Exhibit 99.1
CyrusOne Reports Third Quarter 2015 Earnings
Year-over-Year Normalized FFO per Share Growth of 30% and Adjusted EBITDA Growth of 40%
2015 Normalized FFO Guidance Increased to a Range of $2.11 to $2.15 per Share
DALLAS (November 5, 2015) - 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 2015 earnings.
Highlights
• | Third quarter Normalized FFO per share of $0.57 increased 30% over the third quarter of 2014 |
• | Third quarter Adjusted EBITDA of $59.0 million increased 40% over the third quarter of 2014 |
• | Third quarter revenue of $111.2 million increased 31% over the third quarter of 2014 |
• | Leased 29,000 colocation square feet totaling $13 million in annualized GAAP revenue, with utilization increasing slightly to 89% |
• | Added three Fortune 1000 companies as new customers, increasing the total number of Fortune 1000 customers to 169 as of the end of the quarter |
• | Substantially completed the integration of Cervalis |
• | Increased 2015 Normalized FFO per share guidance range to $2.11 to $2.15, with new midpoint up $0.03 from prior guidance midpoint |
“This was another strong quarter for our company driven by the continued exponential growth in data and a secular outsourcing trend which is causing more enterprise companies to outsource more of their mission critical data center requirements to CyrusOne,” said Gary Wojtaszek president and chief executive officer of CyrusOne. “We are also glad to report that we have substantially completed the integration of Cervalis ahead of our initial timeline and believe that we are well positioned for growth in 2016.”
Third Quarter 2015 Financial Results
Normalized Funds From Operations (Normalized FFO)3 was $41.2 million for the third quarter, compared to $28.9 million in the same period in 2014, an increase of 43%. Normalized FFO per diluted common share or common share equivalent4 was $0.57 in the third quarter of 2015, an increase of 30%. Adjusted Funds From Operations (AFFO)5 was $42.8 million for the third quarter, compared to $29.1 million in the same period in 2014, an increase of 47%.
Revenue was $111.2 million for the third quarter, compared to $84.8 million for the same period in 2014, an increase of 31%. The increase in revenue was driven by a 27% increase in leased colocation square feet and additional interconnection services. Net operating income (NOI)1 was $69.0 million for the third quarter, compared to $51.8 million in the same period in 2014, an increase of 33%. Adjusted EBITDA2 was $59.0 million for the third quarter, compared to $42.2 million in the same period in 2014, an increase of 40%. The Adjusted EBITDA margin of 53.1% in the third quarter increased from 49.8% in the same period in 2014.
Leasing Activity
CyrusOne leased approximately 4.8 MW of power, or 29,000 colocation square feet (CSF), in the third quarter. Leases signed in the third quarter represent approximately $1.1 million in monthly recurring rent inclusive of the monthly impact of installation charges, or approximately $13 million in annualized contracted GAAP revenue6 excluding estimates for pass-through power. The Company added three new Fortune 10007 customers in the third quarter, bringing the total to 169 customers in the Fortune 1000 and 929 customers in total as of September 30, 2015. The weighted average lease term of the new leases based on square footage is 57 months. Recurring rent churn8 for the third quarter was 0.7%, compared to 2.9% for the same period in 2014.
3
Portfolio Utilization and Development
As of September 30, 2015, CyrusOne had approximately 1,512,000 CSF across 31 data centers, an increase of approximately 312,000, or 26%, from September 30, 2014. CSF utilization9 as of the end of the third quarter was 89%, up from 88% in the same period in 2014. In the third quarter, the Company commissioned a second data hall at its Northern Virginia facility, adding a total of approximately 37,000 CSF. CyrusOne currently has development projects underway in Austin, Houston, and San Antonio that will add 145,000 CSF and is also constructing a new facility in Phoenix that will add 150,000 NRSF. The Company is also expected to begin construction on the fifth data hall at its Carrollton location in Dallas in the fourth quarter, adding approximately 55,000 CSF.
Balance Sheet and Liquidity
As of September 30, 2015, the Company had $982.7 million of long term debt, cash and cash equivalents of $39.8 million, and $437.9 million available under its unsecured revolving credit facility. Net debt10 was $955.7 million as of September 30, 2015, approximately 29% of the Company's total enterprise value or 4.0x Adjusted EBITDA for the last quarter annualized. Available liquidity11 was $477.7 million as of September 30, 2015.
Dividend and Distribution
On August 5, 2015, the Company announced a dividend and distribution of $0.315 per share of common stock and common stock equivalent for the third quarter of 2015. The dividend and distribution was paid on October 15, 2015, to stockholders of record at the close of business on September 25, 2015.
Additionally, today the Company is announcing a dividend and distribution of $0.315 per share of common stock and common stock equivalent for the fourth quarter of 2015. The dividend and distribution will be paid on January 8, 2016, to stockholders of record at the close of business on December 24, 2015.
Guidance
CyrusOne is increasing its guidance for full year 2015 Normalized FFO per diluted common share or common share equivalent and increasing the lower end of the guidance range for Adjusted EBITDA. The Company is reaffirming its guidance for Revenue and Capital Expenditures.
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.
Category | Prior 2015 Guidance | Revised 2015 Guidance | |
Total Revenue | $398 - $404 million | $398 - $404 million | |
Base Revenue | $355 - $359 million | $355 - $359 million | |
Metered Power Reimbursements | $43 - $45 million | $43 - $45 million | |
Adjusted EBITDA | $209 - $213 million | $210 - $213 million | |
Normalized FFO per diluted common share or common share equivalent* | $2.07 - $2.13 | $2.11 - $2.15 | |
Capital Expenditures | $260 - $275 million | $260 - $275 million | |
Development** | $255 - $265 million | $255 - $265 million | |
Recurring | $5 - $10 million | $5 - $10 million | |
* Combined guidance assumes weighted average diluted common share or common share equivalents for 2015 of approximately 69.5 million.
** Development capital is inclusive of capital used for the acquisition of land for future development.
Upcoming Conferences and Events
• | NAREIT’s REITWorld conference on November 17-19 in Las Vegas, Nevada |
4
Conference Call Details
CyrusOne will host a conference call on November 5, 2015, at 12:00 PM Eastern Time (11:00 AM Central Time) to discuss its results for the third quarter of 2015. A live webcast of the conference call will be available under the “Investor Relations” tab in the “Events and Presentations” section of the Company's website at http://investor.cyrusone.com/events.cfm. The U.S. conference call dial-in number is 1-866-652-5200, and the international dial-in number is 1-412-317-6060. A replay will be available one hour after the conclusion of the earnings call on November 5, 2015, until 9:00 AM Eastern Time (8:00 AM Central Time) on November 16, 2015. 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 10073899.
Safe Harbor
This release and the documents incorporated by reference herein contain forward-looking statements regarding future events and our future results that are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as "expects," "anticipates," "predicts," "projects," "intends," "plans," "believes," "seeks," "estimates," "continues," "endeavors," "strives," "may," variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned these forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially and adversely from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this release and those discussed in other documents we file with the Securities and Exchange Commission (SEC). More information on potential risks and uncertainties is available in our recent filings with the SEC, including CyrusOne's Form 10-K report, Form 10-Q reports, and Form 8-K reports. Actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.
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, Adjusted EBITDA, Net Operating Income, Adjusted Net Operating Income, and Net Debt should not be construed as being more important than comparable GAAP measures. Detailed reconciliations of these non-GAAP financial measures to comparable GAAP financial measures have been included in the tables that accompany this release and are available in the Investor Relations section of www.cyrusone.com.
Management uses FFO, Normalized FFO, Adjusted EBITDA, NOI, Adjusted NOI, and AFFO as supplemental performance measures because they provide performance measures that, when compared year over year, capture trends in occupancy rates, rental rates and operating costs. The Company also believes that, as widely recognized measures of the performance of real estate investment trusts (REITs) and other companies, these measures will be used by investors as a basis to compare its operating performance with that of other companies. Other companies may not calculate these measures in the same manner, and, as presented, they may not be comparable to others. Therefore, FFO, Normalized FFO, NOI, Adjusted NOI, AFFO and Adjusted EBITDA should be considered only as supplements to net income as measures of our performance. FFO, Normalized FFO, NOI, Adjusted NOI, AFFO and Adjusted EBITDA should not be used as measures of liquidity or as indicative of funds available to fund the Company's cash needs, including the ability to make distributions. These measures also should not be used as substitutes for cash flow from operating activities computed in accordance with U.S. GAAP.
1Net Operating Income (NOI) is defined as revenue less property operating expenses. Amortization of deferred leasing costs is presented in depreciation and amortization, which is excluded from NOI. CyrusOne has not historically incurred any tenant improvement costs. Our sales and marketing costs consist of salaries and benefits for our internal sales staff, travel and entertainment, office supplies, marketing and advertising costs. General and administrative costs include salaries and benefits of our senior management and support functions, legal and consulting costs, and other administrative costs. Marketing and advertising costs are not property-specific, rather these costs support our entire portfolio. As a result, we have excluded these marketing and advertising costs from our NOI calculation, consistent with the treatment of general and administrative costs, which also support our entire portfolio. From time to time, there may be non-recurring costs in property operating expenses, and as a result the Company may present Adjusted Net Operating Income (Adjusted NOI) to exclude the impacts of those costs.
2Adjusted EBITDA is defined as net income (loss) as defined by U.S. GAAP before noncontrolling interests plus interest expense, income tax (benefit) expense, depreciation and amortization, non-cash compensation, transaction costs and transaction-related compensation, including acquisition pursuit and integration costs, restructuring costs, severance costs, loss on extinguishment of debt, asset impairments and (gain) loss on disposals, lease exit costs, and other special items. 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.
5
3Normalized Funds From Operations (Normalized FFO) is defined as Funds From Operations (FFO) plus transaction costs, including acquisition pursuit and integration costs, transaction-related compensation, (gain) loss on extinguishment of debt, restructuring costs, severance costs, lease exit costs, legal claim costs, and other special items. FFO is net (loss) income computed in accordance with U.S. GAAP before noncontrolling interests, (gain) loss from sales of real estate improvements, real estate-related depreciation and amortization, amortization of customer relationship intangibles, and real estate and customer relationship intangible impairments. 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. The Company believes its Normalized FFO calculation provides a comparable measure to that used by others in the industry.
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 72,624,898 for the third quarter of 2015.
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.
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.
7Fortune 1000 customers include subsidiaries whose ultimate parent is a Fortune 1000 company or a foreign or private company of equivalent size.
8Recurring rent churn is calculated as any reduction in recurring rent due to customer terminations, service reductions or net pricing decreases as a percentage of rent at the beginning of the period, excluding any impact from metered power reimbursements or other usage-based billing.
9Utilization 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. Management uses utilization rate as a measure of CSF leased.
10Net debt provides a useful measure of liquidity and financial health. The Company defines Net Debt as long-term debt and capital lease obligations, offset by cash, cash equivalents, and temporary cash investments.
11Liquidity is calculated as cash, cash equivalents, and temporary cash investments on hand, plus the undrawn capacity on CyrusOne's revolving credit facility.
About CyrusOne
CyrusOne (NASDAQ: CONE) 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 925 customers, including nine of the Fortune 20 and 169 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 more than 30 data centers worldwide.
# # #
6
Investor Relations:
Michael Schafer
972-350-0060
investorrelations@cyrusone.com
7
CyrusOne Inc.
Condensed Consolidated Statements of Operations
(Dollars in millions, except per share amounts)
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
Change | Change | |||||||||||||||||||||||||||||
2015 | 2014 | $ | % | 2015 | 2014 | $ | % | |||||||||||||||||||||||
Revenue | $ | 111.2 | $ | 84.8 | $ | 26.4 | 31 | % | $ | 286.0 | $ | 244.0 | $ | 42.0 | 17 | % | ||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||||
Property operating expenses | 42.2 | 33.0 | 9.2 | 28 | % | 107.3 | 92.5 | 14.8 | 16 | % | ||||||||||||||||||||
Sales and marketing | 3.2 | 3.2 | — | — | % | 8.9 | 9.7 | (0.8 | ) | (8 | )% | |||||||||||||||||||
General and administrative | 12.5 | 9.0 | 3.5 | 39 | % | 31.5 | 24.7 | 6.8 | 28 | % | ||||||||||||||||||||
Depreciation and amortization | 39.1 | 30.0 | 9.1 | 30 | % | 101.6 | 87.4 | 14.2 | 16 | % | ||||||||||||||||||||
Transaction and acquisition integration costs | 1.8 | — | 1.8 | n/m | 11.5 | 0.9 | 10.6 | n/m | ||||||||||||||||||||||
Asset impairments and loss on disposal of assets | 4.9 | — | 4.9 | n/m | 13.5 | — | 13.5 | n/m | ||||||||||||||||||||||
Total costs and expenses | 103.7 | 75.2 | 28.5 | 38 | % | 274.3 | 215.2 | 59.1 | 27 | % | ||||||||||||||||||||
Operating income | 7.5 | 9.6 | (2.1 | ) | (22 | )% | 11.7 | 28.8 | (17.1 | ) | (59 | )% | ||||||||||||||||||
Interest expense | 12.1 | 9.0 | 3.1 | 34 | % | 29.2 | 30.4 | (1.2 | ) | (4 | )% | |||||||||||||||||||
Net (loss) income before income taxes | (4.6 | ) | 0.6 | (5.2 | ) | n/m | (17.5 | ) | (1.6 | ) | (15.9 | ) | n/m | |||||||||||||||||
Income tax expense | (0.7 | ) | (0.4 | ) | (0.3 | ) | 75 | % | (1.5 | ) | (1.1 | ) | (0.4 | ) | 36 | % | ||||||||||||||
Net (loss) income | (5.3 | ) | 0.2 | (5.5 | ) | n/m | (19.0 | ) | (2.7 | ) | (16.3 | ) | n/m | |||||||||||||||||
Noncontrolling interest in net (loss) income | (0.7 | ) | 0.1 | (0.8 | ) | n/m | (4.6 | ) | (1.9 | ) | (2.7 | ) | n/m | |||||||||||||||||
Net (loss) income attributed to common stockholders | $ | (4.6 | ) | $ | 0.1 | $ | (4.7 | ) | n/m | $ | (14.4 | ) | $ | (0.8 | ) | $ | (13.6 | ) | n/m | |||||||||||
Loss per common share - basic and diluted | $ | (0.08 | ) | $ | — | $ | (0.08 | ) | n/m | $ | (0.30 | ) | $ | (0.06 | ) | $ | (0.24 | ) | n/m | |||||||||||
8
CyrusOne Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
(Unaudited)
September 30, | December 31, | Change | |||||||||||||
2015 | 2014 | $ | % | ||||||||||||
Assets | |||||||||||||||
Investment in real estate: | |||||||||||||||
Land | $ | 93.0 | $ | 89.7 | $ | 3.3 | 4 | % | |||||||
Buildings and improvements | 897.7 | 812.6 | 85.1 | 10 | % | ||||||||||
Equipment | 555.6 | 349.1 | 206.5 | 59 | % | ||||||||||
Construction in progress | 187.1 | 127.0 | 60.1 | 47 | % | ||||||||||
Subtotal | 1,733.4 | 1,378.4 | 355.0 | 26 | % | ||||||||||
Accumulated depreciation | (404.4 | ) | (327.0 | ) | (77.4 | ) | 24 | % | |||||||
Net investment in real estate | 1,329.0 | 1,051.4 | 277.6 | 26 | % | ||||||||||
Cash and cash equivalents | 39.8 | 36.5 | 3.3 | 9 | % | ||||||||||
Rent and other receivables | 74.5 | 60.9 | 13.6 | 22 | % | ||||||||||
Restricted cash | 7.1 | — | 7.1 | n/m | |||||||||||
Goodwill | 453.4 | 276.2 | 177.2 | 64 | % | ||||||||||
Intangible assets, net | 175.7 | 68.9 | 106.8 | n/m | |||||||||||
Due from affiliates | 1.3 | 0.8 | 0.5 | 63 | % | ||||||||||
Other assets | 100.8 | 91.8 | 9.0 | 10 | % | ||||||||||
Total assets | $ | 2,181.6 | $ | 1,586.5 | $ | 595.1 | 38 | % | |||||||
Liabilities and Equity | |||||||||||||||
Accounts payable and accrued expenses | $ | 116.3 | $ | 69.9 | $ | 46.4 | 66 | % | |||||||
Deferred revenue | 74.1 | 65.7 | 8.4 | 13 | % | ||||||||||
Due to affiliates | 2.7 | 7.3 | (4.6 | ) | n/m | ||||||||||
Capital lease obligations | 12.8 | 13.4 | (0.6 | ) | (4 | )% | |||||||||
Long-term debt | 982.7 | 659.8 | 322.9 | 49 | % | ||||||||||
Other financing arrangements | 151.9 | 53.4 | 98.5 | n/m | |||||||||||
Total liabilities | 1,340.5 | 869.5 | 471.0 | 54 | % | ||||||||||
Shareholders’ 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 66,245,906 and 38,651,517 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | 0.6 | 0.4 | 0.2 | 50 | % | ||||||||||
Additional paid in capital | 912.3 | 516.5 | 395.8 | 77 | % | ||||||||||
Accumulated deficit | (124.3 | ) | (55.9 | ) | (68.4 | ) | n/m | ||||||||
Accumulated other comprehensive loss | (0.7 | ) | (0.3 | ) | (0.4 | ) | n/m | ||||||||
Total shareholders’ equity | 787.9 | 460.7 | 327.2 | 71 | % | ||||||||||
Noncontrolling interest | 53.2 | 256.3 | (203.1 | ) | (79 | )% | |||||||||
Total equity | 841.1 | 717.0 | 124.1 | 17 | % | ||||||||||
Total liabilities and shareholders’ equity | $ | 2,181.6 | $ | 1,586.5 | $ | 595.1 | 38 | % | |||||||
9
CyrusOne Inc.
Condensed Consolidated 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, | |||||||||||||||
2015 | 2015 | 2015 | 2014 | 2014 | ||||||||||||||||
Revenue: | ||||||||||||||||||||
Base revenue | $ | 98.7 | $ | 78.8 | $ | 75.9 | $ | 75.4 | $ | 73.9 | ||||||||||
Metered Power reimbursements | 12.5 | 10.3 | 9.8 | 11.5 | 10.9 | |||||||||||||||
Total revenue | 111.2 | 89.1 | 85.7 | 86.9 | 84.8 | |||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Property operating expenses | 42.2 | 32.8 | 32.3 | 32.0 | 33.0 | |||||||||||||||
Sales and marketing | 3.2 | 2.8 | 2.9 | 3.1 | 3.2 | |||||||||||||||
General and administrative | 12.5 | 9.9 | 9.1 | 9.9 | 9.0 | |||||||||||||||
Depreciation and amortization | 39.1 | 31.4 | 31.1 | 30.6 | 30.0 | |||||||||||||||
Transaction costs and acquisition integration costs | 1.8 | 9.6 | 0.1 | 0.1 | — | |||||||||||||||
Asset impairments and loss on disposal of assets | 4.9 | — | 8.6 | — | — | |||||||||||||||
Total costs and expenses | 103.7 | 86.5 | 84.1 | 75.7 | 75.2 | |||||||||||||||
Operating income | $ | 7.5 | $ | 2.6 | $ | 1.6 | $ | 11.2 | $ | 9.6 | ||||||||||
Interest expense | 12.1 | 8.7 | 8.4 | 9.1 | 9.0 | |||||||||||||||
Loss on extinguishment of debt | — | — | — | 13.6 | — | |||||||||||||||
Net (loss) income before income taxes | (4.6 | ) | (6.1 | ) | (6.8 | ) | (11.5 | ) | 0.6 | |||||||||||
Income tax expense | (0.7 | ) | (0.4 | ) | (0.4 | ) | (0.3 | ) | (0.4 | ) | ||||||||||
Net (loss) income from continuing operations | (5.3 | ) | (6.5 | ) | (7.2 | ) | (11.8 | ) | 0.2 | |||||||||||
Noncontrolling interest in net (loss) income | (0.7 | ) | (1.0 | ) | (2.9 | ) | (4.8 | ) | 0.1 | |||||||||||
Net (loss) income attributed to common stockholders | $ | (4.6 | ) | $ | (5.5 | ) | $ | (4.3 | ) | $ | (7.0 | ) | $ | 0.1 | ||||||
Loss per common share - basic and diluted | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.12 | ) | $ | (0.19 | ) | $ | — | ||||||
10
CyrusOne Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
(Unaudited)
September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | ||||||||||||||||
Assets | ||||||||||||||||||||
Investment in real estate: | ||||||||||||||||||||
Land | $ | 93.0 | $ | 93.0 | $ | 93.0 | $ | 89.7 | $ | 89.7 | ||||||||||
Buildings and improvements | 897.7 | 824.2 | 820.8 | 812.6 | 796.6 | |||||||||||||||
Equipment | 555.6 | 423.4 | 382.7 | 349.1 | 312.5 | |||||||||||||||
Construction in progress | 187.1 | 125.8 | 121.0 | 127.0 | 120.9 | |||||||||||||||
Subtotal | 1,733.4 | 1,466.4 | 1,417.5 | 1,378.4 | 1,319.7 | |||||||||||||||
Accumulated depreciation | (404.4 | ) | (375.4 | ) | (350.1 | ) | (327.0 | ) | (303.5 | ) | ||||||||||
Net investment in real estate | 1,329.0 | 1,091.0 | 1,067.4 | 1,051.4 | 1,016.2 | |||||||||||||||
Cash and cash equivalents | 39.8 | 413.5 | 26.0 | 36.5 | 30.4 | |||||||||||||||
Rent and other receivables | 74.5 | 56.3 | 53.9 | 60.9 | 59.1 | |||||||||||||||
Restricted cash | 7.1 | — | — | — | — | |||||||||||||||
Goodwill | 453.4 | 276.2 | 276.2 | 276.2 | 276.2 | |||||||||||||||
Intangible assets, net | 175.7 | 61.6 | 65.3 | 68.9 | 73.2 | |||||||||||||||
Due from affiliates | 1.3 | 1.7 | 1.4 | 0.8 | 1.3 | |||||||||||||||
Other assets | 100.8 | 91.4 | 86.4 | 91.8 | 81.6 | |||||||||||||||
Total assets | $ | 2,181.6 | $ | 1,991.7 | $ | 1,576.6 | $ | 1,586.5 | $ | 1,538.0 | ||||||||||
Liabilities and Equity | ||||||||||||||||||||
Accounts payable and accrued expenses | $ | 116.3 | $ | 90.0 | $ | 67.1 | $ | 69.9 | $ | 100.2 | ||||||||||
Deferred revenue | 74.1 | 66.5 | 65.5 | 65.7 | 66.1 | |||||||||||||||
Due to affiliates | 2.7 | 174.9 | 9.1 | 7.3 | 7.4 | |||||||||||||||
Capital lease obligations | 12.8 | 12.1 | 12.6 | 13.4 | 14.2 | |||||||||||||||
Long-term debt | 982.7 | 729.8 | 679.8 | 659.8 | 555.0 | |||||||||||||||
Other financing arrangements | 151.9 | 52.8 | 51.3 | 53.4 | 55.1 | |||||||||||||||
Total liabilities | 1,340.5 | 1,126.1 | 885.4 | 869.5 | 798.0 | |||||||||||||||
Shareholders’ 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 | 0.6 | 0.6 | 0.4 | 0.4 | 0.4 | |||||||||||||||
Additional paid in capital | 912.3 | 908.3 | 518.9 | 516.5 | 513.7 | |||||||||||||||
Accumulated deficit | (124.3 | ) | (98.9 | ) | (72.5 | ) | (55.9 | ) | (40.8 | ) | ||||||||||
Accumulated other comprehensive loss | (0.7 | ) | (0.3 | ) | (0.6 | ) | (0.3 | ) | — | |||||||||||
Total shareholders’ equity | 787.9 | 809.7 | 446.2 | 460.7 | 473.3 | |||||||||||||||
Noncontrolling interest | 53.2 | 55.9 | 245.0 | 256.3 | 266.7 | |||||||||||||||
Total shareholders' equity | 841.1 | 865.6 | 691.2 | 717.0 | 740.0 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,181.6 | $ | 1,991.7 | $ | 1,576.6 | $ | 1,586.5 | $ | 1,538.0 | ||||||||||
11
CyrusOne Inc.
Condensed Consolidated Statements of Cash Flow
(Dollars in millions)
(Unaudited)
Nine Months Ended September 30, 2015 | Nine Months Ended September 30, 2014 | Three Months Ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (19.0 | ) | $ | (2.7 | ) | $ | (5.3 | ) | $ | 0.2 | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 101.6 | 87.4 | 39.1 | 30.0 | ||||||||||||
Noncash interest expense | 2.3 | 2.7 | 0.9 | 0.9 | ||||||||||||
Stock-based compensation expense | 10.5 | 7.6 | 4.3 | 2.6 | ||||||||||||
Provision for bad debt write off | 0.3 | 0.9 | 0.1 | 0.3 | ||||||||||||
Asset impairments and loss on disposal | 13.5 | — | 4.9 | — | ||||||||||||
Change in operating assets and liabilities: | ||||||||||||||||
Rent receivables and other assets | (16.9 | ) | (31.3 | ) | (9.1 | ) | 0.1 | |||||||||
Accounts payable and accrued expenses | 9.9 | 14.1 | 4.5 | 11.6 | ||||||||||||
Deferred revenues | 0.8 | 10.2 | — | (0.6 | ) | |||||||||||
Due to affiliates | (1.5 | ) | (0.6 | ) | 0.4 | (0.8 | ) | |||||||||
Net cash provided by operating activities | 101.5 | 88.3 | 39.8 | 44.3 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures – acquisitions of real estate | (17.3 | ) | — | — | — | |||||||||||
Capital expenditures – other development | (140.9 | ) | (194.9 | ) | (66.7 | ) | (78.1 | ) | ||||||||
Business acquisitions, net of cash acquired | (398.4 | ) | — | (398.4 | ) | — | ||||||||||
Net cash used in investing activities | (556.6 | ) | (194.9 | ) | (465.1 | ) | (78.1 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Issuance of common stock | 799.3 | 355.9 | — | — | ||||||||||||
Stock issuance costs | (0.8 | ) | (1.3 | ) | (0.2 | ) | (0.8 | ) | ||||||||
Acquisition of operating partnership units | (596.4 | ) | (355.9 | ) | (170.4 | ) | — | |||||||||
Dividends paid | (58.3 | ) | (37.4 | ) | (24.5 | ) | (13.4 | ) | ||||||||
Borrowings from credit facility | 220.0 | 30.0 | 150.0 | 30.0 | ||||||||||||
Proceeds from issuance of debt | 103.8 | — | 103.8 | — | ||||||||||||
Payments on capital leases and other financing arrangements | (3.8 | ) | (3.1 | ) | (1.7 | ) | (0.9 | ) | ||||||||
Debt issuance costs | (5.4 | ) | — | (5.4 | ) | — | ||||||||||
Net cash provided by (used in) financing activities | 458.4 | (11.8 | ) | 51.6 | 14.9 | |||||||||||
Net increase (decrease) in cash and cash equivalents | 3.3 | (118.4 | ) | (373.7 | ) | (18.9 | ) | |||||||||
Cash and cash equivalents at beginning of period | 36.5 | 148.8 | 413.5 | 49.3 | ||||||||||||
Cash and cash equivalents at end of period | $ | 39.8 | $ | 30.4 | $ | 39.8 | $ | 30.4 | ||||||||
Nine Months Ended September 30, 2015 | Nine Months Ended September 30, 2014 | Three Months Ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||
Supplemental disclosures of cash flow information | ||||||||||||||||
Cash paid for interest | $ | 21.4 | $ | 22.4 | $ | 2.9 | $ | 1.9 | ||||||||
Cash paid for income taxes | 2.5 | 0.4 | 0.6 | — | ||||||||||||
Supplemental disclosures of noncash investing and financing activities | ||||||||||||||||
Capitalized interest | 4.2 | 3.0 | 1.7 | 2.1 | ||||||||||||
Acquisition of property in accounts payable and other liabilities | 37.9 | 50.1 | 37.9 | 5.1 | ||||||||||||
Dividends declared | 23.5 | 14.1 | 23.5 | 14.1 | ||||||||||||
Debt issuance costs | 0.3 | — | 0.3 | — | ||||||||||||
12
CyrusOne Inc.
Net Operating Income and Reconciliation of Net Income (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, | ||||||||||||||||||||||||||||
2015 | 2014 | $ | % | 2015 | 2015 | 2015 | 2014 | 2014 | ||||||||||||||||||||||||||
Net Operating Income | ||||||||||||||||||||||||||||||||||
Revenue | $ | 286.0 | $ | 244.0 | $ | 42.0 | 17% | $ | 111.2 | $ | 89.1 | $ | 85.7 | $ | 86.9 | $ | 84.8 | |||||||||||||||||
Property operating expenses | 107.3 | 92.5 | 14.8 | 16% | 42.2 | 32.8 | 32.3 | 32.0 | 33.0 | |||||||||||||||||||||||||
Net Operating Income (NOI) | 178.7 | 151.5 | 27.2 | 18% | 69.0 | 56.3 | 53.4 | 54.9 | 51.8 | |||||||||||||||||||||||||
Add Back: Lease exit costs | 1.1 | — | 1.1 | n/m | 0.4 | — | 0.7 | — | — | |||||||||||||||||||||||||
Adjusted Net Operating Income (Adjusted NOI) | $ | 179.8 | $ | 151.5 | $ | 28.3 | 19% | $ | 69.4 | $ | 56.3 | $ | 54.1 | $ | 54.9 | $ | 51.8 | |||||||||||||||||
Adjusted NOI as a % of Revenue | 62.9 | % | 62.1 | % | 62.4 | % | 63.2 | % | 63.1 | % | 63.2 | % | 61.1 | % | ||||||||||||||||||||
Reconciliation of Net (Loss) Income to Adjusted EBITDA: | ||||||||||||||||||||||||||||||||||
Net (loss) income | (19.0 | ) | $ | (2.7 | ) | $ | (16.3 | ) | n/m | $ | (5.3 | ) | $ | (6.5 | ) | $ | (7.2 | ) | $ | (11.8 | ) | $ | 0.2 | |||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||
Interest expense | 29.2 | 30.4 | (1.2 | ) | (4)% | 12.1 | 8.7 | 8.4 | 9.1 | 9.0 | ||||||||||||||||||||||||
Income tax expense | 1.5 | 1.1 | 0.4 | 36% | 0.7 | 0.4 | 0.4 | 0.3 | 0.4 | |||||||||||||||||||||||||
Depreciation and amortization | 101.6 | 87.4 | 14.2 | 16% | 39.1 | 31.4 | 31.1 | 30.6 | 30.0 | |||||||||||||||||||||||||
Transaction and acquisition integration costs | 11.5 | 0.9 | 10.6 | n/m | 1.8 | 9.6 | 0.1 | 0.1 | — | |||||||||||||||||||||||||
Legal claim costs | 0.3 | — | 0.3 | n/m | — | 0.3 | — | — | — | |||||||||||||||||||||||||
Stock-based compensation | 9.6 | 7.6 | 2.0 | 26% | 3.4 | 3.2 | 3.0 | 2.7 | 2.6 | |||||||||||||||||||||||||
Severance | 1.9 | — | 1.9 | n/m | 1.9 | — | — | — | — | |||||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | n/m | — | — | — | 13.6 | — | |||||||||||||||||||||||||
Lease exit costs | 1.1 | — | 1.1 | n/m | 0.4 | — | 0.7 | — | — | |||||||||||||||||||||||||
Asset impairments and loss on disposals | 13.5 | — | 13.5 | n/m | 4.9 | — | 8.6 | — | — | |||||||||||||||||||||||||
Adjusted EBITDA | $ | 151.2 | $ | 124.7 | $ | 26.5 | 21% | $ | 59.0 | $ | 47.1 | $ | 45.1 | $ | 44.6 | $ | 42.2 | |||||||||||||||||
Adjusted EBITDA as a % of Revenue | 52.9 | % | 51.1 | % | 53.1 | % | 52.9 | % | 52.6 | % | 51.3 | % | 49.8 | % | ||||||||||||||||||||
13
CyrusOne Inc.
Reconciliation of Net Income (Loss) to FFO, Normalized FFO, and AFFO
(Dollars in millions)
(Unaudited)
Nine Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||
September 30, | Change | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||
2015 | 2014 | $ | % | 2015 | 2015 | 2015 | 2014 | 2014 | |||||||||||||||||||||||||||
Reconciliation of Net (Loss) Income to FFO and Normalized FFO: | |||||||||||||||||||||||||||||||||||
Net (loss) income | $ | (19.0 | ) | $ | (2.7 | ) | $ | (16.3 | ) | n/m | $ | (5.3 | ) | $ | (6.5 | ) | $ | (7.2 | ) | $ | (11.8 | ) | $ | 0.2 | |||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||
Real estate depreciation and amortization | 84.2 | 70.8 | 13.4 | 19 | % | 31.9 | 26.3 | 26.0 | 25.1 | 24.5 | |||||||||||||||||||||||||
Asset impairments and loss on disposal | 13.5 | — | 13.5 | n/m | 4.9 | — | 8.6 | — | — | ||||||||||||||||||||||||||
Funds from Operations (FFO) | $ | 78.7 | $ | 68.1 | $ | 10.6 | 16 | % | $ | 31.5 | $ | 19.8 | $ | 27.4 | $ | 13.3 | $ | 24.7 | |||||||||||||||||
Loss on extinguishment of debt | — | — | — | n/m | — | — | — | 13.6 | — | ||||||||||||||||||||||||||
Amortization of customer relationship intangibles | 12.9 | 12.7 | 0.2 | 2 | % | 5.6 | 3.7 | 3.6 | 4.2 | 4.2 | |||||||||||||||||||||||||
Transaction and acquisition integration costs | 11.6 | 0.9 | 10.7 | n/m | 1.9 | 9.6 | 0.1 | 0.1 | — | ||||||||||||||||||||||||||
Severance | 1.9 | — | 1.9 | n/m | 1.9 | — | — | — | — | ||||||||||||||||||||||||||
Legal claim costs | 0.3 | — | 0.3 | n/m | — | 0.3 | — | — | — | ||||||||||||||||||||||||||
Lease exit costs | 1.1 | — | 1.1 | n/m | 0.3 | — | 0.8 | — | — | ||||||||||||||||||||||||||
Normalized Funds from Operations (Normalized FFO) | $ | 106.5 | $ | 81.7 | $ | 24.8 | 30 | % | $ | 41.2 | $ | 33.4 | $ | 31.9 | $ | 31.2 | $ | 28.9 | |||||||||||||||||
Normalized FFO per diluted common share or common share equivalent | $ | 1.57 | $ | 1.25 | $ | 0.32 | 26 | % | $ | 0.57 | $ | 0.50 | $ | 0.49 | $ | 0.48 | $ | 0.44 | |||||||||||||||||
Weighted Average diluted common share and common share equivalent outstanding | 67.9 | 65.3 | 2.6 | 4 | % | 72.6 | 66.0 | 65.5 | 65.3 | 65.3 | |||||||||||||||||||||||||
Reconciliation of Normalized FFO to AFFO: | |||||||||||||||||||||||||||||||||||
Normalized FFO | $ | 106.5 | $ | 81.7 | $ | 24.8 | 30 | % | $ | 41.2 | $ | 33.4 | $ | 31.9 | $ | 31.2 | $ | 28.9 | |||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||
Amortization of deferred financing costs | 2.3 | 2.7 | (0.4 | ) | (15 | )% | 0.9 | 0.7 | 0.7 | 0.7 | 0.9 | ||||||||||||||||||||||||
Stock-based compensation | 9.6 | 7.6 | 2.0 | 26 | % | 3.5 | 3.1 | 3.0 | 2.7 | 2.6 | |||||||||||||||||||||||||
Non-real estate depreciation and amortization | 4.5 | 3.8 | 0.7 | 18 | % | 1.6 | 1.4 | 1.5 | 1.4 | 1.2 | |||||||||||||||||||||||||
Deferred revenue and straight line rent adjustments | (3.3 | ) | (8.2 | ) | 4.9 | (60 | )% | (1.6 | ) | (0.3 | ) | (1.4 | ) | (2.3 | ) | (1.5 | ) | ||||||||||||||||||
Leasing commissions | (3.6 | ) | (2.9 | ) | (0.7 | ) | 24 | % | (1.6 | ) | (1.5 | ) | (0.5 | ) | (2.9 | ) | (0.9 | ) | |||||||||||||||||
Recurring capital expenditures | (1.7 | ) | (2.8 | ) | 1.1 | (39 | )% | (1.2 | ) | (0.3 | ) | (0.2 | ) | (1.0 | ) | (2.1 | ) | ||||||||||||||||||
Adjusted Funds from Operations (AFFO) | $ | 114.3 | $ | 81.9 | $ | 32.4 | 40 | % | $ | 42.8 | $ | 36.5 | $ | 35.0 | $ | 29.8 | $ | 29.1 | |||||||||||||||||
14
CyrusOne Inc.
Market Capitalization Summary and Reconciliation of Net Debt
(Unaudited)
Market Capitalization
Shares or Equivalents Outstanding | Market Price as of September 30, 2015 | Market Value Equivalents (in millions) | |||||||||
Common shares | 66,245,906 | $ | 32.66 | $ | 2,163.6 | ||||||
Operating Partnership units | 6,346,835 | $ | 32.66 | 207.3 | |||||||
Net Debt | 955.7 | ||||||||||
Total Enterprise Value (TEV) | $ | 3,326.6 | |||||||||
Net Debt as a % of TEV | 28.7 | % | |||||||||
Net Debt to LQA Adjusted EBITDA | 4.0x | ||||||||||
Reconciliation of Net Debt
(dollars in millions) | September 30, | December 31, | ||||||
2015 | 2014 | |||||||
Long-term debt | $ | 982.7 | $ | 659.8 | ||||
Capital lease obligations | 12.8 | 13.4 | ||||||
Less: | ||||||||
Cash and cash equivalents | (39.8 | ) | (36.5 | ) | ||||
Net Debt | $ | 955.7 | $ | 636.7 | ||||
15
CyrusOne Inc.
Colocation Square Footage (CSF) and Utilization
(Unaudited)
As of September 30, 2015 | As of December 31, 2014 | As of September 30, 2014 | ||||||||||||||||
Market | Colocation Space (CSF)(a) | CSF Utilized(b) | Colocation Space (CSF)(a) | CSF Utilized(b) | Colocation Space (CSF)(a) | CSF Utilized(b) | ||||||||||||
Cincinnati | 419,589 | 91 | % | 420,223 | 90 | % | 419,301 | 89 | % | |||||||||
Dallas | 350,946 | 88 | % | 294,969 | 86 | % | 294,873 | 85 | % | |||||||||
Houston | 255,094 | 87 | % | 255,094 | 85 | % | 268,094 | 89 | % | |||||||||
Phoenix | 149,620 | 100 | % | 114,026 | 100 | % | 77,528 | 99 | % | |||||||||
New York Metro | 121,434 | 87 | % | — | n/a | — | n/a | |||||||||||
Northern Virginia | 74,653 | 69 | % | — | n/a | — | n/a | |||||||||||
Austin | 59,995 | 99 | % | 59,995 | 87 | % | 59,995 | 76 | % | |||||||||
San Antonio | 43,843 | 100 | % | 43,843 | 100 | % | 43,843 | 100 | % | |||||||||
Chicago | 23,298 | 53 | % | 23,298 | 58 | % | 23,298 | 56 | % | |||||||||
International | 13,200 | 80 | % | 13,200 | 80 | % | 13,200 | 80 | % | |||||||||
Total Footprint | 1,511,672 | 89 | % | 1,224,648 | 88 | % | 1,200,132 | 88 | % | |||||||||
(a) | CSF represents the NRSF at an operating facility that is currently leased or readily available for lease as colocation space, where customers locate their servers and other IT equipment. |
(b) | Utilization is calculated by dividing CSF under signed leases for colocation space (whether or not the lease has commenced billing) by total CSF. |
16
CyrusOne Inc.
2015 Guidance
Category | Prior 2015 Guidance | Revised 2015 Guidance | |
Total Revenue | $398 - $404 million | $398 - $404 million | |
Base Revenue | $355 - $359 million | $355 - $359 million | |
Metered Power Reimbursements | $43 - $45 million | $43 - $45 million | |
Adjusted EBITDA | $209 - $213 million | $210 - $213 million | |
Normalized FFO per diluted common share or common share equivalent* | $2.07 - $2.13 | $2.11 - $2.15 | |
Capital Expenditures | $260 - $275 million | $260 - $275 million | |
Development** | $255 - $265 million | $255 - $265 million | |
Recurring | $5 - $10 million | $5 - $10 million | |
* | Combined guidance assumes weighted average diluted common share or common share equivalents for 2015 of approximately 69.5 million. | |
** | Development capital is inclusive of capital used for the acquisition of land for future development | |
17
CyrusOne Inc.
Data Center Portfolio
As of September 30, 2015
(Unaudited)
Operating Net Rentable Square Feet (NRSF)(a) | Powered Shell Available for Future Development (NRSF)(j) | Available Critical Load Capacity (MW)(k) | ||||||||||||||||||||||||||||||
Facilities | Metro Area | Annualized Rent(b) | Colocation Space (CSF)(c) | CSF Leased(d) | CSF Utilized(e) | Office & Other(f) | Office & Other Leased (g) | Supporting Infrastructure(h) | Total(i) | |||||||||||||||||||||||
Westway Park Blvd., Houston, TX (Houston West 1) | Houston | $ | 48,358,121 | 112,133 | 96 | % | 96 | % | 10,563 | 98 | % | 36,756 | 159,452 | 3,000 | 28 | |||||||||||||||||
West Seventh St., Cincinnati, OH (7th Street)*** | Cincinnati | 39,003,161 | 212,030 | 93 | % | 94 | % | 5,744 | 100 | % | 171,156 | 388,930 | 37,000 | 13 | ||||||||||||||||||
S. State Highway 121 Business Lewisville, TX (Lewisville)* | Dallas | 37,165,050 | 108,687 | 96 | % | 100 | % | 11,374 | 97 | % | 59,345 | 179,406 | — | 18 | ||||||||||||||||||
W. Frankford, Carrollton, TX (Carrollton) | Dallas | 34,615,470 | 226,604 | 79 | % | 82 | % | 29,420 | 94 | % | 89,107 | 345,131 | 199,000 | 24 | ||||||||||||||||||
Madison Road (Totowa)** | New York | 28,842,869 | 51,242 | 84 | % | 84 | % | 22,477 | 100 | % | 58,964 | 132,683 | — | 6 | ||||||||||||||||||
Southwest Fwy., Houston, TX (Galleria) | Houston | 26,462,397 | 63,469 | 75 | % | 76 | % | 23,259 | 51 | % | 24,927 | 111,655 | — | 14 | ||||||||||||||||||
Myer Conners Rd (Wappingers Falls)** | New York | 25,672,838 | 37,000 | 97 | % | 97 | % | 12,485 | 95 | % | 22,087 | 71,572 | — | 3 | ||||||||||||||||||
South Ellis Street Chandler, AZ (Phoenix 1) | Phoenix | 22,982,062 | 77,504 | 100 | % | 100 | % | 34,501 | 11 | % | 38,697 | 150,702 | 31,000 | 27 | ||||||||||||||||||
Kingsview Dr., Lebanon, OH (Lebanon) | Cincinnati | 22,337,333 | 65,303 | 86 | % | 87 | % | 44,886 | 72 | % | 52,950 | 163,139 | 65,000 | 14 | ||||||||||||||||||
Westover Hills Blvd, San Antonio, TX (San Antonio 1) | San Antonio | 19,410,208 | 43,843 | 100 | % | 100 | % | 5,989 | 83 | % | 45,606 | 95,438 | 11,000 | 12 | ||||||||||||||||||
Westway Park Blvd., Houston, TX (Houston West 2) | Houston | 16,625,900 | 79,492 | 79 | % | 82 | % | 3,355 | 62 | % | 55,018 | 137,865 | 12,000 | 12 | ||||||||||||||||||
Industrial Rd., Florence, KY (Florence) | Cincinnati | 14,946,370 | 52,698 | 100 | % | 100 | % | 46,848 | 87 | % | 40,374 | 139,920 | — | 9 | ||||||||||||||||||
Metropolis Dr., Austin, TX (Austin 2) | Austin | 12,983,625 | 43,772 | 93 | % | 100 | % | 1,821 | 100 | % | 22,430 | 68,023 | — | 5 | ||||||||||||||||||
Riverbend Drive South (Stamford)** | New York | 12,919,725 | 20,000 | 92 | % | 92 | % | — | — | % | 8,484 | 28,484 | — | 2 | ||||||||||||||||||
South Ellis Street Chandler, AZ (Phoenix 2) | Phoenix | 10,903,428 | 72,116 | 100 | % | 100 | % | 5,618 | 38 | % | 25,516 | 103,250 | 4,000 | 12 | ||||||||||||||||||
Knightsbridge Dr., Hamilton, OH (Hamilton)* | Cincinnati | 9,536,675 | 46,565 | 77 | % | 79 | % | 1,077 | 100 | % | 35,336 | 82,978 | — | 10 | ||||||||||||||||||
Parkway Dr., Mason, OH (Mason) | Cincinnati | 5,803,912 | 34,072 | 100 | % | 100 | % | 26,458 | 98 | % | 17,193 | 77,723 | — | 4 | ||||||||||||||||||
E. Ben White Blvd., Austin, TX (Austin 1) | Austin | 5,765,200 | 16,223 | 87 | % | 87 | % | 21,476 | 100 | % | 7,517 | 45,216 | — | 2 | ||||||||||||||||||
Midway Rd., Carrollton, TX (Midway)** | Dallas | 5,408,662 | 8,390 | 100 | % | 100 | % | — | — | % | — | 8,390 | — | 1 | ||||||||||||||||||
Kestral Way (London)** | London | 4,992,511 | 10,000 | 99 | % | 99 | % | — | — | % | 514 | 10,514 | — | 1 | ||||||||||||||||||
Ridgetop Circle, Sterling, VA (Northern Virginia) | Sterling | 4,946,915 | 74,653 | 47 | % | 69 | % | 1,901 | 100 | % | 52,605 | 129,159 | 3,000 | 12 | ||||||||||||||||||
Norden Place (Norwalk)** | New York | 3,135,624 | 13,192 | 67 | % | 67 | % | 4,085 | 72 | % | 40,610 | 57,887 | 87,000 | 2 | ||||||||||||||||||
Marsh Lane, Carrollton, TX (Marsh Ln)** | Dallas | 2,387,635 | 4,245 | 100 | % | 100 | % | — | — | % | — | 4,245 | — | 1 | ||||||||||||||||||
Springer St., Lombard, IL (Lombard) | Chicago | 2,307,326 | 13,516 | 71 | % | 71 | % | 4,115 | 100 | % | 12,230 | 29,861 | 29,000 | 3 | ||||||||||||||||||
Omega Drive (Stamford)** | New York | 1,493,004 | — | — | % | — | % | 18,513 | 87 | % | 2,829 | 21,342 | — | — | ||||||||||||||||||
Bryan St., Dallas, TX (Bryan St)** | Dallas | 934,154 | 3,020 | 51 | % | 51 | % | — | — | % | — | 3,020 | — | 1 | ||||||||||||||||||
McAuley Place, Blue Ash, OH (Blue Ash)* | Cincinnati | 551,116 | 6,193 | 39 | % | 39 | % | 6,950 | 100 | % | 2,166 | 15,309 | — | 1 | ||||||||||||||||||
E. Monroe St., South Bend, IN (Monroe St.) | South Bend | 475,740 | 6,350 | 22 | % | 22 | % | — | — | % | 6,478 | 12,828 | 4,000 | 1 | ||||||||||||||||||
Crescent Circle, South Bend, IN (Blackthorn)* | South Bend | 431,675 | 3,432 | 32 | % | 40 | % | — | — | % | 5,125 | 8,557 | 11,000 | 1 | ||||||||||||||||||
Westway Park Blvd., Houston, TX (Houston West 3) | Houston | 417,504 | — | — | % | — | % | 8,564 | 100 | % | 5,304 | 13,868 | — | — | ||||||||||||||||||
Commerce Road (Totowa)** | New York | 296,520 | — | — | % | — | % | 20,460 | 30 | % | 5,540 | 26,000 | — | — | ||||||||||||||||||
Jurong East (Singapore)** | Singapore | 290,529 | 3,200 | 19 | % | 19 | % | — | — | % | — | 3,200 | — | 1 | ||||||||||||||||||
Goldcoast Dr., Cincinnati, OH (Goldcoast) | Cincinnati | 95,700 | 2,728 | — | % | — | % | 5,280 | 100 | % | 16,481 | 24,489 | 14,000 | 1 | ||||||||||||||||||
Total | $ | 422,498,959 | 1,511,672 | 86 | % | 89 | % | 377,219 | 77 | % | 961,345 | 2,850,236 | 510,000 | 235 | ||||||||||||||||||
* | 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. |
18
*** 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, 2015, multiplied by 12. For the month of September 2015, customer reimbursements were $49.5 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, 2013 through September 30, 2015, customer reimbursements under leases with separately metered power constituted between 9.0% and 14.2% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2015 was $431.7 million. Our annualized effective rent was greater than our annualized rent as of September 30, 2015 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) | Percent leased is determined based on CSF being billed to customers under signed leases as of September 30, 2015 divided by total CSF. Leases signed but not commenced as of September 30, 2015 are not included. |
(e) | Utilization is calculated by dividing CSF under signed leases for colocation space (whether or not the lease has commenced billing) by total CSF. |
(f) | 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. |
(g) | Percent leased is determined based on Office & Other space being billed to customers under signed leases as of September 30, 2015 divided by total Office & Other space. Leases signed but not commenced as of September 30, 2015 are not included. |
(h) | Represents infrastructure support space, including mechanical, telecommunications and utility rooms, as well as building common areas. |
(i) | Represents the NRSF at an operating facility that is currently leased or readily available for lease. This excludes existing vacant space held for development. |
(j) | Represents space that is under roof that could be developed in the future for operating NRSF, rounded to the nearest 1,000. |
(k) | 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. |
19
CyrusOne Inc.
NRSF Under Development
As of September 30, 2015
(Dollars in millions)
(Unaudited)
NRSF Under Development(a) | Under Development Costs(b) | ||||||||||||||||||||||||
Facilities | Metropolitan Area | Estimated Completion Date | Colocation Space (CSF) | Office & Other | Supporting Infrastructure | Powered Shell(c) | Total | Critical Load Capacity (MW)d | Actual to Date(e) | Estimated Costs to Completion(b) | Total | ||||||||||||||
Westover Hills Blvd. (San Antonio 2) | San Antonio | Q1 '16 | 30,000 | 20,000 | 25,000 | 49,000 | 124,000 | 3.0 | 28 | 12-15 | 40-43 | ||||||||||||||
Westway Park Blvd. (Houston West 3) | Houston | Q4 '15 | 53,000 | — | 32,000 | 213,000 | 298,000 | 6.0 | 45 | 8-11 | 53-56 | ||||||||||||||
Phoenix 3 | Phoenix | Q2 '16 | — | — | — | 150,000 | 150,000 | — | 4 | 6-8 | 10-12 | ||||||||||||||
Metropolis Drive (Austin 4) | Austin | Q4 '15 | 62,000 | 15,000 | 22,000 | 67,000 | 166,000 | 3.0 | 36 | 7-10 | 43-46 | ||||||||||||||
W. Frankford (Carrollton) | Dallas | Q1 '16 | 55,000 | — | 18,000 | — | 73,000 | 6.0 | 3 | 23-27 | 26-30 | ||||||||||||||
Total | 200,000 | 35,000 | 97,000 | 479,000 | 811,000 | 18.0 | $ | 116 | $56-71 | $172-187 | |||||||||||||||
(a) | Represents NRSF at a facility for which activities have commenced or are expected to commence in the next 2 quarters to prepare the space for its intended use. Estimates and timing are subject to change. |
(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. |
(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. Does not sum to total due to rounding. |
(e) | Actual to date is the cash investment as of September 30, 2015. There may be accruals above this amount for work completed, for which cash has not yet been paid. |
CyrusOne Inc.
Land Available for Future Development (Acres)
As of September 30, 2015
(Unaudited)
As of | |||
Market | September 30, 2015 | ||
Cincinnati | 98 | ||
Dallas | — | ||
Houston | 20 | ||
Virginia | 10 | ||
Austin | 22 | ||
Phoenix | 27 | ||
San Antonio | 13 | ||
Chicago | — | ||
New York Metro | — | ||
International | — | ||
Total Available | 190 | ||
20
CyrusOne Inc.
Leasing Statistics - Lease Signings
As of September 30, 2015
(Dollars in thousands)
(Unaudited)
Period | Number of Leases(a) | Total CSF Signed(b) | Total kW Signed(c) | Total MRR Signed ($000)(d) | Weighted Average Lease Term(e) | |||||
Q3'15 | 392 | 29,000 | 4,815 | $1,112 | 57 | |||||
Prior 4Q Avg. | 330 | 46,250 | 5,797 | $1,071 | 80 | |||||
Q2'15 | 372 | 48,000 | 4,758 | $1,119 | 90 | |||||
Q1'15 | 326 | 60,000 | 9,759 | $1,521 | 83 | |||||
Q4'14 | 335 | 44,000 | 5,262 | $950 | 69 | |||||
Q3'14 | 287 | 33,000 | 3,410 | $694 | 79 | |||||
(a) | Number of leases represents each agreement with a customer. A lease agreement could include multiple spaces, and a customer could have multiple leases. |
(b) | CSF represents the NRSF at an operating facility that is leased as colocation space, where customers locate their servers and other IT equipment. |
(c) | Represents maximum contracted kW that customers may draw during lease period. Additionally, we can develop flexible solutions for our customers at multiple resiliency levels, and the kW signed is unadjusted for this factor. |
(d) | Monthly recurring rent is defined as the average monthly contractual rent during the term of the lease. It includes the monthly impact of installation charges of approximately $0.1 million in each of Q1'15, Q2'15, and Q3'15. |
(e) | Calculated on a CSF-weighted basis. |
CyrusOne Inc.
New MRR Signed - Existing vs. New Customers
As of September 30, 2015
(Dollars in thousands)
(Unaudited)
(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 $0.1 million in each of Q1'15, Q2'15, and Q3'15. |
21
CyrusOne Inc.
Customer Sector Diversification(a)
As of September 30, 2015
(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 | Information Technology | 3 | $ | 16,008,787 | 3.8 | % | 33.2 | ||||||
2 | Telecommunication Services | 2 | 14,844,397 | 3.5 | % | 36.2 | |||||||
3 | Energy | 1 | 14,345,726 | 3.4 | % | 30.0 | |||||||
4 | Information Technology | 1 | 14,328,254 | 3.4 | % | 42.0 | |||||||
5 | Research and Consulting Services | 3 | 13,937,240 | 3.3 | % | 26.6 | |||||||
6 | Energy | 5 | 13,475,409 | 3.2 | % | 32.9 | |||||||
7 | Telecommunications (CBI)(e) | 7 | 10,986,108 | 2.6 | % | 21.4 | |||||||
8 | Information Technology | 1 | 10,901,028 | 2.6 | % | 112.8 | |||||||
9 | Industrials | 4 | 8,644,858 | 2.0 | % | 17.7 | |||||||
10 | Information Technology | 2 | 7,948,270 | 1.9 | % | 21.8 | |||||||
11 | Financials | 1 | 6,600,225 | 1.6 | % | 56.0 | |||||||
12 | Information Technology | 1 | 6,253,109 | 1.5 | % | 3.1 | |||||||
13 | Financials | 1 | 6,048,439 | 1.4 | % | 74.0 | |||||||
14 | Financials | 2 | 5,903,924 | 1.4 | % | 30.0 | |||||||
15 | Financials | 6 | 5,780,160 | 1.4 | % | 57.1 | |||||||
16 | Financials | 3 | 5,642,101 | 1.3 | % | 9.2 | |||||||
17 | Energy | 3 | 5,633,730 | 1.3 | % | 9.9 | |||||||
18 | Telecommunication Services | 5 | 5,473,368 | 1.3 | % | 43.0 | |||||||
19 | Consumer Staples | 1 | 5,026,531 | 1.2 | % | 79.4 | |||||||
20 | Energy | 1 | 4,768,879 | 1.1 | % | 48.4 | |||||||
$ | 182,550,543 | 43.2 | % | 38.5 | |||||||||
(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 September 30, 2015, multiplied by 12. For the month of September 2015, customer reimbursements were $49.5 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, 2013 through September 30, 2015, customer reimbursements under leases with separately metered power constituted between 9.0% and 14.2% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2015 was $431.7 million. Our annualized effective rent was greater than our annualized rent as of September 30, 2015 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, 2015, which was approximately $422.5 million. |
(d) | Weighted average based on customer’s percentage of total annualized rent expiring and is as of September 30, 2015, 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 2.1% of our annualized rent as of September 30, 2015. |
22
CyrusOne Inc.
Lease Distribution
As of September 30, 2015
(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 | 699 | 76 | % | 142,485 | 6 | % | $ | 69,355,155 | 16 | % | |||||||||
1,000-2,499 | 83 | 9 | % | 131,283 | 5 | % | 29,129,408 | 7 | % | ||||||||||
2,500-4,999 | 54 | 6 | % | 193,165 | 8 | % | 38,347,173 | 9 | % | ||||||||||
5,000-9,999 | 30 | 3 | % | 215,101 | 9 | % | 54,280,915 | 13 | % | ||||||||||
10,000+ | 57 | 6 | % | 1,716,494 | 72 | % | 231,386,308 | 55 | % | ||||||||||
Total | 923 | 100 | % | 2,398,528 | 100 | % | $ | 422,498,959 | 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 September 30, 2015. This may vary from total customer count as some customers may be under contract, but have yet to occupy space. |
(c) | Represents the total square feet at a facility under lease and that has commenced billing, excluding space held for development or space used by CyrusOne. A customer’s leased NRSF is estimated based on such customer’s direct CSF or office and light-industrial space plus management’s estimate of infrastructure support space, including mechanical, telecommunications and utility rooms, as well as building common areas. |
(d) | Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of September 30, 2015, multiplied by 12. For the month of September 2015, customer reimbursements were $49.5 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, 2013 through September 30, 2015, customer reimbursements under leases with separately metered power constituted between 9.0% and 14.2% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2015 was $431.7 million. Our annualized effective rent was greater than our annualized rent as of September 30, 2015 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. |
23
CyrusOne Inc.
Lease Expirations
As of September 30, 2015
(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 | 451,709 | 16 | % | |||||||||||||||||||
Month-to-Month | 240 | 23,335 | 1 | % | $ | 4,982,351 | 1 | % | $ | 4,982,351 | 1 | % | ||||||||||
2015 | 317 | 246,107 | 8 | % | 24,228,477 | 5 | % | 24,228,477 | 5 | % | ||||||||||||
2016 | 1,453 | 368,734 | 13 | % | 91,695,918 | 22 | % | 92,544,807 | 21 | % | ||||||||||||
2017 | 1,012 | 371,947 | 13 | % | 66,245,793 | 16 | % | 67,669,151 | 15 | % | ||||||||||||
2018 | 885 | 369,096 | 13 | % | 99,039,525 | 23 | % | 103,985,611 | 23 | % | ||||||||||||
2019 | 267 | 353,545 | 12 | % | 50,729,690 | 12 | % | 53,383,303 | 12 | % | ||||||||||||
2020 | 226 | 303,510 | 11 | % | 37,330,002 | 9 | % | 40,033,892 | 9 | % | ||||||||||||
2021 | 190 | 101,132 | 4 | % | 20,915,932 | 5 | % | 22,127,022 | 5 | % | ||||||||||||
2022 | 17 | 43,890 | 2 | % | 5,577,548 | 1 | % | 5,966,909 | 2 | % | ||||||||||||
2023 | 49 | 59,602 | 2 | % | 6,648,643 | 2 | % | 8,533,803 | 2 | % | ||||||||||||
2024 - Thereafter | 33 | 157,629 | 5 | % | 15,105,080 | 4 | % | 21,515,253 | 5 | % | ||||||||||||
Total | 4,689 | 2,850,236 | 100 | % | $ | 422,498,959 | 100 | % | $ | 444,970,579 | 100 | % | ||||||||||
(a) | Leases that were auto-renewed prior to September 30, 2015 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 September 30, 2015, multiplied by 12. For the month of September 2015, customer reimbursements were $49.5 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, 2013 through September 30, 2015, customer reimbursements under leases with separately metered power constituted between 9.0% and 14.2% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2015 was $431.7 million. Our annualized effective rent was greater than our annualized rent as of September 30, 2015 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, 2015, multiplied by 12. |
24
