CyrusOne Reports Third Quarter 2021 Earnings

DALLAS–(BUSINESS WIRE)–CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT, today announced third quarter 2021 earnings.

Highlights

Category

3Q’21

vs. 3Q’20

Revenue

$304.1 million

16%

Net income

$6.7 million

n/m

Adjusted EBITDA

$149.2 million

13%

Normalized FFO

$127.2 million

11%

Net income per diluted common share

$0.05

n/m

Normalized FFO per diluted common share

$1.02

6%

  • Leased 20 megawatts (“MW”) and 100,000 colocation square feet (“CSF”) in the third quarter, totaling $37.8 million in annualized GAAP revenue
    • Includes $26.8 million in annualized GAAP revenue signed across European locations, reflecting continued strong demand in these markets from hyperscale customers
  • Backlog of approximately $106 million in annualized GAAP revenue as of the end of the third quarter representing approximately $925 million in total contract value
  • Acquired a six-acre site in Frankfurt, providing an estimated 21 MW of power capacity to support the Company’s continued growth in one of the strongest data center markets in Europe
    • Also acquired ten acres of land in San Antonio, providing an estimated 21 MW of power capacity in a key U.S. market
  • Settled forward sale agreements entered into in 2020, resulting in net proceeds of approximately $213 million, which were used for general corporate purposes
    • The Company has approximately $303 million in remaining available forward equity

“We had strong financial results and another good bookings quarter, including a significant contribution from our European markets and healthy pricing across the leases,” said David Ferdman, interim president and chief executive officer of CyrusOne. “The demand environment remains strong, we continue to have productive discussions with our customers, and we are well positioned with capacity across the portfolio and more than $2 billion of available liquidity to support our growth.”

Third Quarter 2021 Financial Results

Revenue was $304.1 million for the third quarter, compared to $262.8 million for the same period in 2020, an increase of 16%. The increase in revenue was driven primarily by a 13% increase in occupied CSF and higher metered power reimbursements.

Net income was $6.7 million for the third quarter, compared to net loss of $(37.3) million in the same period in 2020. Net income for the third quarter included a $14.4 million gain associated with a change in fair value on the undesignated portion of the Company’s net investment hedge compared to a $(22.9) million loss in the third quarter of 2020. Additionally, in the third quarter of 2020, the Company had an $(8.8) million impairment loss as a result of damage to equipment held for use in inventory at our U.S. data centers and a ($3.1) million loss on early extinguishment of debt related to the repayment of $300 million of outstanding indebtedness under the unsecured term loan maturing in March 2023, partially offset by a $4.7 million gain on the Company’s equity investment in GDS Holdings Limited. Additionally, General and administrative expenses for the third quarter included $8.9 million in cash severance and management transition costs and severance-related stock compensation costs compared to $9.0 million in the same period in 2020. Net income per diluted common share1 was $0.05 in the third quarter of 2021, compared to net loss per diluted common share of $(0.32) in the same period in 2020.

Net operating income (“NOI”)2 was $170.7 million for the third quarter, compared to $153.1 million in the same period in 2020, an increase of 11%. Adjusted EBITDA3 was $149.2 million for the third quarter, compared to $132.2 million in the same period in 2020, an increase of 13%.

Normalized Funds From Operations (“Normalized FFO”)4 was $127.2 million for the third quarter, compared to $114.4 million in the same period in 2020, an increase of 11%. Normalized FFO per diluted common share was $1.02 in the third quarter of 2021, compared to $0.96 in the same period in 2020, an increase of 6%.

Leasing Activity

CyrusOne leased approximately 20 MW of power and 100,000 CSF in the third quarter, representing approximately $3.2 million in monthly recurring rent, inclusive of the monthly impact of installation charges. The leasing for the quarter represents approximately $37.8 million in annualized GAAP revenue5, excluding estimates for pass-through power. The weighted average lease term of the new leases, based on square footage, is 108 months (9.0 years), and the weighted average remaining lease term of CyrusOne’s portfolio is 51 months (taking into consideration the impact of the backlog). Recurring rent churn percentage6 for the third quarter was 0.5%, compared to 0.6% for the same period in 2020.

Portfolio Development and Percentage CSF Leased

In the third quarter, the Company completed construction on 161,000 CSF and 38 MW of power capacity across Phoenix, Northern Virginia, the New York Metro area, Cincinnati, Paris and Frankfurt. Percentage CSF leased7 as of the end of the third quarter was 86% for stabilized properties8 and 84% overall. In addition, the Company has development projects underway in London, Frankfurt, Northern Virginia and San Antonio that are expected to add approximately 211,000 CSF and 49 MW of power capacity plus 469,000 square feet of powered shell.

Balance Sheet and Liquidity

As of September 30, 2021, the Company had gross asset value9 totaling approximately $9.4 billion, an increase of approximately 12% over gross asset value as of September 30, 2020. CyrusOne had $3.56 billion of long-term debt10, $456 million of cash and cash equivalents, and approximately $1.39 billion available under its unsecured revolving credit facility as of September 30, 2021. Net debt10 was $3.26 billion as of September 30, 2021, representing approximately 25% of the Company’s total enterprise value as of September 30, 2021 of $13.1 billion. This represented approximately 5.0x Adjusted EBITDA for the last quarter annualized (after further adjusting net debt to reflect the pro forma impact of settlement of the forward sale agreements). Available liquidity11 was $2.15 billion as of September 30, 2021.

During the third quarter of 2021, the Company settled forward sale agreements entered into in 2020, resulting in net proceeds of approximately $213 million, which were used for general corporate purposes. The Company has approximately $303 million in remaining available forward equity (no portion of these forward sale agreements has been settled as of October 27, 2021). As of September 30, 2021, there was approximately $513 million in remaining availability under the ATM equity program.

Dividend

On July 28, 2021, the Company announced a dividend of $0.52 per share of common stock for the third quarter of 2021. The dividend was paid on October 8, 2021, to stockholders of record at the close of business on September 24, 2021.

Additionally, today the Company is announcing a dividend of $0.52 per share of common stock for the fourth quarter of 2021. The dividend will be paid on January 7, 2022, to stockholders of record at the close of business on January 3, 2022.

Guidance

CyrusOne is updating its guidance for full year 2021, increasing the lower and upper ends of its guidance ranges for Total Revenue and Normalized FFO per diluted common share, increasing the lower end of its guidance range for Adjusted EBITDA, and narrowing the guidance range for 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. We continue to monitor the global outbreak of COVID-19 and to take steps to mitigate the potential risks to us posed by the pandemic. While the impact on our business has not been significant to date, the length and severity of the effects of the pandemic remain uncertain and unpredictable and could be materially adverse to our business, financial condition, results of operations, cash flows and ability to pay dividends as well as the market price of our common stock.

CyrusOne does not provide forward-looking guidance for GAAP financial measures (other than Total Revenue and Capital Expenditures) or reconciliations for the non-GAAP financial measures included in the annual guidance provided below due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including Net income (loss) and adjustments that could be made for Transaction, acquisition, integration and other related expenses, Legal claim costs, Impairment losses and (gain) loss on asset disposals and other charges in its reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.

Category

Previous 2021 Guidance

Revised 2021 Guidance

Total Revenue

$1,155 – 1,185 million

$1,180 – 1,200 million

Lease and Other Revenues from Customers

$930 – 950 million

$940 – 950 million

Metered Power Reimbursements

$225 – 235 million

$240 – 250 million

Adjusted EBITDA

$575 – 590 million

$585 – 590 million

Normalized FFO per diluted common share

$3.95 – 4.05

$4.03 – 4.08

Capital Expenditures

$875 – 975 million

$900 – 950 million

Development(1)

$855 – 935 million

$875 – 915 million

Recurring

$20 – 40 million

$25 – 35 million

 

 

 

(1)Development capital expenditures include the acquisition of land for future development.

Upcoming Conferences and Events (All Virtual)

  • NAREIT’s REITworld on November 9-11
  • Morgan Stanley European Technology, Media & Telecom Conference on November 17-19
  • Raymond James Technology Investors Conference on December 6-8

Conference Call Details

CyrusOne will host a conference call on October 28, 2021, at 11:00 AM Eastern Time (10:00 AM Central Time) to discuss its results for the third quarter 2021. A live webcast of the conference call will be available in the “Investors / Events & Presentations” section of the Company’s website at http://investor.cyrusone.com/events.cfm. The presentation to be made during the call is now available in this location. The U.S. conference call dial-in number is 1-844-492-3731, and the international dial-in number is 1-412-542-4121. A replay will be available one hour after the conclusion of the earnings call on October 28, 2021, through November 11, 2021. 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 10160637.

Safe Harbor

This release and the documents incorporated by reference herein contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward- looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. All statements, other than statements of historical facts, are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “predicts,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “may,” variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our and our customers’ respective businesses and industries, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned these forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially and adversely from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, (i) the potential widespread and highly uncertain impact of public health outbreaks, epidemics and pandemics, such as the COVID-19 pandemic; (ii) loss of key customers; (iii) indemnification and liability provisions as well as service level commitments in our contracts with customers imposing significant costs on us in the event of losses; (iv) economic downturn, natural disaster or oversupply of data centers in the limited geographic areas that we serve; (v) risks related to the development of our properties including, without limitation, obtaining applicable permits, power and connectivity and our ability to successfully lease those properties; (vi) weakening in the fundamentals for data center real estate, including but not limited to, increased competition, falling market rents, decreases in or slowed growth of global data, e-commerce and demand for outsourcing of data storage and cloud-based applications; (vii) loss of access to key third-party service providers and suppliers; (viii) risks of loss of power or cooling which may interrupt our services to our customers; (ix) inability to identify and complete acquisitions and operate acquired properties; (x) our failure to obtain necessary outside financing on favorable terms, or at all; (xi) restrictions in the instruments governing our indebtedness; (xii) risks related to environmental, social and governance matters; (xiii) unknown or contingent liabilities related to our acquisitions; (xiv) significant competition in our industry; (xv) recent turnover, or the further loss of, any of our key personnel; (xvi) risks associated with real estate assets and the industry; (xvii) failure to maintain our status as a REIT (as defined below) or to comply with the highly technical and complex REIT provisions of the Internal Revenue Code of 1986, as amended; (xviii) REIT distribution requirements could adversely affect our ability to execute our business plan; (xix) insufficient cash available for distribution to stockholders; (xx) future offerings of debt may adversely affect the market price of our common stock; (xxi) increases in market interest rates will increase our borrowing costs and may drive potential investors to seek higher dividend yields and reduce demand for our common stock; (xxii) market price and volume of stock could be volatile; (xxiii) risks related to regulatory changes impacting our customers and demand for colocation space in particular geographies; (xxiv) our international activities, including those conducted as a result of land acquisitions and with respect to leased land and buildings, are subject to special risks different from those faced by us in the United States; (xxv) the continuing uncertainty about the future relationship between the United Kingdom and the European Union following the United Kingdom’s withdrawal from the European Union; (xxvi) expanded and widened price increases in certain selective materials for data center development capital expenditures due to international trade negotiations; (xxvii) a failure to comply with anti-corruption laws and regulations; (xxviii) legislative or other actions relating to taxes; (xxix) any significant security breach or cyber-attack on us or our key partners or customers; (xxx) the ongoing trade conflict between the United States and the People’s Republic of China; (xxxi) increased operating costs and capital expenditures at our facilities, including those resulting from higher utilization by our customers, general market conditions and inflation, exceeding revenue growth; and (xxxii) other factors affecting the real estate and technology industries generally. More information on potential risks and uncertainties is available in our recent filings with the Securities and Exchange Commission (SEC), including CyrusOne’s Form 10-K report, Form 10-Q reports, and Form 8-K reports. We disclaim any obligation other than as required by law to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors or for new information, data or methods, future events or other changes.

Use of Non-GAAP Financial Measures and Other Metrics

This press release contains certain non-GAAP financial measures that management believes are helpful in understanding the Company’s business, as further discussed within this press release. These financial measures, which include Funds From Operations, Normalized Funds From Operations, Normalized Funds From Operations per Diluted Common Share, Adjusted EBITDA, Net Operating Income, and Net Debt should not be construed as being more important than, or a substitute for, comparable GAAP financial measures. Detailed reconciliations of these non-GAAP financial measures to comparable GAAP financial measures have been included in the tables that accompany this release and are available in the Investor Relations section of www.cyrusone.com.

Management uses FFO, Normalized FFO, Normalized FFO per Diluted Common Share, Adjusted EBITDA, and NOI, which are non-GAAP financial measures commonly used in the real estate investments trusts (REIT) industry, as supplemental performance measures. Management uses these measures as supplemental performance measures because, when compared period over period, they capture trends in occupancy rates, rental rates and operating costs. The Company also believes that, as widely recognized measures of the performance of REITs, these measures are used by investors as a basis to evaluate REITs. Other REITs may not calculate these measures in the same manner, and, as presented, they may not be comparable to others. Therefore, FFO, Normalized FFO, NOI, and Adjusted EBITDA should be considered only as supplements to net income (loss) presented in accordance with GAAP as measures of our performance. FFO, Normalized FFO, NOI, and Adjusted EBITDA should not be used as measures of our liquidity or as indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. These measures also should not be used as supplements to or substitutes for cash flow from operating activities computed in accordance with GAAP. The Company believes that Net Debt provides a useful measure of liquidity and financial health.

1Net income (loss) per diluted common share is defined as Net income (loss) divided by the weighted average diluted common shares outstanding for the period, which were 124.3 million for the third quarter of 2021 and 118.7 million for the third quarter of 2020.

2We use Net Operating Income (“NOI”), which is a non-GAAP financial measure commonly used in the REIT industry, as a supplemental performance measure. We use NOI as a supplemental performance measure because, when compared period over period, it captures trends in occupancy rates, rental rates and operating expenses. We also believe that, as a widely recognized measure of the performance of REITs, NOI is used by investors as a basis to evaluate REITs.

We calculate NOI as Net income (loss), adjusted for Sales and marketing expenses, General and administrative expenses, Depreciation and amortization expenses, Transaction, acquisition, integration and other related expenses, Interest expense, net, Gain on marketable equity investment, Loss on early extinguishment of debt, Impairment losses and loss on asset disposals, Foreign currency and derivative (gains) losses, net, Other (expense) income and Income tax benefit. Amortization of deferred leasing costs is presented in Depreciation and amortization expenses, which is excluded from NOI. Sales and marketing expenses are not property-specific, rather these expenses support our entire portfolio. As a result, we have excluded these Sales and marketing expenses from our NOI calculation, consistent with the treatment of General and administrative expenses, which also support our entire portfolio. Because the calculation of NOI excludes various expenses, the utility of NOI as a measure of our performance is limited. Other REITs may not calculate NOI in the same manner. Accordingly, our NOI may not be comparable to others. Therefore, NOI should be considered only as a supplement to Net income (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 pay dividends and make distributions. NOI also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

3Adjusted EBITDA, which is a non-GAAP financial measure, is defined as Net income (loss) as defined by GAAP adjusted for Interest expense, net; Income tax (benefit) expense; Depreciation and amortization expenses; Impairment losses and loss on asset disposals; Transaction, acquisition, integration and other related expenses; Legal claim costs; Stock-based compensation expense; Cash severance and management transition costs; Severance-related stock compensation costs; Loss on early extinguishment of debt; Gain on marketable equity investment; Foreign currency and derivative (gains) losses, net and Other expense (income). Other companies may not calculate Adjusted EBITDA in the same manner. Accordingly, the Company’s Adjusted EBITDA as presented may not be comparable to others.

4We use funds from operations (“FFO”) and normalized funds from operations (“Normalized FFO”), which are non-GAAP financial measures commonly used in the REIT industry, as supplemental performance measures. We use FFO and Normalized FFO as supplemental performance measures because, when compared period over period, they capture trends in occupancy rates, rental rates and operating costs. We also believe that, as widely recognized measures of the performance of REITs, FFO and Normalized FFO are used by investors as a basis to evaluate REITs.

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

We calculate Normalized FFO as FFO adjusted for Loss on early extinguishment of debt; Gain on marketable equity investment; Foreign currency and derivative (gains) losses, net; Amortization of tradenames; Transaction, acquisition, integration and other related expenses; Cash severance and management transition costs; Severance-related stock compensation costs; and Legal claim costs. We believe our Normalized FFO calculation provides a comparable measure between different periods. Other REITs may not calculate Normalized FFO in the same manner, accordingly, our Normalized FFO may not be comparable to others.

In addition, because FFO and Normalized FFO exclude Real estate depreciation and amortization, and capture neither the changes in the value of our properties that result from use or from market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations, the utility of FFO and Normalized FFO as measures of our performance is limited. Therefore, FFO and Normalized FFO should be considered only as supplements to Net income (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 pay dividends or make distributions. FFO and Normalized FFO also should not be used as supplements to or substitutes for cash flow from operating activities computed in accordance with GAAP.

5Annualized GAAP revenue is equal to monthly recurring rent, defined as average monthly contractual rent during the term of the lease plus the monthly impact of installation charges, multiplied by 12. It can be shown both inclusive and exclusive of the Company’s estimate of customer reimbursements for metered power.

6Recurring rent churn percentage is calculated as any reduction in recurring rent due to customer terminations, service reductions or net pricing decreases as a percentage of rent at the beginning of the period, excluding any impact from metered power reimbursements or other usage-based billing.

7Percentage CSF leased is calculated by dividing CSF under signed leases for colocation space (whether or not the lease has commenced billing) by total CSF. Percentage CSF leased differs from percentage CSF occupied presented in the Data Center Portfolio table because the leased rate includes CSF for signed leases that have not commenced billing.

8Stabilized properties include data halls that have been in service for at least 24 months or are at least 85% leased.

9Gross asset value is defined as total assets plus accumulated depreciation.

10Long-term debt and net debt exclude adjustments for deferred financing costs and bond discounts / premiums. Net debt, which is a non-GAAP financial measure, provides a useful measure of liquidity and financial health. The Company defines net debt as long-term debt and finance lease liabilities, offset by cash and cash equivalents.

11Liquidity is calculated as cash, cash equivalents, and temporary cash investments on hand, plus the undrawn capacity on CyrusOne’s revolving credit facility, plus the pro forma impact of the net proceeds from the settlement of the forward sale agreements.

About CyrusOne

CyrusOne (NASDAQ: CONE) is a premier global REIT specializing in design, construction and operation of more than 50 high-performance data centers worldwide. The Company provides mission-critical facilities that ensure the continued operation of IT infrastructure for approximately 1,000 customers, including approximately 200 Fortune 1000 companies.

A leader in hybrid-cloud and multi-cloud deployments, CyrusOne offers colocation, hyperscale, and build-to-suit environments that help customers enhance the strategic connection of their essential data infrastructure and support achievement of sustainability goals. CyrusOne data centers offer world-class flexibility, enabling clients to modernize, simplify, and rapidly respond to changing demand. Combining exceptional financial strength with a broad global footprint, CyrusOne provides customers with long-term stability and strategic advantage at scale.

Company Profile

CyrusOne (NASDAQ: CONE) specializes in highly reliable enterprise-class, carrier-neutral data center properties. The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers, including approximately 200 Fortune 1000 companies. CyrusOne’s data center offerings provide the flexibility, reliability, and security that enterprise customers require and are delivered through a tailored, customer service-focused platform designed to foster long-term relationships. CyrusOne is committed to full transparency in communication, management, and service delivery throughout its more than 50 data centers worldwide.

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

Corporate Headquarters

Senior Management

2850 N. Harwood St., Ste. 2200

David Ferdman, Interim President & CEO

Brent Behrman, EVP of Sales

Dallas, Texas 75201

Katherine Motlagh, EVP & Chief Financial Officer

Matt Pullen, EVP & Managing Director, Europe

Phone: (972) 350-0060

John Hatem, EVP & Chief Operating Officer

Robert M. Jackson, EVP General Counsel & Secretary

Website: www.cyrusone.com

 

 

Analyst Coverage

Firm

Analyst

Phone Number

BofA Securities

Michael J. Funk

(646) 855-5664

Barclays

Brendan Lynch

(212) 526 9428

Berenberg Capital Markets

Nate Crossett

(646) 949-9030

BMO Capital Markets

Ari Klein

(212) 885-4103

Citi

Mike Rollins

(212) 816-1116

Cowen and Company

Colby Synesael

(646) 562-1355

Credit Suisse

Sami Badri

(212) 538-1727

Deutsche Bank

Matthew Niknam

(212) 250-4711

Evercore ISI

Irvin Liu

(415) 800-0183

Green Street

David Guarino

(949) 640-8780

Jefferies

Jonathan Petersen

(212) 284-1705

J.P. Morgan

Richard Choe

(212) 622-6708

KeyBanc Capital Markets

Jordan Sadler

(917) 368-2280

MoffettNathanson

Nick Del Deo, CFA

(212) 519-0025

Morgan Stanley

Simon Flannery

(212) 761-6432

RBC Capital Markets

Jonathan Atkin

(415) 633-8589

Raymond James

Frank G. Louthan IV

(404) 442-5867

Stifel

Erik Rasmussen

(212) 271-3461

TD Securities Inc.

Jonathan Kelcher, CFA

(416) 307-9931

Truist

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

Wolfe Research

Andrew Rosivach, CFA

(646) 582-9250

 

CyrusOne Inc.

Summary of Financial Data

(Dollars in millions, except per share amounts)

 

 

Three Months

 

 

September 30,

June 30,

September 30,

Growth %

 

2021

2021

2020

Yr/Yr

Revenue

$

304.1

 

$

284.6

 

$

262.8

 

16

%

Net operating income

170.7

 

162.8

 

153.1

 

11

%

Net income (loss)

6.7

 

7.4

 

(37.3

)

n/m

 

Funds from Operations (“FFO”) – Nareit defined

132.3

 

129.0

 

82.2

 

61

%

Normalized Funds from Operations (“Normalized FFO”)

127.2

 

123.1

 

114.4

 

11

%

Weighted average number of common shares outstanding – diluted for Normalized FFO

124.3

 

122.7

 

119.2

 

4

%

Net income (loss) per share – basic

$

0.05

 

$

0.06

 

$

(0.32

)

n/m

 

Net income (loss) per share – diluted

$

0.05

 

$

0.06

 

$

(0.32

)

n/m

 

Normalized FFO per diluted common share

$

1.02

 

$

1.00

 

$

0.96

 

6

%

Adjusted EBITDA

$

149.2

 

$

141.9

 

$

132.2

 

13

%

Adjusted EBITDA as a % of Revenue

49.1

%

49.9

%

50.3

%

(1.2) pts

 

As of

 

 

September 30,

June 30,

September 30,

Growth %

 

2021

2021

2020

Yr/Yr

Balance Sheet Data

 

 

 

 

Gross investment in real estate

$

7,635.4

 

$

7,518.8

 

$

6,791.6

 

12

%

Accumulated depreciation

(2,080.4

)

(1,977.8

)

(1,663.4

)

25

%

Total investment in real estate, net

5,555.0

 

5,541.0

 

5,128.2

 

8

%

Cash and cash equivalents

456.4

 

369.7

 

156.5

 

n/m

 

Market value of common equity

9,824.4

 

8,869.3

 

8,433.2

 

16

%

Long-term debt

3,559.0

 

3,587.8

 

3,236.3

 

10

%

Net debt

3,259.8

 

3,380.9

 

3,109.0

 

5

%

Total enterprise value

13,084.2

 

12,250.2

 

11,542.2

 

13

%

Net debt to LQA Adjusted EBITDA(a)

5.0x

5.0x

5.1x

(0.1)x

 

 

 

 

 

Dividend Activity

 

 

 

 

Dividends per share

$

0.52

 

$

0.51

 

$

0.51

 

2

%

 

 

 

 

 

Portfolio Statistics

 

 

 

 

Data centers

56

 

54

 

51

 

10

%

Stabilized CSF (000)

4,789

 

4,611

 

4,134

 

16

%

Stabilized CSF % leased

86

%

86

%

87

%

(1) pts

Total CSF (000)

5,050

 

4,889

 

4,471

 

13

%

Total CSF % leased

84

%

83

%

84

%

— pts

Total GSF (000)

8,601

 

8,346

 

7,710

 

12

%

(a)

Adjusted to reflect the pro forma impact of the net proceeds from the settlement of the forward sale agreements.

 

CyrusOne Inc.

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share amounts)

(Unaudited)

   

 

Three Months

 

 

 

Nine Months

 

 

 

Ended September 30,

Change

 

Ended September 30,

Change

 

2021

2020

$

%

 

2021

2020

$

%

Revenue(a)

$

304.1

 

$

262.8

 

$

41.3

 

16

%

 

$

887.3

 

$

765.1

 

$

122.2

 

16

%

Operating expenses:

 

 

 

 

 

 

 

 

 

Property operating expenses

133.4

 

109.7

 

23.7

 

22

%

 

391.0

 

301.3

 

89.7

 

30

%

Sales and marketing

3.6

 

4.5

 

(0.9

)

(20

)%

 

11.1

 

13.0

 

(1.9

)

(15

)%

General and administrative

30.8

 

29.7

 

1.1

 

4

%

 

70.4

 

76.9

 

(6.5

)

(8

)%

Depreciation and amortization

127.5

 

113.1

 

14.4

 

13

%

 

372.6

 

330.9

 

41.7

 

13

%

Transaction, acquisition, integration and other related expenses

0.2

 

1.6

 

(1.4

)

(88

)%

 

0.4

 

2.2

 

(1.8

)

(82

)%

Impairment losses and loss on asset disposals

0.1

 

8.8

 

(8.7

)

(99

)%

 

0.7

 

11.1

 

(10.4

)

(94

)%

Total operating expenses

295.6

 

267.4

 

267.4

 

11

%

 

846.2

 

735.4

 

110.8

 

15

%

Operating income (loss)

8.5

 

(4.6

)

(226.1

)

n/m

 

 

41.1

 

29.7

 

11.4

 

38

%

Interest expense, net

(17.3

)

(13.3

)

(4.0

)

30

%

 

(47.2

)

(43.2

)

(4.0

)

9

%

Gain on marketable equity investment

 

4.7

 

(4.7

)

(100

)%

 

2.4

 

69.8

 

(67.4

)

(97

)%

Loss on early extinguishment of debt

 

(3.1

)

3.1

 

(100

)%

 

 

(6.5

)

6.5

 

(100

)%

Foreign currency and derivative gains (losses), net

14.4

 

(22.9

)

37.3

 

n/m

 

 

31.2

 

(31.7

)

62.9

 

n/m

 

Other expense (income)

0.1

 

 

0.1

 

n/m

 

 

(0.1

)

 

(0.1

)

n/m

 

Net income (loss) before income taxes

5.7

 

(39.2

)

(194.3

)

n/m

 

 

27.4

 

18.1

 

9.3

 

51

%

Income tax benefit

1.0

 

1.9

 

(0.9

)

(47

)%

 

4.9

 

4.3

 

0.6

 

14

%

Net income (loss)

$

6.7

 

$

(37.3

)

$

44.0

 

n/m

 

 

$

32.3

 

$

22.4

 

$

9.9

 

44

%

Net income (loss) per share – basic

$

0.05

 

$

(0.32

)

$

0.37

 

n/m

 

 

$

0.26

 

$

0.19

 

$

0.07

 

37

%

Net income (loss) per share – diluted

$

0.05

 

$

(0.32

)

$

0.37

 

n/m

 

 

$

0.26

 

$

0.19

 

$

0.07

 

37

%

(a)

Revenue includes metered power reimbursements of $62.5 million and $44.6 million for the three months ended September 30, 2021 and 2020, respectively, and includes metered power reimbursements of $188.6 million and $116.5 million for the nine months ended September 30, 2021 and 2020, respectively.

 

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

 

 

September 30,

December 31,

Change

 

2021

2020

$

%

Assets

 

 

 

 

Investment in real estate:

 

 

 

 

Land

$

211.6

 

$

208.8

 

$

2.8

 

1

%

Buildings and improvements

2,336.3

 

2,035.2

 

301.1

 

15

%

Equipment

4,064.7

 

3,538.9

 

525.8

 

15

%

Gross operating real estate

6,612.6

 

5,782.9

 

829.7

 

14

%

Less accumulated depreciation

(2,080.4

)

(1,767.9

)

(312.5

)

18

%

Net operating real estate

4,532.2

 

4,015.0

 

517.2

 

13

%

Construction in progress, including land under development

729.8

 

982.2

 

(252.4

)

(26

)%

Land held for future development

293.0

 

268.3

 

24.7

 

9

%

Total investment in real estate, net

5,555.0

 

5,265.5

 

289.5

 

5

%

Cash and cash equivalents

456.4

 

271.4

 

185.0

 

68

%

Rent and other receivables (net of allowance for doubtful accounts of $2.1 and $3.5 as of September 30, 2021 and December 31, 2020, respectively)

409.2

 

334.2

 

75.0

 

22

%

Restricted cash

24.3

 

1.5

 

22.8

 

n/m

 

Operating lease right-of-use assets, net

148.5

 

211.4

 

(62.9

)

(30

)%

Equity investments

30.3

 

67.1

 

(36.8

)

(55

)%

Goodwill

455.1

 

455.1

 

 

%

Intangible assets (net of accumulated amortization of $272.5 and $249.3 as of September 30, 2021 and December 31, 2020, respectively)

132.7

 

157.8

 

(25.1

)

(16

)%

Other assets

128.0

 

133.4

 

(5.4

)

(4

)%

Total assets

$

7,339.5

 

$

6,897.4

 

$

442.1

 

6

%

Liabilities and equity

 

 

 

 

Debt

$

3,515.1

 

$

3,409.0

 

$

106.1

 

3

%

Finance lease liabilities

157.2

 

29.1

 

128.1

 

n/m

 

Operating lease liabilities

183.9

 

249.1

 

(65.2

)

(26

)%

Construction costs payable

104.6

 

133.0

 

(28.4

)

(21

)%

Accounts payable and accrued expenses

192.1

 

151.3

 

40.8

 

27

%

Dividends payable

66.3

 

63.3

 

3.0

 

5

%

Deferred revenue and prepaid rents

227.9

 

174.1

 

53.8

 

31

%

Deferred tax liability

41.9

 

53.0

 

(11.1

)

(21

)%

Other liabilities

45.0

 

77.3

 

(32.3

)

(42

)%

Total liabilities

4,534.0

 

4,339.2

 

194.8

 

4

%

Commitments and contingencies

 

 

 

 

Stockholders’ equity

 

 

 

 

Preferred stock, $0.01 par value, 100,000,000 authorized; no shares issued or outstanding

 

 

 

n/m

 

Common stock, $0.01 par value, 500,000,000 shares authorized and 126,913,710 and 120,442,521 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

1.3

 

1.2

 

0.1

 

8

%

Additional paid in capital

3,952.7

 

3,537.3

 

415.4

 

12

%

Accumulated deficit

(1,125.3

)

(966.6

)

(158.7

)

16

%

Accumulated other comprehensive loss

(23.2

)

(13.7

)

(9.5

)

69

%

Total stockholders’ equity

2,805.5

 

2,558.2

 

247.3

 

10

%

Total liabilities and equity

$

7,339.5

 

$

6,897.4

 

$

442.1

 

6

%

 

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,

 

2021

2021

2021

2020

2020

Revenue(a)

$

304.1

 

$

284.6

 

$

298.6

 

$

268.4

 

$

262.8

 

Operating expenses:

 

 

 

 

 

Property operating expenses

133.4

 

121.8

 

135.8

 

110.3

 

109.7

 

Sales and marketing

3.6

 

3.7

 

3.8

 

5.3

 

4.5

 

General and administrative

30.8

 

16.6

 

23.0

 

22.4

 

29.7

 

Depreciation and amortization

127.5

 

123.7

 

121.4

 

118.5

 

113.1

 

Transaction, acquisition, integration and other related expenses

0.2

 

0.1

 

0.1

 

1.5

 

1.6

 

Impairment losses and loss on asset disposals

0.1

 

0.1

 

0.5

 

 

8.8

 

Total operating expenses

295.6

 

266.0

 

284.6

 

258.0

 

267.4

 

Operating income (loss)

8.5

 

18.6

 

14.0

 

10.4

 

(4.6

)

Interest expense, net

(17.3

)

(14.8

)

(15.1

)

(14.5

)

(13.3

)

Gain on marketable equity investment

 

 

2.4

 

19.7

 

4.7

 

Loss on early extinguishment of debt

 

 

 

 

(3.1

)

Foreign currency and derivative gains (losses), net

14.4

 

1.4

 

15.4

 

4.1

 

(22.9

)

Other expense (income)

0.1

 

(0.1

)

(0.1

)

 

 

Net income (loss) before income taxes

5.7

 

5.1

 

16.6

 

19.7

 

(39.2

)

Income tax benefit (expense)

1.0

 

2.3

 

1.6

 

(0.7

)

1.9

 

Net income (loss)

$

6.7

 

$

7.4

 

$

18.2

 

$

19.0

 

$

(37.3

)

Net income (loss) per share – basic

$

0.05

 

$

0.06

 

$

0.15

 

$

0.15

 

$

(0.32

)

Net income (loss) per share – diluted

$

0.05

 

$

0.06

 

$

0.15

 

$

0.15

 

$

(0.32

)

(a)

Revenue includes metered power reimbursements of $62.5 million, $53.0 million, $73.1 million, $44.9 million and $44.6 million for the three months ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively.

 

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

 

 

September 30,

June 30,

March 31,

December 31,

September 30,

 

2021

2021

2021

2020

2020

Assets

 

 

 

 

 

Investment in real estate:

 

 

 

 

 

Land

$

211.6

 

$

212.8

 

$

207.3

 

$

208.8

 

$

181.2

 

Buildings and improvements

2,336.3

 

2,253.8

 

2,046.6

 

2,035.2

 

1,918.4

 

Equipment

4,064.7

 

3,869.0

 

3,596.5

 

3,538.9

 

3,341.7

 

Gross operating real estate

6,612.6

 

6,335.6

 

5,850.4

 

5,782.9

 

5,441.3

 

Less accumulated depreciation

(2,080.4

)

(1,977.8

)

(1,867.5

)

(1,767.9

)

(1,663.4

)

Net operating real estate

4,532.2

 

4,357.8

 

3,982.9

 

4,015.0

 

3,777.9

 

Construction in progress, including land under development

729.8

 

917.3

 

1,053.3

 

982.2

 

1,085.9

 

Land held for future development

293.0

 

265.9

 

262.3

 

268.3

 

264.4

 

Total investment in real estate, net

5,555.0

 

5,541.0

 

5,298.5

 

5,265.5

 

5,128.2

 

Cash and cash equivalents

456.4

 

369.7

 

240.9

 

271.4

 

156.5

 

Rent and other receivables, net

409.2

 

409.4

 

389.8

 

334.2

 

306.9

 

Restricted cash

24.3

 

24.8

 

1.4

 

1.5

 

1.4

 

Operating lease right-of-use assets, net

148.5

 

155.0

 

239.7

 

211.4

 

206.9

 

Equity investments

30.3

 

30.0

 

22.9

 

67.1

 

178.1

 

Goodwill

455.1

 

455.1

 

455.1

 

455.1

 

455.1

 

Intangible assets, net

132.7

 

141.2

 

149.2

 

157.8

 

166.4

 

Other assets

128.0

 

115.0

 

114.3

 

133.4

 

112.8

 

Total assets

$

7,339.5

 

$

7,241.2

 

$

6,911.8

 

$

6,897.4

 

$

6,712.3

 

Liabilities and equity

 

 

 

 

 

Debt

$

3,515.1

 

$

3,541.6

 

$

3,337.4

 

$

3,409.0

 

$

3,197.8

 

Finance lease liabilities

157.2

 

162.8

 

28.6

 

29.1

 

29.2

 

Operating lease liabilities

183.9

 

190.5

 

277.9

 

249.1

 

244.3

 

Construction costs payable

104.6

 

157.7

 

137.5

 

133.0

 

168.2

 

Accounts payable and accrued expenses

192.1

 

147.7

 

168.9

 

151.3

 

145.3

 

Dividends payable

66.3

 

63.6

 

62.0

 

63.3

 

63.1

 

Deferred revenue and prepaid rents

227.9

 

217.1

 

183.2

 

174.1

 

166.8

 

Deferred tax liability

41.9

 

45.3

 

48.2

 

53.0

 

55.4

 

Other liabilities

45.0

 

58.3

 

53.3

 

77.3

 

37.8

 

Total liabilities

4,534.0

 

4,584.6

 

4,297.0

 

4,339.2

 

4,107.9

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Preferred stock, $0.01 par value, 100,000,000 authorized; no shares issued or outstanding

 

 

 

 

 

Common stock, $0.01 par value, 500,000,000 shares authorized and 126,913,710 and 120,442,521 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

1.3

 

1.2

 

1.2

 

1.2

 

1.2

 

Additional paid in capital

3,952.7

 

3,731.3

 

3,628.6

 

3,537.3

 

3,532.9

 

Accumulated deficit

(1,125.3

)

(1,066.1

)

(1,010.2

)

(966.6

)

(923.9

)

Accumulated other comprehensive loss

(23.2

)

(9.8

)

(4.8

)

(13.7

)

(5.8

)

Total stockholders’ equity

2,805.5

 

2,656.6

 

2,614.8

 

2,558.2

 

2,604.4

 

Total liabilities and equity

$

7,339.5

 

$

7,241.2

 

$

6,911.8

 

$

6,897.4

 

$

6,712.3

 

 

CyrusOne Inc.

Condensed Consolidated Statements of Cash Flows

(Dollars in millions)

(Unaudited)

 

 

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

Cash flows from operating activities:

 

 

 

 

Net income (loss)

$

32.3

 

$

22.4

 

$

6.7

 

$

(37.3

)

Adjustments to reconcile Net income (loss) to Net cash provided by operating activities

 

 

 

 

Depreciation and amortization

372.6

 

330.9

 

127.5

 

113.1

 

Provision for bad debt expense

(1.0

)

0.3

 

(0.1

)

0.3

 

Gain on marketable equity investment

(2.4

)

(69.8

)

 

(4.7

)

Foreign currency and derivative (gains) losses, net

(31.2

)

31.7

 

(14.4

)

22.9

 

Proceeds from swap terminations

 

2.9

 

 

 

Impairment losses and loss on asset disposals

0.7

 

11.1

 

0.1

 

8.9

 

Loss on early extinguishment of debt

 

6.5

 

 

3.1

 

Interest expense amortization, net

5.7

 

5.2

 

2.2

 

1.6

 

Stock-based compensation expense

17.2

 

13.7

 

8.5

 

6.7

 

Deferred income tax benefit

(8.0

)

(7.1

)

(2.0

)

(2.9

)

Operating lease cost

15.3

 

15.0

 

5.0

 

2.0

 

Other (expense) income

(0.2

)

0.6

 

(0.1

)

0.1

 

 

 

 

 

 

Change in operating assets and liabilities:

 

 

 

 

Rent and other receivables, net and other assets

(90.6

)

(29.1

)

(22.1

)

1.9

 

Accounts payable and accrued expenses

42.9

 

22.0

 

46.2

 

17.3

 

Deferred revenue and prepaid rents

54.3

 

2.3

 

11.8

 

0.3

 

Operating lease liabilities

(18.2

)

(16.7

)

(6.0

)

(5.6

)

Net cash provided by operating activities

389.4

 

341.9

 

163.3

 

127.7

 

Cash flows from investing activities:

 

 

 

 

Investments in real estate

(580.2

)

(692.2

)

(218.5

)

(234.2

)

Proceeds from sale of equity investments

46.6

 

31.8

 

 

23.6

 

Equity investments

(7.4

)

(6.5

)

(0.3

)

(1.8

)

Proceeds from the sale of real estate assets

4.4

 

0.3

 

 

 

Net cash used in investing activities

(536.6

)

(666.6

)

(218.8

)

(212.4

)

Cash flows from financing activities:

 

 

 

 

Issuance of common stock, net

407.9

 

325.9

 

213.7

 

222.6

 

Dividends paid

(187.9

)

(174.7

)

(63.2

)

(58.6

)

Proceeds from revolving credit facility

173.4

 

595.5

 

 

156.7

 

Repayments of revolving credit facility

(610.5

)

(966.7

)

 

(243.6

)

Proceeds from Euro bond

603.1

 

561.2

 

 

11.0

 

Proceeds from unsecured term loan

 

1,100.0

 

 

 

Repayments of unsecured term loan

 

(1,400.0

)

 

(300.0

)

Proceeds from issuance of senior notes

 

395.2

 

 

395.2

 

Payment of deferred financing costs

(5.0

)

(15.1

)

 

(2.6

)

Payments on finance lease liabilities

(3.5

)

(2.0

)

(1.3

)

(0.7

)

Tax payment upon exercise of equity awards

(9.6

)

(8.6

)

(0.7

)

(2.2

)

Net cash provided by financing activities

367.9

 

410.7

 

148.5

 

177.8

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(12.9

)

(5.8

)

(6.8

)

(7.2

)

Net increase in cash, cash equivalents and restricted cash

207.8

 

80.2

 

86.2

 

85.9

 

Cash, cash equivalents and restricted cash at beginning of period

272.9

 

77.7

 

394.5

 

72.0

 

Cash, cash equivalents and restricted cash at end of period

$

480.7

 

$

157.9

 

$

480.7

 

$

157.9

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

Cash paid for interest, including amounts capitalized of $15.6 million and $17.0 million in 2021 and 2020, respectively

$

45.8

 

$

36.3

 

$

3.6

 

$

6.3

 

Cash paid for income taxes

4.0

 

3.2

 

0.8

 

3.1

 

Non-cash investing and financing activities:

 

 

 

 

Construction costs payable

104.6

 

168.2

 

104.6

 

168.2

 

Dividends payable

66.3

 

63.1

 

66.3

 

63.1

 

 

CyrusOne Inc.

Reconciliation of Net income (loss) to Net Operating Income

(Dollars in millions)

(Unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

Change

September 30,

Change

2021

2020

$

%

2021

2020

$

%

Net income (loss)

$

6.7

 

$

(37.3

)

$

44.0

 

n/m

 

$

32.3

 

$

22.4

 

$

9.9

 

44

%

Sales and marketing expenses

3.6

 

4.5

 

(0.9

)

(20

)%

11.1

 

13.0

 

(1.9

)

(15

)%

General and administrative expenses

30.8

 

29.7

 

1.1

 

4

%

70.4

 

76.9

 

(6.5

)

(8

)%

Depreciation and amortization expenses

127.5

 

113.1

 

14.4

 

13

%

372.6

 

330.9

 

41.7

 

13

%

Transaction, acquisition, integration and other related expenses

0.2

 

1.6

 

(1.4

)

(88

)%

0.4

 

2.2

 

(1.8

)

(82

)%

Interest expense, net

17.3

 

13.3

 

4.0

 

30

%

47.2

 

43.2

 

4.0

 

9

%

Gain on marketable equity investment

 

(4.7

)

4.7

 

(100

)%

(2.4

)

(69.8

)

67.4

 

(97

)%

Loss on early extinguishment of debt

 

3.1

 

(3.1

)

(100

)%

 

6.5

 

(6.5

)

(100

)%

Impairment losses and loss on asset disposals

0.1

 

8.8

 

(8.7

)

(99

)%

0.7

 

11.1

 

(10.4

)

(94

)%

Foreign currency and derivative (gains) losses, net

(14.4

)

22.9

 

(37.3

)

n/m

 

(31.2

)

31.7

 

(62.9

)

n/m

 

Other (expense) income

(0.1

)

 

(0.1

)

n/m

 

0.1

 

 

0.1

 

n/m

 

Income tax benefit

(1.0

)

(1.9

)

0.9

 

(47

)%

(4.9

)

(4.3

)

(0.6

)

14

%

Net Operating Income

$

170.7

 

$

153.1

 

$

17.6

 

11

%

$

496.3

 

$

463.8

 

$

32.5

 

7

%

 

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,

 

2021

2020

$

%

2021

2021

2021

2020

2020

Net Operating Income

 

 

 

 

 

 

 

 

 

Revenue

$

887.3

 

$

765.1

 

$

122.2

 

16

%

$

304.1

 

$

284.6

 

$

298.6

 

$

268.4

 

$

262.8

 

Property operating expenses

391.0

 

301.3

 

89.7

 

30

%

133.4

 

121.8

 

135.8

 

110.3

 

109.7

 

Net Operating Income (NOI)

$

496.3

 

$

463.8

 

$

32.5

 

7

%

$

170.7

 

$

162.8

 

$

162.8

 

$

158.1

 

$

153.1

 

NOI as a % of Revenue

55.9

%

60.6

%

 

 

56.1

%

57.2

%

54.5

%

58.9

%

58.3

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Net income (loss)

$

32.3

 

$

22.4

 

$

9.9

 

44

%

$

6.7

 

$

7.4

 

$

18.2

 

$

19.0

 

$

(37.3

)

Interest expense, net

47.2

 

43.2

 

4.0

 

9

%

17.3

 

14.8

 

15.1

 

14.5

 

13.3

 

Income tax (benefit) expense

(4.9

)

(4.3

)

(0.6

)

14

%

(1.0

)

(2.3

)

(1.6

)

0.7

 

(1.9

)

Depreciation and amortization expenses

372.6

 

330.9

 

41.7

 

13

%

127.5

 

123.7

 

121.4

 

118.5

 

113.1

 

Impairment losses and loss on asset disposals

0.7

 

11.1

 

(10.4

)

(94

)%

0.1

 

0.1

 

0.5

 

 

8.8

 

EBITDA (Nareit definition)(a)

$

447.9

 

$

403.3

 

$

44.6

 

11

%

$

150.6

 

$

143.7

 

$

153.6

 

$

152.7

 

$

96.0

 

 

 

 

 

 

 

 

 

 

 

Transaction, acquisition, integration and other related expenses

0.4

 

2.2

 

(1.8

)

(82

)%

0.2

 

0.1

 

0.1

 

1.5

 

1.6

 

Legal claim costs

(4.9

)

0.3

 

(5.2

)

n/m

 

 

(4.9

)

 

 

0.1

 

Stock-based compensation expense

12.7

 

11.1

 

1.6

 

14

%

4.0

 

4.3

 

4.4

 

4.4

 

4.2

 

Cash severance and management transition costs

4.3

 

13.2

 

(8.9

)

(67

)%

4.4

 

 

(0.1

)

0.9

 

6.4

 

Severance-related stock compensation costs

4.5

 

2.7

 

1.8

 

67

%

4.5

 

 

 

0.2

 

2.6

 

Loss on early extinguishment of debt

 

6.5

 

(6.5

)

(100

)%

 

 

 

 

3.1

 

Gain on marketable equity investment

(2.4

)

(69.8

)

67.4

 

(97

)%

 

 

(2.4

)

(19.7

)

(4.7

)

Foreign currency and derivative (gains) losses, net

(31.2

)

31.7

 

(62.9

)

n/m

 

(14.4

)

(1.4

)

(15.4

)

(4.1

)

22.9

 

Other expense (income)

0.1

 

 

0.1

 

n/m

 

(0.1

)

0.1

 

0.1

 

 

 

Adjusted EBITDA

$

431.4

 

$

401.2

 

$

30.2

 

8

%

$

149.2

 

$

141.9

 

$

140.3

 

$

135.9

 

$

132.2

 

Adjusted EBITDA as a % of Revenue

48.6

%

52.4

%

 

 

49.1

%

49.9

%

47.0

%

50.6

%

50.3

%

(a)

We calculate Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) as GAAP Net income (loss) plus Interest expense, net, Income tax (benefit) expense, Depreciation and amortization expenses and Impairment losses and loss (gain) on asset disposals. While it is consistent with the definition of EBITDAre promulgated by the National Association of Real Estate Investment Trusts (“Nareit”), our computation of EBITDAre may differ from the methodology for calculating EBITDAre used by other REITs. Accordingly, our EBITDAre may not be comparable to others.

 

CyrusOne Inc.

Reconciliation of Net Income (Loss) to FFO and Normalized FFO

(Dollars in millions)

(Unaudited)

 

 

Nine Months Ended

 

 

Three Months Ended

 

September 30,

Change

September 30,

June 30,

March 31,

December 31,

September 30,

2021

2020

$

%

2021

2021

2021

2020

2020

Reconciliation of Net Income (Loss) to FFO and Normalized FFO:

 

 

 

 

 

 

 

 

 

Net income (loss)

$

32.3

 

$

22.4

 

$

9.9

 

44

%

$

6.7

 

$

7.4

 

$

18.2

 

$

19.0

 

$

(37.3

)

Real estate depreciation and amortization

366.0

 

324.0

 

42.0

 

13

%

125.5

 

121.5

 

119.0

 

116.1

 

110.7

 

Impairment losses and loss on asset disposals

0.7

 

11.1

 

(10.4

)

(94

)%

0.1

 

0.1

 

0.5

 

 

8.8

 

Funds from Operations (“FFO”) – Nareit defined

$

399.0

 

$

357.5

 

$

41.5

 

12

%

$

132.3

 

$

129.0

 

$

137.7

 

$

135.1

 

$

82.2

 

 

 

 

 

 

 

 

 

 

 

Loss on early extinguishment of debt

 

6.5

 

(6.5

)

(100

)%

 

 

 

 

3.1

 

Gain on marketable equity investment

(2.4

)

(69.8

)

67.4

 

(97

)%

 

 

(2.4

)

(19.7

)

(4.7

)

Foreign currency and derivative (gains) losses, net

(31.2

)

31.7

 

(62.9

)

n/m

 

(14.4

)

(1.4

)

(15.4

)

(4.1

)

22.9

 

Amortization of tradenames

0.8

 

0.8

 

 

%

0.2

 

0.3

 

0.3

 

0.4

 

0.2

 

Transaction, acquisition, integration and other related expenses

0.4

 

2.2

 

(1.8

)

(82

)%

0.2

 

0.1

 

0.1

 

1.5

 

1.6

 

Cash severance and management transition costs

4.3

 

13.2

 

(8.9

)

(67

)%

4.4

 

 

(0.1

)

0.9

 

6.4

 

Severance-related stock compensation costs

4.5

 

2.7

 

1.8

 

67

%

4.5

 

 

 

0.2

 

2.6

 

Legal claim costs

(4.9

)

0.3

 

(5.2

)

n/m

 

 

(4.9

)

 

 

0.1

 

Normalized Funds from Operations (Normalized FFO)

$

370.5

 

$

345.1

 

$

25.4

 

7

%

$

127.2

 

$

123.1

 

$

120.2

 

$

114.3

 

$

114.4

 

Normalized FFO per diluted common share

$

3.02

 

$

2.96

 

$

0.06

 

2

%

$

1.02

 

$

1.00

 

$

1.00

 

$

0.94

 

$

0.96

 

Weighted average diluted common shares outstanding

122.5

 

116.7

 

5.8

 

5

%

124.3

 

122.7

 

120.5

 

120.6

 

119.2

 

 

 

 

 

 

 

 

 

 

 

Additional Information:

 

 

 

 

 

 

 

 

 

Amortization of deferred financing costs and bond premium / discount

5.7

 

5.2

 

0.5

 

10

%

2.2

 

1.9

 

1.6

 

1.6

 

1.6

 

Stock-based compensation expense

12.7

 

11.1

 

1.6

 

14

%

4.0

 

4.3

 

4.4

 

4.4

 

4.2

 

Non-real estate depreciation and amortization

5.7

 

6.1

 

(0.4

)

(7

)%

1.7

 

1.8

 

2.2

 

2.0

 

2.1

 

Straight line rent adjustments(a)

(6.6

)

(7.0

)

0.4

 

(6

)%

(4.6

)

(3.2

)

1.2

 

(8.0

)

(6.6

)

Straight line rental expense adjustments

0.7

 

(0.6

)

0.4

 

n/m

 

(0.1

)

0.6

 

0.2

 

0.1

 

(0.1

)

Above and below market rent amortization

(0.2

)

(0.3

)

10.7

 

(98

)%

(0.1

)

 

(0.1

)

(0.1

)

(0.1

)

Deferred tax benefit

(8.0

)

(6.9

)

5.0

 

(38

)%

(2.1

)

(3.3

)

(2.6

)

(0.2

)

(2.7

)

Deferred revenue, primarily installation revenue(b)

53.3

 

0.3

 

53.0

 

n/m

 

29.4

 

15.1

 

8.8

 

2.3

 

0.2

 

Leasing commissions

(13.5

)

(10.9

)

(2.6

)

24

%

(4.5

)

(5.1

)

(3.9

)

(4.3

)

(5.3

)

Recurring capital expenditures

(13.7

)

(13.0

)

(0.7

)

5

%

(7.2

)

(3.9

)

(2.6

)

(0.8

)

(3.1

)

(a)

Straight line rent adjustments:

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

 

(b)

Deferred revenue, primarily installation revenue:

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

CyrusOne Inc.

Market Capitalization Summary, Reconciliation of Net Debt and Interest Summary

(Unaudited)

Market Capitalization (as of September 30, 2021)

(dollars in millions)

Shares or

Equivalents

Outstanding

Market Price

as of

September 30, 2021

Market Value

Equivalents

(in millions)

Common shares

126,913,710

$

77.41

 

$

9,824.4

 

Net Debt

 

 

3,259.8

 

Total Enterprise Value (TEV)

 

 

$

13,084.2

 

 

Reconciliation of Net Debt

 

September 30,

June 30,

September 30,

(dollars in millions)

2021

2021

2020

Long-term debt(a)

$

3,559.0

 

$

3,587.8

 

$

3,236.3

 

Finance lease liabilities

157.2

 

162.8

 

29.2

 

Less:

 

 

 

Cash and cash equivalents

(456.4

)

(369.7

)

(156.5

)

Net Debt

$

3,259.8

 

$

3,380.9

 

$

3,109.0

 

(a) Excludes adjustment for deferred financing costs and unamortized bond discounts.

Interest Summary

 

Three Months Ended

 

 

September 30,

June 30,

September 30,

% Change

(dollars in millions)

2021

2021

2020

Yr/Yr

Interest expense and fees, net

$

19.9

 

$

18.8

 

$

17.3

 

15

%

Amortization of deferred financing costs and bond premium / discount

2.2

 

1.9

 

1.6

 

38

%

Capitalized interest

(4.8

)

(5.9

)

(5.6

)

(14

)%

Total interest expense, net

$

17.3

 

$

14.8

 

$

13.3

 

30

%

 

CyrusOne Inc.

Debt Schedule and Debt Covenants

(Unaudited)

 

Debt Schedule (as of September 30, 2021)

 

(dollars in millions)

 

 

 

Long-term debt:

Amount

Interest Rate

Maturity Date

Revolving credit facility – USD(a)

 

USD LIBOR + 100 bps

March 2025(b)

Term loan(c)

800.0

 

USD LIBOR + 120 bps(d)

March 2025(e)

2.900% USD senior notes due 2024

600.0

 

2.900%

November 2024

1.450% EUR senior notes due 2027(f)

579.5

 

1.450%

January 2027

1.125% EUR senior notes due 2028(f)

579.5

 

1.125%

May 2028

3.450% USD senior notes due 2029

600.0

 

3.450%

November 2029

2.150% USD senior notes due 2030

400.0

 

2.150%

November 2030

Total long-term debt(g)

$

3,559.0

 

2.04%(h)

 

 

 

 

 

Weighted average term of debt(b)(e):

5.7

 

years

 

(a)

Revolving credit facility includes 0.20% facility fee on entire revolving credit facility commitment of $1.4 billion.

(b)

Assuming exercise of 12-month extension option.

(c)

$500 million of $800 million synthetically converted into €451 million pursuant to a USD-EUR cross currency swap; $300 million swapped pursuant to USD floating to fixed interest rate swap.

(d)

Interest rate as of September 30, 2021: 1.29%; weighted average interest rate pursuant to swaps: 1.36%.

(e)

Assumes exercise of two 12-month extension options on $100 million tranche.

(f)

Amount outstanding is USD-equivalent of €500 million.

(g)

Excludes adjustment for deferred financing costs and unamortized bond discounts.

(h)

Weighted average interest rate calculated using interest rate on swapped amount.

 

Debt Covenants – Senior Notes (as of September 30, 2021)

 
 

Ratios

Requirement

September 30, 2021

Total Outstanding Indebtedness to Total Assets

≤ 60%

42%

Secured Indebtedness to Total Assets

≤ 40%

2%

Consolidated EBITDA to Interest Expense

≥ 1.50x

6.75x

Total Unencumbered Assets to Unsecured Indebtedness

≥ 150%

245%

 

CyrusOne Inc.

Colocation Square Footage (CSF) and CSF Leased

(Unaudited)

 

 

As of September 30, 2021

As of June 30, 2021

As of September 30, 2020

Market

Colocation Space

(CSF)(a)

(000)

CSF Leased(b)

Colocation

Space (CSF)(a)

(000)

CSF Leased(b)

Colocation

Space (CSF)(a)

(000)

CSF Leased(b)

Northern Virginia

1,268

 

92

%

1,217

 

91

%

1,166

 

93

%

Phoenix

643

 

97

%

581

 

99

%

581

 

92

%

Dallas

621

 

70

%

621

 

67

%

621

 

71

%

San Antonio

434

 

97

%

434

 

97

%

367

 

96

%

Cincinnati

405

 

68

%

402

 

68

%

402

 

73

%

New York Metro

349

 

68

%

345

 

72

%

290

 

79

%

Houston

308

 

51

%

308

 

53

%

308

 

62

%

Chicago

203

 

81

%

203

 

80

%

203

 

79

%

Austin

106

 

68

%

106

 

69

%

106

 

77

%

Raleigh-Durham

94

 

100

%

94

 

100

%

94

 

95

%

Council Bluffs, Iowa

42

 

15

%

42

 

15

%

 

%

Total – Domestic

4,472

 

82

%

4,351

 

81

%

4,138

 

84

%

Frankfurt

268

 

99

%

252

 

100

%

144

 

99

%

London

167

 

99

%

167

 

90

%

148

 

83

%

Dublin

76

 

100

%

76

 

100

%

 

%

Amsterdam

39

 

100

%

39

 

100

%

39

 

100

%

Paris

26

 

100

%

 

%

 

%

Singapore

3

 

20

%

3

 

20

%

3

 

20

%

Total – International

578

 

99

%

537

 

96

%

334

 

91

%

Total – Portfolio

5,050

 

84

%

4,889

 

83

%

4,471

 

84

%

Stabilized Properties(c)

4,789

 

86

%

4,611

 

86

%

4,134

 

87

%

(a)

CSF represents the GSF at an operating facility that is currently leased or readily available for lease as colocation space, where customers locate their servers and other IT equipment. May not sum to total due to rounding.

(b)

CSF Leased is calculated by dividing CSF under signed leases for colocation space (whether or not the lease has commenced billing) by total CSF.

(c)

Stabilized properties include data halls that have been in service for at least 24 months or are at least 85% leased.

 

CyrusOne Inc.

2021 Guidance

 

Category

Previous

2021 Guidance

Revised

2021 Guidance

Total Revenue

$1,155 – 1,185 million

$1,180 – 1,200 million

Lease and Other Revenues from Customers

$930 – 950 million

$940 – 950 million

Metered Power Reimbursements

$225 – 235 million

$240 – 250 million

Adjusted EBITDA

$575 – 590 million

$585 – 590 million

Normalized FFO per diluted common share

$3.95 – 4.05

$4.03 – 4.08

Capital Expenditures

$875 – 975 million

$900 – 950 million

Development(1)

$855 – 935 million

$875 – 915 million

Recurring

$20 – 40 million

$25 – 35 million

(1) Development capital expenditures include the acquisition of land for future development.

CyrusOne is updating its guidance for full year 2021, increasing the lower and upper ends of its guidance ranges for Total Revenue and Normalized FFO per diluted common share, increasing the lower end of its guidance range for Adjusted EBITDA, and narrowing the guidance range for Capital Expenditures. 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. We continue to monitor the global outbreak of COVID-19 and to take steps to mitigate the potential risks to us posed by the pandemic. While the impact on our business has not been significant to date, the length and severity of the effects of the pandemic remain uncertain and unpredictable and could be materially adverse to our business, financial condition, results of operations, cash flows and ability to pay dividends as well as the market price of our common stock.

CyrusOne does not provide forward-looking guidance for GAAP financial measures (other than Total Revenue and Capital Expenditures) or reconciliations for the non-GAAP financial measures included in the annual guidance provided above due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including Net income (loss) and adjustments that could be made for Transaction, acquisition, integration and other related expenses, Legal claim costs, Impairment losses and (gain) loss on asset disposals and other charges in its reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.

 

CyrusOne Inc. – Data Center Portfolio

As of September 30, 2021 (Unaudited)

 

 

 

 

Gross Square Feet (GSF)(a)

Powered

Shell Avail. for

Future Development

(GSF)(k) (000)

Available

Critical

Load Capacity

(MW)(l)

Stabilized Properties(b)

Metro

Area

Annualized

Rent(c)

($000)

Colocation

Space

(CSF)(d)

(000)

CSF

Occupied(e)

CSF

Leased(f)

Office &

Other(g)

(000)

Office &

Other

Occupied(h)

Supporting

Infrastructure(i)

(000)

Total(j)

(000)

Dallas – Carrollton

Dallas

$98,172

428

 

76

%

76

%

83

 

45

%

133

 

644

 

 

60

 

Northern Virginia – Sterling V

Northern Virginia

73,622

 

383

 

99

%

99

%

11

 

100

%

145

 

539

 

231

 

69

 

Northern Virginia – Sterling VI

Northern Virginia

65,350

 

272

 

100

%

100

%

35

 

%

 

307

 

 

57

 

Frankfurt II

Frankfurt

45,978

 

90

 

100

%

100

%

9

 

100

%

72

 

171

 

10

 

35

 

Frankfurt III

Frankfurt

42,120

 

124

 

100

%

100

%

19

 

100

%

115

 

258

 

 

44

 

Somerset I

New York Metro

41,147

 

169

 

91

%

91

%

27

 

100

%

149

 

344

 

28

 

25

 

Northern Virginia – Sterling II

Northern Virginia

39,590

 

159

 

100

%

100

%

9

 

100

%

55

 

223

 

 

30

 

San Antonio III

San Antonio

34,228

 

132

 

100

%

100

%

9

 

100

%

43

 

184

 

 

24

 

Phoenix – Chandler VI

Phoenix

33,654

 

148

 

100

%

100

%

7

 

100

%

32

 

187

 

59

 

24

 

Chicago – Aurora I

Chicago

32,601

 

113

 

98

%

98

%

34

 

100

%

223

 

371

 

27

 

52

 

Dallas – Lewisville*

Dallas

27,025

 

114

 

74

%

79

%

11

 

57

%

54

 

180

 

 

21

 

Frankfurt I

Frankfurt

26,502

 

53

 

97

%

97

%

8

 

91

%

57

 

118

 

 

18

 

Cincinnati – North Cincinnati

Cincinnati

26,102

 

68

 

98

%

100

%

45

 

79

%

53

 

166

 

59

 

14

 

Phoenix – Chandler V

Phoenix

25,911

 

143

 

95

%

99

%

2

 

97

%

25

 

170

 

13

 

27

 

Houston – Houston West II

Houston

25,533

 

80

 

66

%

66

%

4

 

97

%

55

 

139

 

11

 

12

 

Cincinnati – 7th Street***

Cincinnati

24,325

 

197

 

46

%

46

%

6

 

68

%

175

 

378

 

46

 

17

 

Phoenix – Chandler I

Phoenix

24,163

 

74

 

99

%

99

%

35

 

11

%

39

 

147

 

31

 

12

 

Phoenix – Chandler II

Phoenix

23,864

 

74

 

100

%

100

%

6

 

53

%

26

 

105

 

 

12

 

Totowa – Madison**

New York Metro

23,010

 

51

 

74

%

74

%

22

 

89

%

59

 

133

 

 

12

 

London II*

London

22,531

 

81

 

78

%

100

%

10

 

100

%

94

 

184

 

3

 

28

 

Austin III

Austin

22,112

 

62

 

59

%

59

%

15

 

81

%

21

 

98

 

67

 

11

 

Phoenix – Chandler III

Phoenix

21,801

 

68

 

100

%

100

%

2

 

%

30

 

101

 

 

12

 

Raleigh-Durham I

Raleigh-Durham

21,326

 

94

 

100

%

100

%

16

 

100

%

82

 

192

 

235

 

14

 

Northern Virginia – Sterling III

Northern Virginia

19,918

 

79

 

100

%

100

%

7

 

100

%

34

 

120

 

 

15

 

San Antonio I

San Antonio

19,614

 

44

 

98

%

98

%

6

 

83

%

46

 

96

 

11

 

12

 

Houston – Houston West I

Houston

18,387

 

112

 

48

%

48

%

11

 

100

%

37

 

161

 

3

 

32

 

Northern Virginia – Sterling IV

Northern Virginia

18,319

 

81

 

100

%

100

%

7

 

100

%

34

 

122

 

 

15

 

Northern Virginia – Sterling I

Northern Virginia

18,160

 

78

 

90

%

90

%

6

 

63

%

49

 

132

 

 

12

 

Wappingers Falls I**

New York Metro

17,323

 

37

 

62

%

62

%

20

 

86

%

15

 

72

 

 

7

 

San Antonio II

San Antonio

17,276

 

64

 

100

%

100

%

11

 

100

%

41

 

117

 

 

12

 

San Antonio V

San Antonio

16,121

 

134

 

90

%

90

%

14

 

100

%

38

 

187

 

1

 

21

 

London I*

London

14,934

 

38

 

100

%

100

%

12

 

56

%

58

 

107

 

 

15

 

Austin II

Austin

14,913

 

44

 

81

%

81

%

2

 

81

%

22

 

68

 

 

7

 

Phoenix – Chandler IV

Phoenix

13,914

 

73

 

100

%

100

%

3

 

100

%

27

 

103

 

 

12

 

San Antonio IV

San Antonio

13,184

 

60

 

100

%

100

%

12

 

100

%

27

 

99

 

 

12

 

London III*

London

10,992

 

39

 

100

%

100

%

4

 

100

%

49

 

91

 

 

12

 

Florence

Cincinnati

10,855

 

53

 

99

%

99

%

47

 

87

%

40

 

140

 

 

9

 

Dublin

Dublin

10,109

 

76

 

100

%

100

%

10

 

100

%

33

 

119

 

76

 

12

 

Chicago – Aurora II

Chicago

9,457

 

77

 

60

%

60

%

45

 

2

%

14

 

136

 

272

 

16

 

Houston – Galleria

Houston

9,325

 

63

 

37

%

37

%

23

 

21

%

25

 

112

 

 

11

 

Cincinnati – Hamilton*

Cincinnati

9,105

 

47

 

64

%

64

%

1

 

100

%

35

 

83

 

 

9

 

Houston – Houston West III

Houston

8,348

 

53

 

50

%

50

%

10

 

13

%

32

 

95

 

209

 

6

 

Norwalk I**

New York Metro

6,920

 

17

 

100

%

100

%

10

 

95

%

41

 

68

 

83

 

5

 

London – Great Bridgewater**

London

6,861

 

10

 

91

%

91

%

 

%

1

 

11

 

 

1

 

Stamford – Riverbend**

New York Metro

5,078

 

20

 

22

%

22

%

 

%

8

 

28

 

 

5

 

Dallas – Allen

Dallas

4,936

 

79

 

22

%

22

%

 

%

58

 

137

 

204

 

6

 

Northern Virginia – Sterling IX

Northern Virginia

4,829

 

51

 

100

%

100

%

8

 

100

%

2

 

61

 

 

6

 

Cincinnati – Mason

Cincinnati

4,713

 

34

 

100

%

100

%

26

 

98

%

17

 

78

 

 

4

 

Amsterdam I

Amsterdam

4,399

 

39

 

100

%

100

%

15

 

100

%

40

 

94

 

207

 

4

 

Paris I*

Paris

3,707

 

26

 

100

%

100

%

4

 

100

%

15

 

45

 

201

 

6

 

Chicago – Lombard

Chicago

2,366

 

14

 

50

%

50

%

4

 

79

%

12

 

30

 

29

 

2

 

Totowa – Commerce**

New York Metro

754

 

 

%

%

20

 

44

%

6

 

26

 

 

 

Cincinnati – Blue Ash*

Cincinnati

558

 

6

 

36

%

36

%

7

 

100

%

2

 

15

 

 

1

 

Singapore – Inter Business Park**

Singapore

378

 

3

 

20

%

20

%

 

%

 

3

 

 

1

 

Phoenix – Chandler VII

Phoenix

246

 

62

 

71

%

71

%

10

 

14

%

38

 

110

 

 

15

 

Stabilized Properties – Total

 

$1,136,670

4,789

 

86

%

86

%

780

 

68

%

2,632

 

8,201

 

2,116

 

928

 

CyrusOne Inc.

Data Center Portfolio

As of September 30, 2021

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Square Feet (GSF)(a)

Powered

Shell

Available for

Future

Development

(GSF)(k) (000)

Available

Critical Load

Capacity

(MW)(l)

 

 

Metro

Area

Annualized

Rent(c)

($000)

Colocation

Space

(CSF)(d)

(000)

CSF

Occupied(e)

CSF

Leased(f)

Office &

Other(g)

(000)

Office &

Other

Occupied(h)

Supporting

Infrastructure(i)

(000)

Total(j)

(000)

 

Stabilized Properties – Total

 

$

1,136,670

 

4,789

 

86

%

86

%

780

 

68

%

2,632

 

8,201

 

2,116

 

928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Stabilized Properties(b)

 

 

 

 

 

 

 

 

 

 

 

 

Northern Virginia – Sterling VIII

Northern Virginia

13,208

 

61

 

59

%

59

%

4

 

%

25

 

90

 

 

12

 

 

Northern Virginia – Sterling IX

Northern Virginia

5,191

 

104

 

43

%

44

%

1

 

%

68

 

173

 

32

 

21

 

 

Council Bluffs I

Iowa

2,056

 

42

 

12

%

15

%

14

 

%

18

 

73

 

42

 

5

 

 

Somerset (DH #12 and #13)

New York Metro

 

54

 

%

%

9

 

%

 

63

 

 

5

 

 

All Properties – Total

 

$

1,157,124

 

5,050

 

83

%

84

%

809

 

67

%

2,743

 

8,601

 

2,190

 

971

 

 

 

*

Indicates properties in which we hold a leasehold interest in the building shell and land. All data center infrastructure has been constructed by us and is owned by us.

**

Indicates properties in which we hold a leasehold interest in the building shell, land, and all data center infrastructure.

***

The information provided for the Cincinnati – 7th Street property includes data for two facilities, one of which we lease and one of which we own.

(a)

Represents the total square feet of a building under lease or available for lease based on engineers’ drawings and estimates but does not include space held for development or space used by CyrusOne.

(b)

Stabilized properties include data halls that have been in service for at least 24 months or are at least 85% leased. Pre-stabilized properties include data halls that have been in service for less than 24 months and are less than 85% leased.

(c)

Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of September 30, 2021 multiplied by 12. For the month of September 2021, customer reimbursements were $244.8 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, 2019 through September 30, 2021, customer reimbursements under leases with separately metered power constituted between 14.9% and 21.2% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2021 was $1,151.5 million. Our annualized effective rent was lower than our annualized rent as of September 30, 2021 because our negative straight-line and other adjustments and amortization of deferred revenue exceeded our positive straight-line adjustments due to factors such as the timing of contractual rent escalations and customer payments for services.

(d)

CSF represents the GSF at an operating facility that is currently leased or readily available for lease as colocation space, where customers locate their servers and other IT equipment.

(e)

Percent occupied is determined based on CSF billed to customers under signed leases as of September 30, 2021 divided by total CSF. Leases signed but that have not commenced billing as of September 30, 2021 are not included.

(f)

Percent leased is calculated by dividing CSF under signed leases for colocation space (whether or not the lease has commenced billing) by total CSF.

(g)

Represents the GSF at an operating facility that is currently leased or readily available for lease as space other than CSF, which is typically office and other space.

(h)

Percent occupied is determined based on Office & Other space being billed to customers under signed leases as of September 30, 2021 divided by total Office & Other space. Leases signed but not commenced as of September 30, 2021 are not included.

(i)

Represents infrastructure support space, including mechanical, telecommunications and utility rooms, as well as building common areas.

(j)

Represents the GSF at an operating facility that is currently leased or readily available for lease. This excludes existing vacant space held for development.

(k)

Represents space that is under roof that could be developed in the future for GSF, rounded to the nearest 1,000.

(l)

Critical power capacity represents the gross aggregate of UPS power installed and available to provide multiple redundancy levels for lease and exclusive use by customers. Capacity is stated in megawatts as represented by UPS manufacturer nameplate ratings and does not include ancillary UPS capacity not configured for the direct support of leased customer critical IT load (e.g. dedicated office power, office disaster recovery UPS, or UPS utilized by CyrusOne for infrastructure control circuits). Does not sum to total due to rounding.

 

CyrusOne Inc.

GSF Under Development

As of September 30, 2021

(Dollars in millions) (Unaudited)

 

 

 

 

GSF Under Development(a)

 

Under Development Costs(b)

Facilities

Metro Area

Estimated

Completion

Date

Colocation Space

(CSF) (000)

Office & Other

(000)

Supporting

Infrastructure

(000)

Powered

Shell(c) (000)

Total

(000)

Critical

Load MW

Capacity(d)

Actual to

Date(e)

Estimated

Costs to

Completion(f)

Total

London I

London

4Q’21

8

 

 

 

 

8

 

3.0

 

$5

$5-10

$10-15

Sterling IX (DH #4)

Northern Virginia

4Q’21

40

 

 

 

 

40

 

4.5

 

1

22-26

23-27

Sterling IX (DH #3)

Northern Virginia

4Q’21

 

 

 

 

 

1.5

 

5

4-6

9-11

San Antonio VI

Texas

2Q’22

 

 

 

125

 

125

 

 

1

20-23

21-24

Sterling X

Northern Virginia

2Q’22

 

 

 

225

 

225

 

 

1

41-47

42-48

London IV

London

2Q’22

38

 

7

 

39

 

101

 

186

 

6.0

 

7

39-58

46-65

Frankfurt IV

Frankfurt

4Q’22

73

 

11

 

39

 

 

122

 

17.0

 

9

112-131

121-140

London V

London

3Q’23

52

 

12

 

49

 

17

 

130

 

16.5

 

83-89

83-89

Total

 

 

211

 

30

 

127

 

469

 

836

 

48.5

 

$29

$326-390

$355-419

(a)

Represents GSF at a facility for which, as of September 30, 2021, activities have commenced or are expected to commence in the next 2 quarters to prepare the space for its intended use. Estimates and timing are subject to change. May not sum to total due to rounding.

(b)

London development costs are GBP-denominated and shown as USD-equivalent based on an exchange rate of 1.35 as of September 30, 2021. Frankfurt development costs are EUR-denominated and shown as USD-equivalent based on an exchange rate of 1.16 as of September 30, 2021.

(c)

Represents GSF under construction that, upon completion, will be powered shell available for future development into GSF.

(d)

Critical power capacity represents the gross aggregate of UPS power installed and available to provide multiple redundancy levels for lease and exclusive use by customers. Capacity is stated in megawatts as represented by UPS manufacturer nameplate ratings and does not include ancillary UPS capacity not configured for the direct support of leased customer critical IT load.

(e)

Actual to date is the cash investment as of September 30, 2021. There may be accruals above this amount for work completed, for which cash has not yet been paid.

(f)

Represents management’s estimate of the total costs required to complete the current GSF under development. There may be an increase in costs if customers require greater power density.

Capital Expenditures – Investment in Real Estate(a)

Three Months Ended

Nine Months Ended

(dollars in millions)

September 30, 2021

September 30, 2021

Capital expenditures – investment in real estate

$211.3

$566.5

(a) Excludes recurring capital expenditures.

 

CyrusOne Inc.

Land Available for Future Development (Acres)

As of September 30, 2021 (Unaudited)

 

 

As of

Market

September 30, 2021

Amsterdam

8

 

Austin

22

 

Chicago

23

 

Cincinnati

98

 

Council Bluffs, Iowa

10

 

Dallas

57

 

Dublin

15

 

Frankfurt

6

 

Houston

20

 

London

33

 

Madrid

5

 

Northern Virginia

24

 

Phoenix

96

 

Quincy, Washington

48

 

San Antonio

22

 

Santa Clara

23

 

Total Available(a)

508

 

Book Value of Total Available

$

293.0

million

(a) Does not sum to total due to rounding.

 

CyrusOne Inc.

Leasing Statistics – Lease Signings

As of September 30, 2021

(Unaudited)

 

Period

Number

of Leases(a)

Total CSF

Signed(b)

Total kW

Signed(c)

Total MRR

Signed (000)(d)

Weighted Average

Lease Term(e)

3Q’21

349

100,000

19,860

$3,152

108

Prior 4Q Avg.

396

169,500

21,106

$2,860

97

2Q’21

370

345,000

20,855

$3,487

99

1Q’21

414

156,000

28,493

$2,947

116

4Q’20

383

162,000

31,321

$4,112

117

3Q’20

415

15,000

3,756

$894

54

(a)

Number of leases represents each agreement with a customer. A lease agreement could include multiple spaces, and a customer could have multiple leases.

(b)

CSF represents the GSF at an operating facility that is leased as colocation space, where customers locate their servers and other IT equipment.

(c)

Represents maximum contracted kW that customers may draw during lease period, and subject to full build out of projects subject to additional conditions. Additionally, we can develop flexible solutions for our customers at multiple resiliency levels, and the kW signed is unadjusted for this factor.

(d)

Monthly recurring rent is defined as the average monthly contractual rent during the term of the lease. It includes the monthly impact of installation charges of approximately $0.7 million in 2Q’21, $0.3 million in 3Q’21, and $0.2 million in 3Q’20, 4Q’20 and 1Q’21.

(e)

Calculated on a CSF-weighted basis.

 

CyrusOne Inc.

New MRR Signed – Existing vs. New Customers

As of September 30, 2021

(Dollars in thousands)

(Unaudited)

 
New MRR Signed(a)
 
4Q’19 1Q’20 2Q’20 3Q’20 4Q’20 1Q’21 2Q’21 3Q’21
Existing Customers

$843

$4,756

$2,872

$841

$3,881

$2,827

$3,332

$3,039

New Customers

$220

$238

$198

$53

$231

$120

$155

$113

Total

$1,063

$4,994

$3,070

$894

$4,112

$2,947

$3,487

$3,152

 
% from Existing Customers

79%

95%

94%

94%

94%

96%

96%

96%

(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 $0.7 million in 2Q’21, $0.3 million in 1Q’20 and 3Q’21, and $0.2 million in 4Q’19, 2Q’20, 3Q’20, 4Q’20, and 1Q’21.

 

CyrusOne Inc.

Customer Sector Diversification(a)

As of September 30, 2021

(Unaudited)

 

 

Principal Customer Industry

Number of

Locations

Annualized

Rent(b) (000)

Percentage of

Portfolio

Annualized

Rent(c)

Weighted Average

Remaining Lease

Term in Months(d)

1

Information Technology

13

$

228,644

 

19.8

%

86.6

 

2

Information Technology

8

98,014

 

8.5

%

46.0

 

3

Information Technology

14

87,632

 

7.6

%

21.7

 

4

Information Technology

5

62,815

 

5.4

%

36.0

 

5

Information Technology

10

45,010

 

3.9

%

40.9

 

6

Information Technology

5

44,999

 

3.9

%

33.3

 

7

Information Technology

3

22,593

 

2.0

%

26.3

 

8

Financial Services

1

18,985

 

1.6

%

114.0

 

9

Healthcare

2

16,500

 

1.4

%

75.0

 

10

Information Technology

7

14,797

 

1.3

%

29.3

 

11

Research and Consulting Services

3

14,801

 

1.3

%

13.0

 

12

Financial Services

4

11,960

 

1.0

%

78.3

 

13

Financial Services

2

11,905

 

1.0

%

33.7

 

14

Financial Services

4

10,574

 

0.9

%

78.8

 

15

Information Technology

1

9,874

 

0.9

%

29.6

 

16

Telecommunication Services

1

8,487

 

0.7

%

74.0

 

17

Telecommunication Services

2

8,300

 

0.7

%

42.0

 

18

Telecommunication Services

7

7,655

 

0.7

%

19.1

 

19

Financial Services

7

7,435

 

0.6

%

24.6

 

20

Industrials

2

7,080

 

0.6

%

66.7

 

 

 

 

$

738,059

 

63.8

%

55.1

 

(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, 2021, multiplied by 12. For the month of September 2021, customer reimbursements were $244.8 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, 2019 through June 30, 2021, customer reimbursements under leases with separately metered power constituted between 14.9% and 21.2% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2021 was $1,151.5 million. Our annualized effective rent was lower than our annualized rent as of September 30, 2021 because our negative straight-line and other adjustments and amortization of deferred revenue exceeded our positive straight-line adjustments due to factors such as the timing of contractual rent escalations and customer payments for services.

(c)

Represents the customer’s total annualized rent divided by the total annualized rent in the portfolio as of September 30, 2021, which was approximately $1,157.1 million.

(d)

Weighted average based on customer’s percentage of total annualized rent expiring and is as of September 30, 2021, assuming that customers exercise no renewal options and exercise all early termination rights that require payment of less than 50% of the remaining rents. Early termination rights that require payment of 50% or more of the remaining lease payments are not assumed to be exercised because such payments approximate the profitability margin of leasing that space to the customer, such that we do not consider early termination to be economically detrimental to us.

 

CyrusOne Inc.

Lease Distribution

As of September 30, 2021

(Unaudited)

 

GSF Under Lease(a)

Number of

Customers(b)

Percentage of

All Customers

Total Leased

GSF(c) (000)

Percentage of

Portfolio

Leased GSF

Annualized

Rent(d) (000)

Percentage of

Annualized Rent

0-999

606

 

65

%

128

 

2

%

$

88,771

 

8

%

1000-2499

117

 

13

%

184

 

2

%

47,943

 

4

%

2500-4999

59

 

6

%

211

 

3

%

47,853

 

4

%

5000-9999

48

 

5

%

332

 

5

%

57,707

 

5

%

10000+

99

 

11

%

6,105

 

88

%

914,849

 

79

%

Total

929

 

100

%

6,959

 

100

%

$

1,157,124

 

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, 2021. This may vary from total customer count as some customers may be under contract but have yet to occupy space.

(c)

Represents the total square feet at a facility under lease and that has commenced billing, excluding space held for development or space used by CyrusOne. A customer’s leased GSF is estimated based on such customer’s direct CSF or office and light-industrial space plus management’s estimate of infrastructure support space, including mechanical, telecommunications and utility rooms, as well as building common areas.

(d)

Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of September 30, 2021, multiplied by 12. For the month of September 2021, customer reimbursements were $244.8 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, 2019 through September 30, 2021, customer reimbursements under leases with separately metered power constituted between 14.9% and 21.2% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2021 was $1,151.5 million. Our annualized effective rent was lower than our annualized rent as of September 30, 2021 because our negative straight-line and other adjustments and amortization of deferred revenue exceeded our positive straight-line adjustments due to factors such as the timing of contractual rent escalations and customer payments for services.

 

CyrusOne Inc.

Lease Expirations

As of September 30, 2021

(Unaudited)

 

Year(a)

Number of

Leases

Expiring(b)

Total

GSF Expiring

(000)

Percentage of

Total GSF

Annualized

Rent(c) (000)

Percentage of

Annualized Rent

Annualized Rent

at Expiration(d)

(000)

Percentage of

Annualized Rent

at Expiration

Available

 

1,643

 

19

%

 

 

 

 

Month-to-Month

1,874

 

152

 

2

%

$

48,740

 

4

%

$

48,740

 

4

%

2021

1,225

 

368

 

4

%

66,789

 

6

%

66,850

 

5

%

2022

3,253

 

909

 

11

%

188,790

 

16

%

190,993

 

15

%

2023

1,548

 

1,215

 

14

%

187,053

 

16

%

192,640

 

15

%

2024

1,090

 

705

 

8

%

147,992

 

13

%

155,743

 

12

%

2025

214

 

394

 

5

%

76,047

 

7

%

82,711

 

7

%

2026

155

 

953

 

11

%

153,100

 

13

%

167,933

 

13

%

2027

56

 

650

 

7

%

105,966

 

9

%

119,757

 

10

%

2028

28

 

306

 

4

%

41,938

 

4

%

47,673

 

4

%

2029

8

 

83

 

1

%

7,205

 

1

%

8,845

 

1

%

2030

10

 

291

 

3

%

27,908

 

2

%

42,513

 

3

%

2031 – Thereafter

37

 

934

 

11

%

105,597

 

9

%

130,979

 

11

%

Total

9,498

 

8,601

 

100

%

$

1,157,124

 

100

%

$

1,255,376

 

100

%

(a)

Leases that were auto-renewed prior to September 30, 2021 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, 2021, multiplied by 12. For the month of September 2021, customer reimbursements were $244.8 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, 2019 through September 30, 2021, customer reimbursements under leases with separately metered power constituted between 14.9% and 21.2% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of September 30, 2021 was $1,151.5 million. Our annualized effective rent was lower than our annualized rent as of September 30, 2021 because our negative straight-line and other adjustments and amortization of deferred revenue exceeded our positive straight-line adjustments due to factors such as the timing of contractual rent escalations and customer payments for services.

(d)

Represents the final monthly contractual rent under existing customer leases that had commenced as of September 30, 2021, multiplied by 12.

 


Source link

Comments are closed.