Document



 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-K
_______________

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): May 2, 2018
_______________
CYRUSONE INC.
(Exact Name of Registrant as Specified in its Charter)
_______________
Maryland
 
001-35789
 
46-0691837
(State of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
2101 Cedar Springs Road, Suite 900
Dallas, TX 75201
(Address of Principal Executive Office)
Registrant’s telephone number, including area code: (972) 350-0060
_______________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨








Item 2.02 Results of Operations and Financial Condition
On May 2, 2018, CyrusOne Inc. issued a press release announcing financial results and supplemental information for the first quarter ended March 31, 2018. A copy of the press release and supplemental information is furnished herewith as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
During a webcast scheduled to be held at 11:00 a.m. Eastern time on May 3, 2018, Gary J. Wojtaszek, the Company’s president and chief executive officer, and Diane M. Morefield, the Company’s chief financial officer, will discuss the Company’s first quarter 2018 results and outlook for 2018. The slide presentation for the webcast will be available on the investors page of the Company’s website. To access the webcast and corresponding slide presentation, go to the investors page at http://investor.cyrusone.com/index.cfm. An audio replay of the webcast will also be available on the investors page at http://investor.cyrusone.com/index.cfm.
The information in Items 2.02 and 7.01 of this Current Report on Form 8-K and the exhibits furnished therewith shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, and shall not be or be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of any general incorporation language in such filing.
Item 9.01 — Financial Statements and Exhibits
(d) Exhibits.
 
 
 
Exhibit No.
 
Description
 












SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
Data: May 2, 2018
 
CYRUSONE INC.
 
 
 
 
 
By:
 
/s/ Robert M. Jackson
 
 
 
 
Robert M. Jackson


 
 
 
 
Executive Vice President, General Counsel
 
 
 
 
and Secretary




Exhibit
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Exhibit 99.1
CyrusOne Reports First Quarter 2018 Earnings
Pro Forma including Zenium, Signed $45 Million in Annualized GAAP Revenue
Year-over-Year Revenue Growth of 32% and Adjusted EBITDA Growth of 36%

DALLAS (May 2, 2018) - CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT, today announced first quarter 2018 earnings.

Highlights
Category
1Q’18
% Change
vs. 1Q’17
Revenue
$196.6 million
32%
Net income
$43.5 million
n/m
Adjusted EBITDA
$109.5 million
36%
Normalized FFO
$82.2 million
34%
Net income per share
$0.45
n/m
Normalized FFO per share
$0.85
18%

Pro forma including Zenium, leased 32 megawatts (“MW”) and 240,000 colocation square feet (“CSF”) in the first quarter, totaling $45 million in annualized GAAP revenue
Includes 29 MW and 226,000 CSF totaling $40.4 million in annualized revenue signed by CyrusOne and 3 MW and 14,000 CSF totaling $4.2 million in annualized GAAP revenue signed by Zenium

Backlog of $39 million in annualized GAAP revenue as of the end of the first quarter, representing more than $230 million in total contract value

Added three Fortune 1000 companies as new customers, increasing the total number of Fortune 1000 customers to 200 as of the end of the quarter
 
Entered into a new senior unsecured credit agreement, increasing the size of the credit facility by $1.0 billion, or 50%, to a total of $3.0 billion, consisting of $1.7 billion revolving credit facility and $1.3 billion in term loan commitments
Agreement also provides for an extension of maturity dates, reductions in interest rate margins, and enhanced flexibility in support of the Company’s international expansion plans, including the ability to borrow in non-USD currencies

Raised approximately $152 million in net proceeds through the sale of 3.0 million shares of common stock under the at-the-market (“ATM”) equity program

Acquisition of Zenium, a leading hyperscale data center provider in Europe with four properties in London and Frankfurt, the continent’s two largest data center markets, expected to close in May, pending final regulatory approval

“We had one of the highest quarterly leasing totals in the Company’s history and continued strong financial performance, with Revenue and Adjusted EBITDA each growing over 30%” said Gary Wojtaszek, president and chief executive officer of CyrusOne. “We are excited to begin our global expansion by establishing a presence in the two largest markets in Europe, London and Frankfurt, at a time when demand across the continent has accelerated and our customers are increasingly asking us to support their international growth objectives.”

First Quarter 2018 Financial Results
    
Revenue was $196.6 million for the first quarter, compared to $149.3 million for the same period in 2017, an increase of 32%. The increase in revenue was driven primarily by a 29% increase in occupied CSF, lease termination fees totaling $5.0 million, and additional interconnection services. The lease termination fees related primarily to a reimbursement for capital expenditures made in connection with the delivery of an initial deployment for a customer that subsequently migrated from that location to another CyrusOne facility.

Net income was $43.5 million for the first quarter, compared to net loss of $30.4 million in the same period in 2017. Net income for the first quarter included a $40.5 million unrealized gain on the Company’s equity investment in GDS due to an increase in GDS’s share price during

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the quarter. Net income per basic and diluted common share1 was $0.45 in the first quarter of 2018, compared to net loss of $(0.36) per basic and diluted common share in the same period in 2017.
Net operating income (NOI)2 was $128.8 million for the first quarter, compared to $97.0 million in the same period in 2017, an increase of 33%. Adjusted EBITDA3 was $109.5 million for the first quarter, compared to $80.7 million in the same period in 2017, an increase of 36%.

Normalized Funds From Operations (Normalized FFO)4 was $82.2 million for the first quarter, compared to $61.2 million in the same period in 2017, an increase of 34%. Normalized FFO per basic and diluted common share was $0.85 in the first quarter of 2018, an increase of 18% over first quarter 2017.

Leasing Activity

CyrusOne leased approximately 29 MW of power and 226,000 CSF in the first quarter, representing $3.4 million in monthly recurring rent, inclusive of the monthly impact of installation charges, or approximately $40.4 million in annualized GAAP revenue5, excluding estimates for pass-through power. This excludes the impact of leases signed by Zenium in the first quarter. The weighted average lease term of the new leases, based on square footage, is 77 months (6.4 years), and the weighted average remaining lease term of CyrusOne’s portfolio is 53 months (taking into account the impact of the backlog). Recurring rent churn6 for the first quarter was 0.5%, compared to 1.4% for the same period in 2017.

Portfolio Development and CSF Leased

In the first quarter, the Company completed construction on 82,000 CSF and 27 MW of power capacity across four projects in Dallas, Northern Virginia, Phoenix and Austin, increasing total CSF across 45 data centers to approximately 3.35 million CSF. CSF leased7 as of the end of the first quarter was 92% for stabilized properties8 and 86% overall. In addition, the Company has development projects underway in Dallas, Northern Virginia, San Antonio, Phoenix, the New York Metro area, and Chicago that are expected to add approximately 132,000 CSF and 36 MW of power capacity.

Balance Sheet and Liquidity

As of March 31, 2018, the Company had gross assets9 totaling approximately $5.3 billion, an increase of approximately 28% over gross assets as of March 31, 2017. CyrusOne had $2.20 billion of long-term debt10, cash and cash equivalents of $228.7 million, and $1.7 billion available under its unsecured revolving credit facility as of March 31, 2018. Net debt10 was $1.99 billion as of March 31, 2018, representing approximately 28% of the Company's total enterprise value as of March 31, 2018 of $7.1 billion, or 4.5x Adjusted EBITDA for the last quarter annualized. Available liquidity11 was $2.22 billion as of March 31, 2018.

As previously announced, CyrusOne entered into a new senior unsecured credit agreement in the first quarter, increasing the size of the credit facility by $1.0 billion, or 50%, to a total of $3.0 billion. The new agreement also provides for an extension of maturity dates, reductions in interest rate margins, and enhanced flexibility in support of the Company’s international expansion plans, including the ability to borrow in non-USD currencies.

The agreement consists of a $1.7 billion revolving credit facility, which includes a $750 million multicurrency borrowing sublimit, and term loan commitments totaling $1.3 billion. The term loan commitments consist of a $1.0 billion five-year term loan, which includes a delayed draw feature allowing the Company to draw $300 million in up to three tranches over a six-month period in multiple currencies, and a new $300 million seven-year term loan. The interest rate margins applicable to the revolving credit facility and the five-year term loan based on the Company’s current leverage level have been decreased by 10 basis points to LIBOR plus 1.45% and LIBOR plus 1.40%, respectively, while the interest rate margin applicable to the seven-year term loan based on the Company’s current leverage level is LIBOR plus 1.70%. The maturity of the revolving credit facility is March 2022, and the facility includes a one-year extension option which, if exercised by the Company, would extend the final maturity to March 2023. The maturity of the five-year term loan is March 2023, and the seven-year term loan matures in March 2025. The credit agreement also contains an accordion that allows the Company to obtain up to $1 billion in additional revolving or term loan commitments.

Also in the first quarter, CyrusOne sold approximately 3.0 million shares of its common stock through its ATM equity program at an average price of $51.24, raising approximately $152 million in net equity proceeds. As of March 31, 2018, there was approximately $346 million in remaining availability under the current ATM program.

Dividend

On February 21, 2018, the Company announced a dividend of $0.46 per share of common stock for the first quarter of 2018. The dividend was paid on April 13, 2018, to stockholders of record at the close of business on March 29, 2018.

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Additionally, today the Company is announcing a dividend of $0.46 per share of common stock for the second quarter of 2018. The dividend will be paid on July 13, 2018, to stockholders of record at the close of business on June 29, 2018.

Guidance

CyrusOne is reaffirming guidance for full year 2018. The annual guidance provided below represents forward-looking statements, which are based on current economic conditions, internal assumptions about the Company's existing customer base, and the supply and demand dynamics of the markets in which CyrusOne operates.

CyrusOne does not provide reconciliations for the non-GAAP financial measures included in the annual guidance provided below due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income (loss) and adjustments that could be made for transaction and acquisition integration costs, legal claim costs, lease exit costs, asset impairments and loss on disposals and other charges in its reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.
Category
2018
  Guidance(1)
Total Revenue
$810 - 825 million
   Lease and Other Revenues from Customers
$735 - 745 million
   Metered Power Reimbursements
$75 - 80 million
Adjusted EBITDA
$460 - 470 million
Normalized FFO per diluted common share
$3.18 - 3.28
Capital Expenditures
$850 - 900 million
   Development
$845 - 890 million
   Recurring
$5 - 10 million
 
 
(1)Full year 2018 guidance includes the impact of the Zenium acquisition, which is expected to close in May 2018. Development capital expenditures include the acquisition of land for future development.

Upcoming Conferences and Events

Jefferies 2018 Global Technology Conference on May 9-10 in Beverly Hills, California
J.P. Morgan Global Technology, Media and Communications Conference on May 15-17 in Boston, Massachusetts
2018 RBC Global Datacenter and Connectivity Conference on May 22 in Falls Church, Virginia
Cowen Technology, Media & Telecom Conference on May 30-31 in New York City
NAREIT’s REITweek Conference on June 5-7 in New York City

Conference Call Details

CyrusOne will host a conference call on May 3, 2018, at 11:00 AM Eastern Time (10:00 AM Central Time) to discuss its results for the first quarter of 2018. A live webcast of the conference call and the presentation to be made during the call will be available under the “Company” tab in the “Investors / 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 1-844-492-3731, and the international dial-in number is 1-412-542-4121. A replay will be available one hour after the conclusion of the earnings call on May 3, 2018, through May 17, 2018. 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 10118898.

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

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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.

Adoption of New Accounting Standard and Use of Non-GAAP Financial Measurements

On January 1, 2018, we adopted the new accounting standard with respect to revenue recognition, see “Note 2. Summary of Significant Accounting Policies” in our financial statements included on Form 10-Q for additional information. We have adopted the new standard using the modified retroactive transition method, where financial statement presentations prior to the date of adoption are not adjusted. Accordingly, all information related to periods prior to 2018 have not been adjusted, including non-GAAP measurements.

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, and Adjusted NOI as supplemental performance measures because they provide performance measures that, when compared year over year, capture trends in occupancy rates, rental rates and operating costs. The Company also believes that, as widely recognized measures of the performance of real estate investment trusts (REITs) and other companies, these measures will be used by investors as a basis to compare its operating performance with that of other companies. Other companies may not calculate these measures in the same manner, and, as presented, they may not be comparable to others. Therefore, FFO, Normalized FFO, NOI, Adjusted NOI, and Adjusted EBITDA should be considered only as supplements to net income as measures of our performance. FFO, Normalized FFO, NOI, Adjusted NOI, and Adjusted EBITDA should not be used as measures of liquidity or as indicative of funds available to fund the Company's cash needs, including the ability to pay dividends. These measures also should not be used as substitutes for cash flow from operating activities computed in accordance with U.S. GAAP.
1Net income / (loss) per common share is defined as net income / (loss) divided by the weighted average common shares outstanding for the period, which were 96.6 million for the first quarter of 2018 (basic and diluted). The difference between basic and diluted net income per share was less than one cent.
2We use Net Operating Income ("NOI"), which is a non-GAAP financial measure commonly used in the REIT industry, as a supplemental performance measure. We use NOI as a supplemental performance measure because, when compared period over period, it captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, NOI is used by investors as a basis to evaluate REITs.

We calculate NOI as revenue less property operating expenses, each of which are presented in the accompanying consolidated statements of operations. Amortization of deferred leasing costs is presented in depreciation and amortization, which is excluded from NOI. 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. However, the utility of NOI as a measure of our performance is limited. Other REITs may not calculate NOI in the same manner. Accordingly, our NOI may not be comparable to others. Therefore, NOI should be considered only as a supplement to revenue and to net income (loss) presented in accordance with GAAP as a measure of our performance. NOI should not be used as a measure of our liquidity or as indicative of funds available to fund our cash needs, including our ability to make distributions. NOI also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

3Adjusted EBITDA is defined as net income (loss) as defined by U.S. GAAP plus interest expense, income tax (benefit) expense, depreciation and amortization, asset impairments and (gain) loss on disposals, stock-based compensation, transaction and integration costs, severance and management transition costs, new accounting standards and systems implementation costs, lease exit costs, legal claim costs, loss on early extinguishment of debt, unrealized (gain) on marketable equity investments 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.
4We use funds from operations ("FFO") and normalized funds from operations ("Normalized FFO"), which are non-GAAP financial measures commonly used in the REIT industry, as supplemental performance measures. We use FFO and Normalized FFO as supplemental performance measures because, when compared period over period, they capture trends in occupancy rates, rental rates and operating costs. We also believe that, as widely recognized measures of the performance of REITs, FFO and Normalized FFO are used by investors as a basis to evaluate REITs.

We calculate FFO as net income (loss) computed in accordance with GAAP before real estate depreciation and amortization and asset impairments and gain or loss on disposal. While it is consistent with the definition of FFO promulgated by the National Association of Real Estate Investment Trusts ("NAREIT"), our computation of FFO may differ from the methodology for calculating FFO used by other REITs. Accordingly, our FFO may not be comparable to others.

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We calculate Normalized FFO as FFO plus amortization of customer relationship intangibles, transaction acquisition and other integration costs, legal claim costs and lease exit costs, and other special items including loss on early extinguishment of debt, new accounting standards and system implementation costs, and severance and management transition costs, as appropriate. Because the value of the customer relationship intangibles is inextricably connected to the real estate acquired, the Company believes the amortization of such intangibles 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. Other REITs may not calculate Normalized FFO in the same manner. Accordingly, our Normalized FFO may not be comparable to others.

In addition, because FFO and Normalized FFO exclude real estate depreciation and amortization and real estate impairments, and capture neither the changes in the value of our properties that result from use or from market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations, the utility of FFO and Normalized FFO as measures of our performance is limited. Therefore, FFO and Normalized FFO should be considered only as supplements to net income (loss) presented in accordance with GAAP as measures of our performance. FFO and Normalized FFO should not be used as measures of our liquidity or as indicative of funds available to fund our cash needs, including our ability to make distributions. FFO and Normalized FFO also should not be used as supplements to or substitutes for cash flow from operating activities computed in accordance with GAAP.
5Annualized GAAP revenue is equal to monthly recurring rent, defined as average monthly contractual rent during the term of the lease plus the monthly impact of installation charges, multiplied by 12. It can be shown both inclusive and exclusive of the Company’s estimate of customer reimbursements for metered power.
6Recurring rent churn 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.
7CSF leased is calculated by dividing CSF under signed leases for available space (whether or not the contract has commenced billing) by total CSF. CSF Leased differs from CSF Occupied presented in the Data Center Portfolio table because the leased rate includes CSF for signed leases that have not commenced billing.
8Stabilized properties include data halls that have been in service for at least 24 months or are at least 85% leased.
9Gross asset value is defined as total assets plus accumulated depreciation.
10Long-term debt and net debt exclude adjustments for deferred financing costs and bond premiums. Net 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 and cash equivalents.
11Liquidity is calculated as cash, cash equivalents, and temporary cash investments on hand, plus the undrawn capacity on CyrusOne's revolving credit facility and the delayed draw term loan.

About CyrusOne

CyrusOne (NASDAQ: CONE) is a high-growth real estate investment trust (REIT) specializing in highly reliable enterprise-class, carrier-neutral data center properties. The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers, including 200 Fortune 1000 companies.
With a track record of meeting and surpassing the aggressive speed-to-market demands of hyperscale cloud providers, as well as the expanding IT infrastructure requirements of the enterprise, CyrusOne provides the flexibility, reliability, security, and connectivity that foster business growth. CyrusOne offers a tailored, customer service-focused platform and is committed to full transparency in communication, management, and service delivery throughout its 45 data centers worldwide. Additional information about CyrusOne can be found at www.CyrusOne.com.

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Investor Relations:
Michael Schafer
Vice President, Capital Markets & Investor Relations
972-350-0060
investorrelations@cyrusone.com








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Company Profile

CyrusOne (NASDAQ: CONE) specializes in highly reliable enterprise-class, carrier-neutral data center properties. The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers, including 200 Fortune 1000 companies. CyrusOne's data center offerings provide the flexibility, reliability, and security that enterprise customers require and are delivered through a tailored, customer service-focused platform designed to foster long-term relationships. CyrusOne is committed to full transparency in communication, management, and service delivery throughout its 45 data centers worldwide.

Best-in-Class Sales Force
Flexible Solutions that Scale as Customers Grow
Massively Modular® Engineering with Data Hall Builds in 10-14 Weeks
Focus on Operational Excellence and Superior Customer Service
Proven Leading-Edge Technology Delivering Power Densities up to 900 Watts per Square Foot
National IX Replicates Enterprise Data Center Architecture

Corporate Headquarters
Senior Management
2101 Cedar Springs Road, Ste. 900
Gary Wojtaszek, President and CEO
Robert Jackson, EVP General Counsel & Secretary
Dallas, Texas 75201
Diane Morefield, EVP & Chief Financial Officer
John Hatem, EVP Design, Construction & Operations
Phone: (972) 350-0060
Kevin Timmons, EVP & Chief Technology Officer
Blake Hankins, Chief Information Officer
Website: www.cyrusone.com
Tesh Durvasula, EVP & Chief Commercial Officer
John Gould, EVP Global Sales
 
Jonathan Schildkraut, EVP & Chief Strategy Officer
Brent Behrman, EVP Strategic Sales
 
Kellie Teal-Guess, EVP & Chief People Officer
Howard Garfield, SVP & Chief Accounting Officer

Analyst Coverage
Firm
Analyst
Phone Number
Bank of America Merrill Lynch
Michael J. Funk
(646) 855-5664
Barclays
Amir Rozwadowski
(212) 526-4043
Citi
Mike Rollins
(212) 816-1116
Cowen and Company
Colby Synesael
(646) 562-1355
Credit Suisse
Sami Badri
(212) 538-1727
Deutsche Bank
Vin Chao
(212) 250-6799
Gabelli & Company
Sergey Dluzhevskiy
(914) 921-8355
Guggenheim Securities, LLC
Robert Gutman
(212) 518-9148
Jefferies
Jonathan Petersen
(212) 284-1705
J.P. Morgan
Richard Choe
(212) 622-6708
KeyBanc Capital Markets
Jordan Sadler
(917) 368-2280
MoffettNathanson
Nick Del Deo, CFA
(212) 519-0025
Morgan Stanley
Simon Flannery
(212) 761-6432
MUFG Securities
Stephen Bersey
(212) 405-7032
RBC Capital Markets
Jonathan Atkin
(415) 633-8589
Raymond James
Frank G. Louthan IV
(404) 442-5867
SunTrust Robinson Humphrey
Greg Miller
(212) 303-4169
UBS
John C. Hodulik, CFA
(212) 713-4226
Wells Fargo
Eric Luebchow
(312) 630-2386
William Blair
Jim Breen, CFA
(617) 235-7513






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CyrusOne Inc.
Summary of Financial Data
(Dollars in millions, except per share amounts)

 
Three Months
 
 
March 31,
December 31,
March 31,
Growth %
 
2018
2017
2017
Yr/Yr
Revenue
$
196.6

$
180.5

$
149.3

32
%
Net operating income
$
128.8

$
120.3

$
97.0

33
%
Net income (loss)
43.5

2.8

(30.4
)
n/m

Funds from operations ("FFO") - NAREIT defined
110.2

65.4

18.3

n/m

Normalized Funds from Operations ("Normalized FFO")
82.2

78.4

61.2

34
%
Weighted average number of common shares outstanding - diluted
96.6

93.5

84.5

14
%
Income (loss) per share - basic and diluted
$
0.45

$
0.03

$
(0.36
)
n/m

Normalized FFO per diluted common share
$
0.85

$
0.84

$
0.72

18
%
Adjusted EBITDA
109.5

104.2

80.7

36
%
Adjusted EBITDA as a % of Revenue
55.7
%
57.7
%
54.1
%
1.6 pts



 
As of
 
 
March 31,
December 31,
March 31,
Growth %
 
2018
2017
2017
Yr/Yr
Balance Sheet Data
 
 
 
 
Gross investment in real estate
$
3,954.6

$
3,840.8

$
3,237.5

22
%
Accumulated depreciation
(836.4
)
(782.4
)
(625.9
)
34
%
Total investment in real estate, net
3,118.2

3,058.4

2,611.6

19
%
Cash and cash equivalents
228.7

151.9

20.4

n/m

Market value of common equity
5,066.4

5,723.1

4,515.2

12
%
Net debt
1,987.2

1,958.2

1,747.0

14
%
Total enterprise value
7,053.6

7,681.3

6,262.2

13
%
Net debt to LQA Adjusted EBITDA
4.5x
4.7x
5.0x
(0.5)x
 
 
 
 
 
Dividend Activity
 
 
 
 
Dividends per share
$
0.46

$
0.42

$
0.42

10
%
 
 
 
 
 
Portfolio Statistics
 
 
 
 
Data centers
45

45

39

15
%
Stabilized CSF (000)
3,024

2,653

2,293

32
%
Stabilized CSF % leased
92
%
93
%
92
%
0 pts

Total CSF (000)
3,348

3,267

2,477

35
%
Total CSF % leased
86
%
83
%
88
%
(2) pts

Total NRSF (000)
5,824

5,717

4,645

25
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 






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

 
Three Months
 
 
 
Ended March 31,
Change
 
2018
2017
$
%
Revenue:
 
 
 
 
       Lease and other revenues from customers
$
175.2

$
134.2

$
41.0

31
%
       Metered power reimbursements
21.4

15.1

6.3

42
%
Revenue
196.6

149.3

47.3

32
%
Operating expenses:
 
 
 
 
Property operating expenses
67.8

52.3

15.5

30
%
Sales and marketing
5.3

4.9

0.4

8
%
General and administrative
19.3

15.8

3.5

22
%
Depreciation and amortization
74.6

55.7

18.9

34
%
Transaction, acquisition and other integration expenses
1.9

0.8

1.1

138
%
Total operating expenses
168.9

129.5

39.4

30
%
Operating income
27.7

19.8

7.9

40
%
Interest expense
(20.8
)
(13.6
)
(7.2
)
53
%
Unrealized gain on marketable equity investment
40.5


40.5

n/m

Loss on early extinguishment of debt
(3.1
)
(36.2
)
33.1

n/m

Net income (loss) before income taxes
44.3

(30.0
)
74.3

n/m

Income tax expense
(0.8
)
(0.4
)
(0.4
)
100
%
Net income (loss)
$
43.5

$
(30.4
)
$
73.9

n/m

Income (loss) per share - basic and diluted
$
0.45

$
(0.36
)
$
0.81

n/m


















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CyrusOne Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
(Unaudited)
 

 
March 31,
December 31,
Change
 
2018
2017
$
%
Assets
 
 
 
 
Investment in real estate:
 
 
 
 
Land
$
104.6

$
104.6

$

n/m

Buildings and improvements
1,400.8

1,371.4

29.4

2
 %
Equipment
1,959.5

1,813.9

145.6

8
 %
Gross operating real estate
3,464.9

3,289.9

175.0

5
 %
Less accumulated depreciation
(836.4
)
(782.4
)
(54.0
)
7
 %
Net operating real estate
2,628.5

2,507.5

121.0

5
 %
Construction in progress, including land under development
435.3

487.1

(51.8
)
(11
)%
Land held for future development
54.4

63.8

(9.4
)
(15
)%
Total investment in real estate, net
3,118.2

3,058.4

59.8

2
 %
Cash and cash equivalents
228.7

151.9

76.8

51
 %
Rent and other receivables, net
93.1

87.2

5.9

7
 %
Goodwill
455.1

455.1


 %
Intangible assets, net
196.8

203.0

(6.2
)
(3
)%
Other assets
406.4

356.5

49.9

14
 %
Total assets
$
4,498.3

$
4,312.1

$
186.2

4
 %
Liabilities and equity
 
 


Long-term debt, net
$
2,178.3

$
2,089.4

$
88.9

4
 %
Capital lease obligations
15.9

10.1

5.8

57
 %
Lease financing arrangements
131.3

131.9

(0.6
)
 %
Construction costs payable
89.0

115.5

(26.5
)
(23
)%
Accounts payable and accrued expenses
66.7

97.9

(31.2
)
(32
)%
Dividends payable
46.4

41.8

4.6

11
 %
Deferred revenue and prepaid rents
116.1

111.6

4.5

4
 %
Total liabilities
2,643.7

2,598.2

45.5

2
 %
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 98,933,109 and 96,137,874 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
1.0

1.0


n/m

Additional paid in capital
2,268.0

2,125.6

142.4

7
 %
Accumulated deficit
(413.1
)
(486.9
)
73.8

(15
)%
Accumulated other comprehensive income (loss)
(1.3
)
74.2

(75.5
)
 %
Total stockholders’ equity
1,854.6

1,713.9

140.7

8
 %
Total liabilities and equity
$
4,498.3

$
4,312.1

$
186.2

4
 %










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

 
For the three months ended:
March 31,
December 31,
September 30,
June 30,
March 31,
 
2018
2017
2017
2017
2017
Revenue:
 
 
 
 
 
Lease and other revenues from customers
$
175.2

$
161.6

$
155.5

$
151.1

$
134.2

Metered power reimbursements
21.4

18.9

19.8

15.8

15.1

Revenue
196.6

180.5

175.3

166.9

149.3

Operating expenses:
 
 
 
 
 
Property operating expenses
67.8

60.2

63.0

59.6

52.3

Sales and marketing
5.3

3.9

3.9

4.3

4.9

General and administrative
19.3

16.4

17.5

17.3

15.8

Depreciation and amortization
74.6

70.8

68.7

63.7

55.7

Transaction, acquisition and other integration expenses
1.9

5.3

4.1

1.7

0.8

        Asset impairments


54.4

3.6


Total operating expenses
168.9

156.6

211.6

150.2

129.5

Operating income
27.7

23.9

(36.3
)
16.7

19.8

Interest expense
(20.8
)
(20.1
)
(17.9
)
(16.5
)
(13.6
)
Unrealized gain on marketable equity investment
40.5





Loss on early extinguishment of debt
(3.1
)


(0.3
)
(36.2
)
Net income (loss) before income taxes
44.3

3.8

(54.2
)
(0.1
)
(30.0
)
Income tax expense
(0.8
)
(1.0
)
(0.9
)
(0.7
)
(0.4
)
Net income (loss)
$
43.5

$
2.8

$
(55.1
)
$
(0.8
)
$
(30.4
)
Income (loss) per share - basic and diluted
$
0.45

$
0.03

$
(0.61
)
$
(0.01
)
$
(0.36
)



















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CyrusOne Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
(Unaudited) 

 
March 31,
December 31,
September 30,
June 30,
March 31,
 
2018
2017
2017
2017
2017
Assets
 
 
 
 
 
Investment in real estate:
 
 
 
 
 
Land
$
104.6

$
104.6

$
102.8

$
94.0

$
79.8

Buildings and improvements
1,400.8

1,371.4

1,344.0

1,291.7

1,270.9

Equipment
1,959.5

1,813.9

1,721.2

1,525.3

1,438.0

Gross operating real estate
3,464.9

3,289.9

3,168.0

2,911.0

2,788.7

Less accumulated depreciation
(836.4
)
(782.4
)
(722.1
)
(679.6
)
(625.9
)
Net operating real estate
2,628.5

2,507.5

2,445.9

2,231.4

2,162.8

Construction in progress, including land under development
435.3

487.1

429.4

569.1

399.2

Land held for future development
54.4

63.8

58.7

52.7

49.6

Total investment in real estate, net
3,118.2

3,058.4

2,934.0

2,853.2

2,611.6

Cash and cash equivalents
228.7

151.9

24.6

40.0

20.4

Rent and other receivables, net
93.1

87.2

89.2

88.7

83.7

Restricted cash


0.1

0.8

0.6

Goodwill
455.1

455.1

455.1

455.1

455.1

Intangible assets, net
196.8

203.0

209.7

216.3

223.1

Other assets
406.4

356.5

171.1

162.5

149.3

Total assets
$
4,498.3

$
4,312.1

$
3,883.8

$
3,816.6

$
3,543.8

Liabilities and equity
 
 
 
 
 
Long-term debt, net
$
2,178.3

$
2,089.4

$
2,013.7

$
1,832.5

$
1,731.8

Capital lease obligations
15.9

10.1

10.9

11.7

12.4

Lease financing arrangements
131.3

131.9

133.3

134.0

134.5

Construction costs payable
89.0

115.5

133.6

163.4

174.3

Accounts payable and accrued expenses
66.7

97.9

71.5

73.2

56.2

Dividends payable
46.4

41.8

39.6

39.4

37.7

Deferred revenue and prepaid rents
116.1

111.6

104.8

96.5

93.3

Total liabilities
2,643.7

2,598.2

2,507.4

2,350.7

2,240.2

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 98,933,109 and 96,137,874 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
1.0

1.0

0.9

0.9

0.9

Additional paid in capital
2,268.0

2,125.6

1,826.0

1,821.9

1,620.5

Accumulated deficit
(413.1
)
(486.9
)
(449.2
)
(355.7
)
(316.5
)
Accumulated other comprehensive loss
(1.3
)
74.2

(1.3
)
(1.2
)
(1.3
)
Total stockholders' equity
1,854.6

1,713.9

1,376.4

1,465.9

1,303.6

Total liabilities and equity
$
4,498.3

$
4,312.1

$
3,883.8

$
3,816.6

$
3,543.8




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CyrusOne Inc.
Condensed Consolidated Statements of Cash Flow
(Dollars in millions)
(Unaudited) 
 
Three Months Ended March 31, 2018
Three Months Ended March 31, 2017
Cash flows from operating activities:
 
 
Net income (loss)
$
43.5

$
(30.4
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
Depreciation and amortization
74.6

55.7

Non-cash interest expense, net
0.7

0.9

Stock-based compensation expense
3.9

3.7

Provision for bad debt
0.5


Unrealized gain on marketable equity investment
(40.5
)

Loss on early extinguishment of debt
3.1

36.2

Other

0.2

Change in operating assets and liabilities:
 
 
Rent and other receivables, net and other assets
(18.0
)
(20.0
)
Accounts payable and accrued expenses
(28.9
)
(6.8
)
Deferred revenue and prepaid rents
5.3

15.7

Net cash provided by operating activities
44.2

55.2

Cash flows from investing activities:
 
 
Capital expenditures – asset acquisitions, net of cash acquired

(492.3
)
Capital expenditures – other development
(145.2
)
(182.5
)
Net cash used in investing activities
(145.2
)
(674.8
)
Cash flows from financing activities:
 
 
Issuance of common stock, net
142.9

211.0

Dividends paid
(41.0
)
(32.4
)
Proceeds from debt, net
985.6

1,200.9

Payments on debt
(902.7
)
(744.8
)
Payments on capital leases and lease financing arrangements
(2.6
)
(2.3
)
Tax payment upon exercise of equity awards
(4.4
)
(6.4
)
Net cash provided by financing activities
177.8

626.0

Net increase (decrease) in cash, cash equivalents and restricted cash
76.8

6.4

Cash, cash equivalents and restricted cash at beginning of period
151.9

14.6

Cash, cash equivalents and restricted cash at end of period
$
228.7

$
21.0

 
 
 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized of $5.1 million and $3.6 million in 2018 and 2017, respectively
$
42.2

$
18.3

Non-cash investing and financing activities:
 
 
Construction costs and other payables
89.0

174.3

Dividends payable
46.4

37.7

Real estate additions from entering into and modifying capital leases
6.6


Transfer of land held for future development to construction in progress
9.4

4.0

Transfer of real estate to construction in progress from operating real estate
178.7

305.3


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CyrusOne Inc.
Net Operating Income and Reconciliation of Net Income (Loss) to Adjusted EBITDA
(Dollars in millions)
(Unaudited)
 
Three Months Ended
 
 
Three Months Ended
 
March 31,
Change
March 31,
December 31,
September 30,
June 30,
March 31,
 
2018
2017
$
%
2018
2017
2017
2017
2017
Net Operating Income
 
 
 
 
 
 
 
 
 
Revenue
$
196.6

$
149.3

$
47.3

32%
$
196.6

$
180.5

$
175.3

$
166.9

$
149.3

Property operating expenses
67.8

52.3

15.5

30%
67.8

60.2

63.0

59.6

52.3

Net Operating Income (NOI)
$
128.8

$
97.0

$
31.8

33%
$
128.8

$
120.3

$
112.3

$
107.3

$
97.0

NOI as a % of Revenue
65.5
%
65.0
%
 
 
65.5
%
66.6
%
64.1
%
64.3
%
65.0
%
Reconciliation of Net Income (Loss) to Adjusted EBITDA:
 
 
 
 
 
 
 
 
 
Net income (loss)
$
43.5

$
(30.4
)
$
73.9

n/m
$
43.5

$
2.8

$
(55.1
)
$
(0.8
)
$
(30.4
)
Interest expense
20.8

13.6

7.2

53%
20.8

20.1

17.9

16.5

13.6

Income tax expense
0.8

0.4

0.4

100%
0.8

1.0

0.9

0.7

0.4

Depreciation and amortization
74.6

55.7

18.9

34%
74.6

70.8

68.7

63.7

55.7

Asset impairments and loss on disposals

0.2

(0.2
)
n/m

0.2

55.5

3.6

0.2

EBITDA (NAREIT definition)(a)
$
139.7

$
39.5

100.2

n/m
$
139.7

$
94.9

$
87.9

$
83.7

$
39.5

 
 
 
 
 
 
 
 
 
 
Transaction, acquisition and other integration expenses
1.9

0.6

1.3

n/m
1.9

5.1

3.0

1.7

0.6

Legal claim costs
0.2

0.2


n/m
0.2


0.3

0.6

0.2

Stock-based compensation expense
3.9

3.7

0.2

5%
3.9

3.1

3.9

4.0

3.7

Severance and management transition costs
0.7

0.5

0.2

40%
0.7




0.5

Loss on early extinguishment of debt
3.1

36.2

(33.1
)
n/m
3.1



0.3

36.2

New accounting standards and system implementation costs
0.5


0.5

n/m
0.5

1.1

0.8

0.5


Unrealized gain on marketable equity investments
(40.5
)

(40.5
)
n/m
(40.5
)




Adjusted EBITDA
$
109.5

$
80.7

28.8

36%
$
109.5

$
104.2

$
95.9

$
90.8

$
80.7

Adjusted EBITDA as a % of Revenue
55.7
%
54.1
%
 
 
55.7
%
57.7
%
54.7
%
54.4
%
54.1
%
(a)
We calculate Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) as GAAP net income (loss) plus interest expense, income tax expense, depreciation and amortization plus or minus losses and gains on the disposition of depreciable property, plus asset impairments. While it is consistent with the definition of EBITDAre promulgated by the National Association of Real Estate Investment Trusts ("NAREIT"), our computation of EBITDAre may differ from the methodology for calculating EBITDAre used by other REITs. Accordingly, our EBITDAre may not be comparable to others.

CyrusOne Inc.
Reconciliation of Net Income (Loss) to Net Operating Income
(Dollars in millions)
(Unaudited)
 
Three Months Ended
 
 
 
March 31,
Change
2018
2017
$
%
Net Income (Loss)
$
43.5

$
(30.4
)
$
73.9

(243
)%
Sales and marketing
5.3

4.9

0.4

8
 %
General and administrative
19.3

15.8

3.5

22
 %
Depreciation and amortization
74.6

55.7

18.9

34
 %
Transaction, acquisition and other integration expenses
1.9

0.8

1.1

138
 %
Interest expense
20.8

13.6

7.2

53
 %
Unrealized gain on marketable equity securities
(40.5
)

(40.5
)
n/m

Loss on early extinguishment of debt
3.1

36.2

(33.1
)
(91
)%
Income tax expense
0.8

0.4

0.4

100
 %
Net Operating Income
$
128.8

$
97.0

$
31.8

33
 %

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

 
 
Three Months Ended
 
 
Three Months Ended
 
March 31,
Change
March 31,
December 31,
September 30,
June 30,
March 31,
2018
2017
$
%
2018
2017
2017
2017
2017
Reconciliation of Net Income (Loss) to FFO and Normalized FFO:
 
 
 
 
 
 
 
 
 
Net income (loss)
$
43.5

$
(30.4
)
$
73.9

n/m

$
43.5

$
2.8

$
(55.1
)
$
(0.8
)
$
(30.4
)
Real estate depreciation and amortization
66.7

48.7

18.0

37
 %
66.7

62.6

60.3

55.3

48.7

Asset impairments



n/m



54.4

3.6


Funds from Operations ("FFO") - NAREIT defined
$
110.2

$
18.3

$
91.9

n/m

$
110.2

$
65.4

$
59.6

$
58.1

$
18.3

 
 
 
 
 
 
 
 
 
 
Loss on early extinguishment of debt
3.1

36.2

(33.1
)
n/m

3.1



0.3

36.2

Unrealized gain on marketable equity investments
(40.5
)

(40.5
)
n/m

(40.5
)




New accounting standards and system implementation costs
0.5


0.5

n/m

0.5

1.1

0.8

0.5


Amortization of customer relationship intangibles
6.1

5.2

0.9

17
 %
6.1

6.6

6.6

6.7

5.2

Transaction, acquisition and other integration expenses
1.9

0.8

1.1

138
 %
1.9

5.3

4.1

1.7

0.8

Severance and management transition costs
0.7

0.5

0.2

40
 %
0.7




0.5

Legal claim costs
0.2

0.2


n/m

0.2


0.3

0.6

0.2

Normalized Funds from Operations (Normalized FFO)
$
82.2

$
61.2

$
21.0

34
 %
$
82.2

$
78.4

$
71.4

$
67.9

$
61.2

Normalized FFO per diluted common share
$
0.85

$
0.72

$
0.13

18
 %
$
0.85

$
0.84

$
0.79

$
0.77

$
0.72

Weighted average diluted common shares outstanding
96.6

84.5

12.1

14
 %
96.6

93.5

90.9

88.5

84.5

 
 
 
 
 
 
 
 
 
 
Additional Information:
 
 
 
 
 
 
 
 
 
Amortization of deferred financing costs and bond premium
0.7

1.0

(0.3
)
(30
)%
0.7

0.9

1.2

1.2

1.0

Stock-based compensation expense
3.9

3.7

0.2

5
 %
3.9

3.1

3.9

4.0

3.7

Non-real estate depreciation and amortization
1.8

1.8


n/m

1.8

1.6

1.8

1.7

1.8

Straight line rent adjustments(a) 
(7.2
)
(9.7
)
2.5

(26
)%
(7.2
)
(7.4
)
(6.4
)
(8.8
)
(9.7
)
Deferred revenue, primarily installation revenue(b)
3.2

0.3

2.9

n/m

3.2

3.8

12.9

6.1

0.3

Leasing commissions
(3.2
)
(3.9
)
0.7

(18
)%
(3.2
)
(3.5
)
(6.1
)
(3.8
)
(3.9
)
Recurring capital expenditures
(2.4
)
(1.5
)
(0.9
)
60
 %
(2.4
)
(1.6
)
(0.6
)
(0.7
)
(1.5
)

(a)
Straight line rent adjustments:
Represents the difference between revenue recognized on a straight line basis under U.S. GAAP over the term of the lease compared to the contractual rental payments. Lease agreements typically include payments that escalate over the term of the contract or, to a lesser extent, a ramp period.

(b)
Deferred revenue, primarily installation revenue:
Represents payments received from customers in excess of revenue recognized under U.S. GAAP. This primarily relates to specific customer-requested buildouts that CyrusOne does not include in its basic data center design. The company charges customers up front for these buildouts rather than incorporating into rent and billing them over time. The cash payments for these buildouts are non-recurring, and may vary significantly from quarter to quarter, but revenue is amortized over the life of the lease.






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

Market Capitalization
(dollars in millions)
Shares or
Equivalents
Outstanding
Market Price
as of
March 31, 2018
Market Value
Equivalents
(in millions)
Common shares
98,933,109

$
51.21

$
5,066.4

Net Debt
 
 
1,987.2

Total Enterprise Value (TEV)
 
 
$
7,053.6

Reconciliation of Net Debt
 
March 31,
December 31,
(dollars in millions)
2018
2017
Long-term debt(a)
$
2,200.0

$
2,100.0

Capital lease obligations
15.9

10.1

Less:
 
 
Cash and cash equivalents
(228.7
)
(151.9
)
Net Debt
$
1,987.2

$
1,958.2


(a)Excludes adjustment for deferred financing costs.

Debt Schedule (as of March 31, 2018)
(dollars in millions)
 
 
 
Long-term debt:
Amount
Interest Rate
Maturity Date
Revolving credit facility
$

L + 145bps

March 2023(a)
Term loan
700.0

3.28
%
March 2023
Term loan
300.0

3.58
%
March 2025
5.000% senior notes due 2024, excluding bond premium
700.0

5.000
%
March 2024
5.375% senior notes due 2027, excluding bond premium
500.0

5.375
%
March 2027
Total long-term debt(b)
$
2,200.0

4.34
%
 
 
 
 
 
Weighted average term of debt:
6.5

years
 

(a)
Assuming exercise of one-year extension option.
(b)
Excludes adjustment for deferred financing costs.

Interest Summary
Three Months Ended
 
 
March 31,
December 31,
March 31,
Growth %
(dollars in millions)
2018
2017
2017
Yr/Yr
Interest expense and fees
$
25.2

$
23.8

$
16.2

56
 %
Amortization of deferred financing costs and bond premium
0.7

0.9

1.0

(30
)%
Capitalized interest
(5.1
)
(4.6
)
(3.6
)
42
 %
Total interest expense
$
20.8

$
20.1

$
13.6

53
 %





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

 
As of March 31, 2018
As of December 31, 2017
As of March 31, 2017
Market
Colocation
Space (CSF)
(a) (000)
CSF
Leased
(b)
Colocation
Space (CSF)
(a) (000)
CSF
Leased
(b)
Colocation
Space (CSF)
(a) (000)
CSF
Leased
(b)
Northern Virginia
673

94
%
640

79
%
357

100
%
Dallas
555

81
%
506

85
%
431

87
%
Phoenix
509

91
%
509

91
%
216

100
%
Cincinnati
404

92
%
404

91
%
387

91
%
Houston
308

74
%
308

74
%
308

74
%
San Antonio
273

100
%
273

88
%
240

100
%
New York Metro
218

83
%
218

82
%
218

83
%
Chicago
213

67
%
213

64
%
136

86
%
Austin
106

73
%
106

67
%
106

59
%
Raleigh-Durham
76

88
%
76

88
%
65

80
%
International
13

76
%
13

76
%
13

74
%
Total
3,348

86
%
3,267

83
%
2,477

88
%
Stabilized Properties(c)
3,024

92
%
2,653

93
%
2,293

92
%

(a)
CSF represents the NRSF at an operating facility that is currently leased or readily available for lease as colocation space, where customers locate their servers and other IT equipment.
(b)
CSF Leased is calculated by dividing CSF under signed leases for colocation space (whether or not the lease has commenced billing) by total CSF.
(c)
Stabilized properties include data halls that have been in service for at least 24 months or are at least 85% leased.



























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CyrusOne Inc.
2018 Guidance

Category
2018
  Guidance(1)
Total Revenue
$810 - 825 million
   Lease and Other Revenues from Customers
$735 - 745 million
   Metered Power Reimbursements
$75 - 80 million
Adjusted EBITDA
$460 - 470 million
Normalized FFO per diluted common share
$3.18 - 3.28
Capital Expenditures
$850 - 900 million
   Development
$845 - 890 million
   Recurring
$5 - 10 million
 
 
(1)Full year 2018 guidance includes the impact of the Zenium acquisition, which is expected to close in May 2018. Development capital expenditures include the acquisition of land for future development.

 
The annual guidance provided above represents forward-looking statements, which are based on current economic conditions, internal assumptions about the Company's existing customer base and the supply and demand dynamics of the markets in which CyrusOne operates.

CyrusOne does not provide reconciliations for the non-GAAP financial measures included in the annual guidance provided above due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income (loss) and adjustments that could be made for transaction and acquisition integration costs, legal claim costs, lease exit costs, asset impairments and loss on disposals and other charges in its reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.




























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CyrusOne Inc.
Data Center Portfolio
As of March 31, 2018
(Unaudited)
 
 
 
Operating Net Rentable Square Feet (NRSF)(a)
Powered
Shell 
Available
for Future 
Development
(NRSF)
(k)  (000)
Available Critical Load Capacity
 (MW)
(l)
Stabilized Properties(b)
Metro
Area
Annualized Rent(c) ($000)
Colocation Space (CSF)(d) (000)
CSF Occupied(e)
CSF
Leased
(f)
Office & Other(g) (000)
Office & Other Occupied(h)
Supporting
Infrastructure
(i) (000)
Total(j)  (000)
Dallas - Carrollton
Dallas
$
70,766

305

89
%
90
%
66

63
%
111

482

16

38

Houston - Houston West I
Houston
43,053

112

96
%
96
%
11

99
%
37

161

3

28

Dallas - Lewisville*
Dallas
34,705

114

93
%
93
%
11

95
%
54

180


21

Cincinnati - 7th Street***
Cincinnati
34,475

197

93
%
94
%
6

100
%
175

378

46

16

Northern Virginia - Sterling II
Northern Virginia
33,337

159

100
%
100
%
9

100
%
55

223


30

Somerset I
New York Metro
29,300

97

88
%
88
%
27

85
%
89

213

2

11

Chicago - Aurora I
Chicago
28,034

113

96
%
96
%
34

100
%
223

371

27

71

San Antonio III
San Antonio
27,148

132

100
%
100
%
9

100
%
43

184


24

Totowa - Madison**
New York Metro
25,798

51

89
%
89
%
22

100
%
59

133


6

Cincinnati - North Cincinnati
Cincinnati
24,319

65

98
%
98
%
45

75
%
53

163

65

14

Houston - Houston West II
Houston
22,874

80

87
%
87
%
4

88
%
55

139

11

12

San Antonio I
San Antonio
22,684

44

100
%
100
%
6

83
%
46

96

11

12

Wappingers Falls I**
New York Metro
22,448

37

86
%
91
%
20

99
%
15

72


3

Phoenix - Chandler II
Phoenix
19,956

74

100
%
100
%
6

38
%
26

105


12

Phoenix - Chandler I
Phoenix
18,331

74

100
%
100
%
35

12
%
39

147

31

16

Northern Virginia - Sterling I
Northern Virginia
18,311

78

100
%
100
%
6

77
%
49

132


12

Raleigh-Durham I
Raleigh-Durham
17,877

76

88
%
88
%
13

100
%
82

171

246

12

Phoenix - Chandler III
Phoenix
17,344

68

100
%
100
%
2

%
30

101


14

Houston - Galleria
Houston
16,696

63

61
%
61
%
23

51
%
25

112


14

Austin II
Austin
15,234

44

95
%
95
%
2

100
%
22

68


5

Northern Virginia - Sterling III
Northern Virginia
15,184

79

100
%
100
%
7

100
%
34

120


15

San Antonio II
San Antonio
14,310

64

100
%
100
%
11

100
%
41

117


12

Northern Virginia - Sterling V
Northern Virginia
13,394

276

59
%
85
%
9

100
%
121

405

244

33

Florence
Cincinnati
13,276

53

99
%
99
%
47

87
%
40

140


9

Phoenix - Chandler VI
Phoenix
12,277

148

94
%
94
%
5

100
%
32

185

10

24

Phoenix - Chandler IV
Phoenix
11,222

73

100
%
100
%
3

100
%
27

103


12

Cincinnati - Hamilton*
Cincinnati
11,176

47

76
%
76
%
1

100
%
35

83


10

Austin III
Austin
10,769

62

52
%
58
%
15

83
%
21

98

67

6

London - Great Bridgewater**
International
6,015

10

94
%
94
%

%
1

11


1

Northern Virginia - Sterling IV
Northern Virginia
5,774

81

100
%
100
%
7

100
%
34

122


15

Dallas - Midway**
Dallas
5,357

8

100
%
100
%

%

8


1

Stamford - Riverbend**
New York Metro
5,149

20

23
%
23
%

%
8

28


2

Cincinnati - Mason
Cincinnati
5,087

34

100
%
100
%
26

98
%
17

78


4

Norwalk I**
New York Metro
3,797

13

93
%
100
%
4

72
%
41

58

87

2

Dallas - Marsh**
Dallas
2,570

4

100
%
100
%

%

4


1

Chicago - Lombard
Chicago
2,325

14

73
%
73
%
4

100
%
12

30

29

3

Stamford - Omega**
New York Metro
1,238


%
%
19

84
%
4

22



Cincinnati - Blue Ash*
Cincinnati
630

6

36
%
36
%
7

100
%
2

15


1

Totowa - Commerce**
New York Metro
569


%
%
20

38
%
6

26



South Bend - Crescent*
Chicago
541

3

40
%
40
%

%
5

9

11

1

Houston - Houston West III
Houston
507


%
%
10

100
%
11

21

209


Singapore - Inter Business Park**
International
376

3

22
%
22
%

%

3


1

South Bend - Monroe
Chicago
142

6

23
%
23
%

%
6

13

4

1

Cincinnati - Goldcoast
Cincinnati
13

3

%
%
5

%
16

24

14

1

San Antonio IV
San Antonio

33

%
100
%
4

%
27

64


6

Stabilized Properties - Total
 
$
684,384

3,024

88
%
92
%
562

78
%
1,830

5,416

1,133

518

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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CyrusOne Inc.