Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
67.8

 
$
59.3

 
$
78.7

 
$
37.1

 
$
41.9

Deferred revenue
 
55.1

 
52.8

 
51.7

 
52.8

 
52.1

Due to affiliates
 
7.0

 
7.7

 
8.2

 
2.9

 
—

Capital lease obligations
 
18.8

 
19.8

 
31.0

 
32.2

 
38.0

Long-term debt
 
525.0

 
525.0

 
525.0

 
525.0

 
—

Related party notes payable
 
—

 
—

 
—

 
—

 
612.1

Other financing arrangements
 
55.8

 
54.0

 
62.9

 
60.8

 
49.2

Total liabilities
 
729.5

 
718.6

 
757.5

 
710.8

 
793.3

Shareholders’ Equity / Parent’s net investment:
 
 
 
 
 
 
 
 
 
 
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 22,116,172 shares issued and outstanding at September 30, 2013
 
0.2

 
0.2

 
0.2

 
—

 
—

Common stock, $.01 par value, 1,000 shares authorized and 100 shares issued and outstanding at December 31, 2012
 
—

 
—

 
—

 
—

 
—

Paid in capital
 
339.4

 
337.5

 
335.7

 
7.1

 
—

Accumulated deficit
 
(14.2
)
 
(9.7
)
 
(3.9
)
 
—

 
—

Partnership capital
 
—

 
—

 
—

 
493.0

 
297.5

Total shareholders’ equity / parent’s net investment
 
325.4

 
328.0

 
332.0

 
500.1

 
297.5

Noncontrolling interests
 
465.0

 
473.2

 
484.5

 
—

 
—

Total Equity
 
790.4

 
801.2

 
816.5

 
500.1

 
297.5

Total liabilities and shareholders’ equity / parent’s net investment
 
$
1,519.9

 
$
1,519.8

 
$
1,574.0

 
$
1,210.9

 
$
1,090.8








CyrusOne Inc.
Reconciliation of Statement of Operations for the Three Months Ended March 31, 2013
(Dollars in millions, except per share amounts)
(Unaudited)

 
 
 
Predecessor
 
Successor
 
Combined
 
 
January 1, 2013
to January 23, 2013
 
January 24, 2013
to March 31, 2013
 
Three Months Ended
March 31, 2013
Revenue
 
$
15.1

 
$
45.0

 
$
60.1

Costs and expenses:
 
 
 
 
 
 
Property operating expenses
 
4.8

 
15.3

 
20.1

Sales and marketing
 
0.7

 
2.1

 
2.8

General and administrative
 
1.5

 
5.4

 
6.9

Transaction-related compensation
 
20.0

 
—

 
20.0

Depreciation and amortization
 
5.3

 
16.4

 
21.7

Transaction costs
 
0.1

 
—

 
0.1

Total costs and expenses
 
32.4

 
39.2

 
71.6

Operating income (loss)
 
(17.3
)
 
5.8

 
(11.5
)
Interest expense
 
2.5

 
8.4

 
10.9

Loss before income taxes
 
(19.8
)
 
(2.6
)
 
(22.4
)
Income tax (expense) benefit
 
(0.4
)
 
(0.2
)
 
(0.6
)
Net loss
 
(20.2
)
 
(2.8
)
 
(23.0
)
Net loss attributed to Predecessor
 
(20.2
)
 
—

 
(20.2
)
Noncontrolling interest in net loss
 
—

 
1.9

 
1.9

Net loss attributed to common stockholders
 
$
—

 
$
(0.9
)
 
$
(0.9
)
Loss per common share - basic and diluted
 
n/a

 
$
(0.05
)
 
$
(0.05
)
































CyrusOne Inc.
Reconciliation of Statement of Operations for the Nine Months Ended September 30, 2013
(Dollars in millions, except per share amounts)
(Unaudited)


 
 
Predecessor
 
Successor
 
Combined
 
 
January 1, 2013
to January 23, 2013
 
January 24, 2013 to September 30, 2013
 
Nine Months Ended September 30, 2013
Revenue
 
$
15.1

 
$
176.1

 
$
191.2

Costs and expenses:
 
 
 
 
 
 
Property operating expenses
 
4.8

 
64.1

 
68.9

Sales and marketing
 
0.7

 
7.3

 
8.0

General and administrative
 
1.5

 
19.7

 
21.2

Transaction-related compensation
 
20.0

 
—

 
20.0

Depreciation and amortization
 
5.3

 
63.3

 
68.6

Restructuring charges
 
—

 
0.7

 
0.7

Transaction costs
 
0.1

 
1.1

 
1.2

Total costs and expenses
 
32.4

 
156.2

 
188.6

Operating income (loss)
 
(17.3
)
 
19.9

 
2.6

Interest expense
 
2.5

 
29.7

 
32.2

Other income
 
—

 
(0.1
)
 
(0.1
)
Loss on extinguishment of debt
 
—

 
1.3

 
1.3

Loss before income taxes
 
(19.8
)
 
(11.0
)
 
(30.8
)
Income tax (expense) benefit
 
(0.4
)
 
(0.8
)
 
(1.2
)
Net loss
 
(20.2
)
 
(11.8
)
 
(32.0
)
Net loss attributed to Predecessor
 
(20.2
)
 
—

 
(20.2
)
Noncontrolling interest in net loss
 
—

 
7.8

 
7.8

Net loss attributed to common stockholders
 
$
—

 
$
(4.0
)
 
$
(4.0
)
Loss per common share - basic and diluted
 
n/a

 
$
(0.22
)
 
$
(0.22
)





























CyrusOne Inc.
Net Operating Income and Reconciliation of Net Loss to Adjusted EBITDA
(Dollars in millions)
(Unaudited)

 
 
 
Nine Months Ended
 
 
 
 
 
Three Months Ended
 
 
September 30,
 
Change
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
 
2013
 
2012
 
$
 
%
 
2013
 
2013
 
2013
 
2012
 
2012
Net Operating Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
191.2

 
$
162.8

 
$
28.4

 
17%
 
$
67.5

 
$
63.6

 
$
60.1

 
$
58.0

 
$
56.7

Property operating expenses
 
68.9

 
55.3

 
13.6

 
25%
 
24.2

 
24.6

 
20.1

 
20.6

 
20.0

Net Operating Income (NOI)
 
$
122.3

 
$
107.5

 
$
14.8

 
14%
 
$
43.3

 
$
39.0

 
$
40.0

 
$
37.4

 
$
36.7

NOI as a % of Revenue
 
64.0
%
 
66.0
%
 
 
 
 
 
64.1
%
 
61.3
%
 
66.6
%
 
64.5
%
 
64.7
%
Reconciliation of Net Loss to Adjusted EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 
$
(32.0
)
 
$
(13.4
)
 
$
(18.6
)
 
n/m
 
$
(2.2
)
 
$
(6.8
)
 
$
(23.0
)
 
$
(6.9
)
 
$
(2.8
)
Adjustments:
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
Interest expense
 
32.2

 
31.2

 
1.0

 
3%
 
10.5

 
10.8

 
10.9

 
10.5

 
11.3

Other income
 
(0.1
)
 
—

 
(0.1
)
 
n/m
 
(0.1
)
 
—

 
—

 
—

 
—

Income tax (benefit) expense
 
1.2

 
(4.7
)
 
5.9

 
n/m
 
0.3

 
0.3

 
0.6

 
(0.4
)
 
(0.7
)
Depreciation and amortization
 
68.6

 
52.9

 
15.7

 
30%
 
23.9

 
23.0

 
21.7

 
20.4

 
18.8

Restructuring charges
 
0.7

 
—

 
0.7

 
n/m
 
0.7

 
—

 
—

 
—

 
—

Legal claim costs
 
0.7

 
—

 
0.7

 
n/m
 
0.7

 
—

 
—

 
—

 
—

Transaction costs
 
1.2

 
1.3

 
(0.1
)
 
(8)%
 
0.7

 
0.4

 
0.1

 
4.4

 
0.6

Loss on sale of receivables to affiliate
 
—

 
3.7

 
(3.7
)
 
n/m
 
—

 
—

 
—

 
(0.4
)
 
1.3

Non-cash compensation
 
5.0

 
2.6

 
2.4

 
92%
 
2.0

 
1.8

 
1.2

 
0.8

 
1.7

Asset impairments
 
—

 
13.3

 
(13.3
)
 
n/m
 
—

 
—

 
—

 
—

 
—

Loss on extinguishment of debt
 
1.3

 
—

 
1.3

 
n/m
 
—

 
1.3

 
—

 
—

 
—

Gain on sale of real estate improvements
 
—

 
(0.1
)
 
0.1

 
n/m
 
—

 
—

 
—

 
—

 
(0.1
)
Transaction-related compensation
 
20.0

 
—

 
20.0

 
n/m
 
—

 
—

 
20.0

 
—

 
—

Adjusted EBITDA
 
$
98.8

 
$
86.8

 
$
12.0

 
14%
 
$
36.5

 
$
30.8

 
$
31.5

 
$
28.4

 
$
30.1

Adjusted EBITDA as a % of Revenue
 
51.7
%
 
53.3
%
 
 
 
 
 
54.1
%
 
48.4
%
 
52.4
%
 
49.0
%
 
53.1
%

























CyrusOne Inc.
Reconciliation of Net Loss to FFO, Normalized FFO, and AFFO
(Dollars in millions)
(Unaudited)

 
 
 
Nine Months Ended
 
 
 
 
 
Three Months Ended
 
 
September 30,
 
Change
 
September 30, 2013
 
June 30,
2013
 
March 31,
2013
 
December 31,
2012
 
September 30,
2012
2013
 
2012
 
$
 
%
 
Reconciliation of Net Loss to FFO and Normalized FFO:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(32.0
)
 
$
(13.4
)
 
$
(18.6
)
 
n/m

 
$
(2.2
)
 
$
(6.8
)
 
$
(23.0
)
 
$
(6.9
)
 
$
(2.8
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate depreciation and amortization
 
50.6

 
37.5

 
13.1

 
35
 %
 
17.8

 
16.9

 
15.9

 
15.4

 
13.6

Amortization of customer relationship intangibles
 
12.6

 
12.1

 
0.5

 
4
 %
 
4.2

 
4.2

 
4.2

 
3.9

 
4.0

Real estate impairments
 
—

 
11.7

 
(11.7
)
 
n/m

 
—

 
—

 
—

 
—

 
(0.1
)
Customer relationship intangible impairments
 
—

 
1.5

 
(1.5
)
 
n/m

 
—

 
—

 
—

 
—

 
—

Gain on sale of real estate improvements
 
—

 
(0.1
)
 
0.1

 
n/m

 
—

 
—

 
—

 
—

 
(0.1
)
Funds from Operations (FFO)
 
$
31.2

 
$
49.3

 
(18.1
)
 
n/m

 
$
19.8

 
$
14.3

 
$
(2.9
)
 
$
12.4

 
$
14.6

Transaction-related compensation
 
20.0

 
—

 
20.0

 
n/m

 
—

 
—

 
20.0

 
—

 
—

Loss on extinguishment of debt
 
1.3

 
—

 
1.3

 
n/m

 
—

 
1.3

 
—

 
—

 
—

Restructuring charges
 
0.7

 
—

 
0.7

 
n/m

 
0.7

 
—

 
—

 
—

 
—

Legal claim costs
 
0.7

 
—

 
0.7

 
n/m

 
0.7

 
—

 
—

 
—

 
—

Transaction costs
 
1.2

 
1.3

 
(0.1
)
 
(8
)%
 
$
0.7

 
$
0.4

 
$
0.1

 
4.4

 
0.6

Normalized Funds from Operations (Normalized FFO)
 
$
55.1

 
$
50.6

 
$
4.5

 
9
 %
 
$
21.9

 
$
16.0

 
$
17.2

 
$
16.8

 
$
15.2

Normalized FFO per diluted common share or common share equivalent*
 
$
0.85

 
n/a

 
$
—

 
n/m

 
$
0.33

 
0.25

 
0.27

 
n/a

 
n/a

Reconciliation of Normalized FFO to AFFO:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Normalized FFO
 
$
55.1

 
$
50.6

 
4.5

 
9
 %
 
$
21.9

 
$
16.0

 
$
17.2

 
$
16.8

 
$
15.2

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of deferred financing costs
 
2.8

 
—

 
2.8

 
n/m

 
0.5

 
1.7

 
0.6

 
0.3

 
—

Non-cash compensation
 
5.0

 
2.6

 
2.4

 
92
 %
 
2.0

 
1.8

 
1.2

 
0.8

 
1.7

Non-real estate depreciation and amortization
 
5.4

 
3.4

 
2.0

 
59
 %
 
1.9

 
1.9

 
1.6

 
1.1

 
1.2

Deferred revenue and straight line rent adjustments
 
(9.7
)
 
(6.0
)
 
(3.7
)
 
62
 %
 
(3.7
)
 
(3.7
)
 
(2.3
)
 
(2.3
)
 
(2.0
)
Leasing commissions
 
(5.1
)
 
(3.3
)
 
(1.8
)
 
55
 %
 
(1.7
)
 
(2.5
)
 
(0.9
)
 
(1.1
)
 
(1.0
)
Recurring capital expenditures
 
(2.3
)
 
(2.3
)
 
—

 
—
 %
 
(1.6
)
 
(0.4
)
 
(0.3
)
 
(1.6
)
 
(1.0
)
Corporate income tax (benefit) expense
 
0.4

 
(5.3
)
 
5.7

 
n/m

 
—

 
—

 
0.4

 
(0.5
)
 
(0.9
)
Adjusted Funds from Operations (AFFO)
 
$
51.6

 
$
39.7

 
$
11.9

 
30
 %
 
$
19.3

 
$
14.8

 
$
17.5

 
$
13.5

 
$
13.2

*
Assumes diluted common shares and common share equivalents were outstanding as of January 1, 2013 for the Three Months Ended March 31, 2013.













CyrusOne Inc.
Market Capitalization Summary and Reconciliation of Net Debt
(Unaudited)


Market Capitalization
 
 
Shares or
Equivalents
Outstanding
 
Market Price
as of
September 30, 2013
 
Market Value
Equivalents
(in millions)
Common shares
 
22,116,172

 
$
19.00

 
$
420.2

Operating Partnership units
 
42,586,835

 
$
19.00

 
809.1

Net Debt
 
 
 
 
 
330.6

Total Enterprise Value (TEV)
 
 
 
 
 
$
1,559.9

Net Debt as a % of TEV
 
 
 
 
 
21.2
%
Net Debt to LQA Adjusted EBITDA
 
 
 
 
 
2.3x



Reconciliation of Net Debt
(Dollars in millions)
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
 
2013
 
2013
 
2013
 
2012
Long-term debt
 
$
525.0

 
$
525.0

 
$
525.0

 
$
525.0

Capital lease obligations
 
18.8

 
19.8

 
31.0

 
32.2

Less:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
(213.2
)
 
(267.1
)
 
(328.6
)
 
(16.5
)
Net Debt
 
$
330.6

 
$
277.7

 
$
227.4

 
$
540.7


































CyrusOne Inc.
Colocation Square Footage (CSF) and Utilization
(Unaudited)
 

 
 
As of September 30, 2013
 
As of December 31, 2012
 
As of September 30, 2012
Market
 
CSF Capacity
(Sq Ft)
 
% Utilized
 
CSF Capacity
(Sq Ft)
 
% Utilized
 
CSF Capacity
(Sq Ft)
 
% Utilized
Cincinnati
 
419,231

 
87
%
 
411,730

 
92
%
 
411,730

 
92
%
Dallas
 
171,780

 
93
%
 
171,100

 
69
%
 
171,100

 
67
%
Houston
 
230,718

 
85
%
 
188,602

 
93
%
 
188,602

 
87
%
Austin
 
54,003

 
63
%
 
57,078

 
32
%
 
57,078

 
30
%
Phoenix
 
36,366

 
64
%
 
36,222

 
0%

 
—

 
0%

San Antonio
 
43,487

 
99
%
 
35,765

 
61
%
 
35,765

 
17
%
Chicago
 
23,298

 
52
%
 
23,278

 
52
%
 
23,278

 
58
%
International
 
13,200

 
78
%
 
8,200

 
52
%
 
8,200

 
24
%
Total Footprint
 
992,083

 
85
%
 
931,975

 
78
%
 
895,753

 
78
%














































CyrusOne Inc.
2013 Guidance
(Unaudited)

 
 
 
 
 
  
Full Year 2013
Revenue
  
$260 - $265 million
Adjusted EBITDA
  
$133 - $137 million
Normalized FFO per diluted common share or common share equivalent*
  
$1.15 - $1.25
 

Capital Expenditures
  

Development
  
$210 - $216 million
Recurring
  
$4 - $6 million
Acquisition of Leased Facilities**
  
$28 million
*
Calculated as if all diluted common shares and common share equivalents were issued and outstanding as of January 1, 2013.
**
Inclusive of all amounts spent on acquisition of leased facilities, including dollars not reported through the capital expenditures captions on the GAAP cash flow statement.









































CyrusOne Inc.
Data Center Portfolio
As of September 30, 2013
(Unaudited)

 
 
 
 
 
Operating Net Rentable Square Feet (NRSF)(a)
 
Powered
Shell 
Available
for Future 
Development
(NRSF)(h)
 
Available UPS Capacity  (MW)(i)
Facilities
Metropolitan
Area
 
Annualized
Rent(b)
 
Colocation
Space
(CSF)(c)
 
Office &
Other(d)
 
Supporting
Infrastructure
(e)
 
Total(f)
 
Percent
Leased(g)
 
Southwest Fwy. (Galleria)
Houston
 
$
45,273,693

 
63,469

 
17,259

 
23,203

 
103,931

 
90
%
 
—

 
14

Westway Park Blvd. (Houston West 1)
Houston
 
41,053,448

 
112,133

 
12,735

 
37,636

 
162,504

 
96
%
 
3,000

 
28

S. State Hwy 121 Business (Lewisville)*
Dallas
 
36,208,463

 
108,687

 
11,399

 
59,346

 
179,432

 
91
%
 
—

 
18

West Seventh Street (7th St.)***
Cincinnati
 
34,743,159

 
211,672

 
5,744

 
171,561

 
388,977

 
88
%
 
37,000

 
13

Fujitec Drive (Lebanon)
Cincinnati
 
19,386,260

 
65,303

 
36,261

 
49,159

 
150,723

 
76
%
 
72,000

 
14

Industrial Road (Florence)
Cincinnati
 
14,942,902

 
52,698

 
46,848

 
40,374

 
139,920

 
94
%
 
—

 
9

Knightsbridge Drive (Hamilton)*
Cincinnati
 
12,231,822

 
46,565

 
1,077

 
35,336

 
82,978

 
90
%
 
—

 
10

W. Frankford Road (Carrollton)
Dallas
 
7,256,565

 
47,438

 
19,706

 
35,592

 
102,736

 
57
%
 
441,000

 
3

Westover Hills Blvd. (San Antonio 1)
San Antonio
 
6,162,321

 
43,487

 
2,351

 
35,955

 
81,793

 
97
%
 
23,000

 
12

Parkway Dr. (Mason)
Cincinnati
 
5,877,943

 
34,072

 
26,458

 
17,193

 
77,723

 
99
%
 
—

 
4

E. Ben White Blvd. (Austin 1)*
Austin
 
5,682,784

 
16,223

 
21,376

 
7,516

 
45,115

 
95
%
 
—

 
2

Midway Rd.**
Dallas
 
5,397,262

 
8,390

 
—

 
—

 
8,390

 
100
%
 
—

 
1

Metropolis Drive (Austin 2)
Austin
 
5,375,381

 
37,780

 
4,128

 
18,444

 
60,352

 
38
%
 
—

 
5

Kestral Way (London)**
London
 
4,492,884

 
10,000

 
—

 
—

 
10,000

 
99
%
 
—

 
1

Springer Street (Lombard)
Chicago
 
2,283,510

 
13,516

 
4,115

 
12,230

 
29,861

 
59
%
 
29,000

 
3

Marsh Ln.**
Dallas
 
2,073,446

 
4,245

 
—

 
—

 
4,245

 
100
%
 
—

 
—

Westway Park Blvd. (Houston West 2)
Houston
 
1,776,560

 
42,116

 
3,065

 
31,344

 
76,525

 
26
%
 
77,000

 
6

Goldcoast Drive (Goldcoast)
Cincinnati
 
1,517,714

 
2,728

 
5,280

 
16,481

 
24,489

 
100
%
 
14,000

 
1

E. Monroe Street (Monroe St.)
South Bend
 
1,161,531

 
6,350

 
—

 
6,478

 
12,828

 
65
%
 
4,000

 
—

North Fwy. (Greenspoint)**
Houston
 
1,034,598

 
13,000

 
1,449

 
—

 
14,449

 
100
%
 
—

 
—

Bryan St.**
Dallas
 
1,029,418

 
3,020

 
—

 
—

 
3,020

 
58
%
 
—

 
—

South Ellis Street (Phoenix)
Phoenix
 
816,715

 
36,366

 
36,135

 
38,411

 
110,912

 
28
%
 
76,000

 
3

Crescent Circle (Blackthorn)*
South Bend
 
734,883

 
3,432

 
—

 
5,125

 
8,557

 
49
%
 
11,000

 
—

McAuley Place (Blue Ash)*
Cincinnati
 
551,268

 
6,193

 
6,950

 
2,166

 
15,309

 
71
%
 
—

 
—

Jurong East (Singapore)**
Singapore
 
325,240

 
3,200

 
—

 
—

 
3,200

 
12
%
 
—

 
2

Total
 
 
$
257,389,770

 
992,083

 
262,336

 
643,550

 
1,897,969

 
80
%
 
787,000

 
143



*
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 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 West Seventh Street (7th St.) 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)
Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of September 30, 2013, multiplied by 12. For the month of September 2013, customer reimbursements were $22.9 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 October 1, 2011 through September 30, 2013, customer reimbursements under leases with separately metered power constituted between 7.2% and 9.7% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2013 was $274,859,776. Our annualized effective rent was greater than our annualized rent as of September 30, 2013 because our positive straight-line and other adjustments and amortization of deferred revenue exceeded our negative straight-line adjustments due to factors such as the timing of contractual rent escalations and customer prepayments for services.
(c)
CSF represents the NRSF at an operating facility that is currently leased or readily available for lease as colocation space, where customers locate their servers and other IT equipment.
(d)
Represents the NRSF at an operating facility that is currently leased or readily available for lease as space other than CSF, which is typically office and other space.
(e)
Represents infrastructure support space, including mechanical, telecommunications and utility rooms, as well as building common areas.
(f)
Represents the NRSF at an operating facility that is currently leased or readily available for lease. This excludes existing vacant space held for development.
(g)
Percent leased is determined based on NRSF being billed to customers under signed leases as of September 30, 2013 divided by total NRSF. Leases signed but not commenced as of September 30, 2013 are not included. Supporting infrastructure has been allocated to leased NRSF on a proportionate basis for purposes of this calculation.
(h)
Represents space that is under roof that could be developed in the future for operating NRSF, rounded to the nearest 1,000.




(i)
UPS Capacity (also referred to as critical load) represents the aggregate power available for lease to and exclusive use by customers from the facility’s installed universal power supplies (UPS) expressed in terms of megawatts. The capacity presented is for non-redundant megawatts, as we can develop flexible solutions to our customers at multiple resiliency levels. May not foot due to rounding.




CyrusOne Inc.
NRSF Under Development
As of September 30, 2013
(Dollars in millions)
(Unaudited)

 

 
 
NRSF Under Development(a)
 
 
Under Development
 
Under Development Costs(b)
Facilities
Metropolitan
Area
Colocation Space
(CSF)
 
Office & Other
 
Supporting
Infrastructure
 
Powered  Shell(c)
 
Total
 
Actual to
Date
 
Estimated Costs to
Completion
 
Total
Westway Park Blvd (Houston West 2)
Houston
—

 
8,000

 
—

 
—

 
8,000

 
$
—

 
$
1

 
$
1

W Frankford Road (Carrollton)
Dallas
60,000

 
—

 
28,000

 
—

 
88,000

 
12

 
7

 
19

Total
 
60,000

 
8,000

 
28,000

 
—

 
96,000

 
$
12

 
$
8

 
$
20



(a)
Represents NRSF at a facility for which substantial activities have commenced to prepare the space for its intended use.
(b)
Represents management’s estimate of the total costs required to complete the current NRSF under development. There may be an increase in costs if customers require greater power density.
(c)
Represents NRSF under construction that, upon completion, will be powered shell available for future development into operating NRSF.







































CyrusOne Inc.
Customer Diversification(a) 
As of September 30, 2013
(Unaudited)

 
 
Principal Customer Industry
 
Number of
Locations
 
Annualized
Rent(b)
 
Percentage of
Portfolio
Annualized
Rent(c)
 
Weighted
Average
Remaining
Lease Term in
Months(d)
1
Telecommunications (CBI)(e)
 
7
 
$
23,710,914

 
9.2
%
 
31.0

2
Energy
 
2
 
19,032,482

 
7.4
%
 
2.8

3
Energy
 
4
 
14,942,972

 
5.8
%
 
4.4

4
Research and Consulting Services
 
3
 
13,208,719

 
5.1
%
 
0.3

5
Telecommunication Services
 
1
 
10,056,455

 
3.9
%
 
50.0

6
Information Technology
 
3
 
7,440,740

 
2.9
%
 
43.1

7
Financials
 
1
 
6,000,225

 
2.3
%
 
80.0

8
Telecommunication Services
 
1
 
5,013,892

 
1.9
%
 
67.0

9
Information Technology
 
1
 
4,845,316

 
1.9
%
 
27.0

10
Consumer Staples
 
1
 
4,743,436

 
1.8
%
 
102.9

11
Energy
 
2
 
4,731,000

 
1.8
%
 
34.0

12
Information Technology
 
3
 
4,625,641

 
1.8
%
 
55.7

13
Energy
 
1
 
4,101,396

 
1.6
%
 
13.7

14
Information Technology
 
1
 
4,006,477

 
1.6
%
 
89.0

15
Energy
 
3
 
3,870,111

 
1.5
%
 
7.1

16
Information Technology
 
2
 
3,831,921

 
1.5
%
 
89.0

17
Energy
 
1
 
3,612,639

 
1.4
%
 
32.3

18
Consumer Discretionary
 
1
 
3,303,607

 
1.3
%
 
3.2

19
Information Technology
 
2
 
3,283,480

 
1.3
%
 
36.1

20
Energy
 
1
 
3,236,416

 
1.3
%
 
13.6

 
 
 
 
 
$
147,597,839

 
57.3
%
 
31.2



(a)
Includes affiliates.
(b)
Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of September 30, 2013, multiplied by 12. For the month of September 2013, our total portfolio annualized rent was $257.4 million, and customer reimbursements were $22.9 million annualized, consisting 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 October 1, 2011 through September 30, 2013, customer reimbursements under leases with separately metered power constituted between 7.2% and 9.7% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent for our total portfolio as of September 30, 2013 was $274,859,776. Our annualized effective rent was greater than our annualized rent as of September 30, 2013 because our positive straight-line and other adjustments and amortization of deferred revenue exceeded our negative straight-line adjustments due to factors such as the timing of contractual rent escalations and customer prepayments for services.
(c)
Represents the customer’s total annualized rent divided by the total annualized rent in the portfolio as of September 30, 2013, which was approximately $257.4 million.
(d)
Weighted average based on customer’s percentage of total annualized rent expiring and is as of September 30, 2013, 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.
(e)
Includes information for both Cincinnati Bell Technology Solutions (CBTS) and Cincinnati Bell Telephone and two customers that have contracts with CBTS. We expect the contracts for these two customers to be assigned to us, but the consents for such assignments have not yet been obtained. Excluding these customers, Cincinnati Bell Inc. and subsidiaries represented 3.6% of our annualized rent as of September 30, 2013.












CyrusOne Inc.
Lease Distribution
As of September 30, 2013
(Unaudited)
 

NRSF Under Lease(a)
 
Number of
Customers(b)
 
Percentage of
All Customers
 
Total
Leased
NRSF(c)
 
Percentage of
Portfolio
Leased NRSF
 
Annualized
Rent(d)
 
Percentage of
Annualized Rent
0-999
 
447

 
79
%
 
81,819

 
5
%
 
$
33,655,624

 
13
%
1,000-2,499
 
39

 
7
%
 
66,987

 
4
%
 
15,444,873

 
6
%
2,500-4,999
 
27

 
5
%
 
102,141

 
7
%
 
20,661,725

 
8
%
5,000-9,999
 
23

 
4
%
 
162,750

 
11
%
 
51,439,853

 
20
%
10,000+
 
31

 
5
%
 
1,099,879

 
73
%
 
136,187,695

 
53
%
Total
 
567

 
100
%
 
1,513,576

 
100
%
 
$
257,389,770

 
100
%


(a)
Represents all leases in our portfolio, including colocation, office and other leases.
(b)
Represents the number of customers in our portfolio leasing data center, office and other space.
(c)
Represents the total square feet at a facility under lease and that has commenced billing, excluding space held for development or space used by CyrusOne. A customer’s leased NRSF is estimated based on such customer’s direct CSF or office and light-industrial space plus management’s estimate of infrastructure support space, including mechanical, telecommunications and utility rooms, as well as building common areas.
(d)
Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of September 30, 2013, multiplied by 12. For the month of September 2013, customer reimbursements were $22.9 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 October 1, 2011 through September 30, 2013, customer reimbursements under leases with separately metered power constituted between 7.2% and 9.7% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2013 was $274,859,776. Our annualized effective rent was greater than our annualized rent as of September 30, 2013 because our positive straight-line and other adjustments and amortization of deferred revenue exceeded our negative straight-line adjustments due to factors such as the timing of contractual rent escalations and customer prepayments for services.









CyrusOne Inc.
Lease Expirations
As of September 30, 2013
(Unaudited)

 
Year(a)
Number of
Leases
Expiring(b)
 
Total Operating
NRSF Expiring
 
Percentage of
Total NRSF
 
Annualized
Rent(c)
 
Percentage of
Annualized Rent
 
Annualized Rent
at Expiration(d)
 
Percentage of
Annualized Rent
at Expiration
Available
 
 
384,393

 
20
%
 
 
 
 
 
 
 
 
Month-to-Month
216

 
36,552

 
2
%
 
$
8,979,903

 
3
%
 
$
8,979,903

 
3
%
Remainder of 2013
289

 
217,844

 
11
%
 
57,815,166

 
22
%
 
57,886,248

 
20
%
2014
612

 
228,146

 
12
%
 
45,403,980

 
18
%
 
45,455,010

 
16
%
2015
487

 
252,150

 
13
%
 
38,832,786

 
15
%
 
40,535,270

 
15
%
2016
338

 
84,138

 
5
%
 
31,379,039

 
12
%
 
36,536,531

 
13
%
2017
112

 
228,329

 
12
%
 
27,250,450

 
11
%
 
30,982,627

 
11
%
2018
86

 
114,447

 
6
%
 
18,914,460

 
7
%
 
22,343,777

 
8
%
2019
9

 
96,271

 
5
%
 
5,432,091

 
2
%
 
5,849,905

 
2
%
2020
20

 
115,930

 
6
%
 
8,150,441

 
3
%
 
10,384,144

 
4
%
2021
9

 
30,754

 
2
%
 
4,133,641

 
2
%
 
4,577,392

 
2
%
2022
6

 
40,087

 
2
%
 
7,138,173

 
3
%
 
10,406,465

 
4
%
2023 - Thereafter
21

 
68,928

 
4
%
 
3,959,640

 
2
%
 
4,581,453

 
2
%
Total
2,205

 
1,897,969

 
100
%
 
$
257,389,770

 
100
%
 
$
278,518,725

 
100
%



(a)
Leases that were auto-renewed prior to September 30, 2013 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 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.
(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 September 30, 2013, multiplied by 12. For the month of September 2013, customer reimbursements were $22.9 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 October 1, 2011 through September 30, 2013, customer reimbursements under leases with separately metered power constituted between 7.2% and 9.7% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2013 was $274,859,776. Our annualized effective rent was greater than our annualized rent as of September 30, 2013 because our positive straight-line and other adjustments and amortization of deferred revenue exceeded our negative straight-line adjustments due to factors such as the timing of contractual rent escalations and customer prepayments for services.
(d)
Represents the final monthly contractual rent under existing customer leases that had commenced as of September 30, 2013, multiplied by 12.