CyrusOne Reports First Quarter 2019 Earnings

1Q’19 Year-over-Year Revenue Growth of 14%
Signed $27 Million in Annualized GAAP Revenue and 16 Megawatts

DALLAS--()--CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT, today announced first quarter 2019 earnings.

Highlights

           
% Change vs. 1Q’18

Category

1Q’19

1Q’18

     

1Q’18 Adjusted
for ASC 8421

Revenue $225.0 million 14% 14%
Net income / (loss) $89.4 million n/m n/m
Adjusted EBITDA $119.2 million 9% 13%
Normalized FFO $89.3 million 9% 12%
Net income / (loss) per diluted share $0.82 82% 86%
Normalized FFO per diluted share $0.82 (4)% (1)%
 

Leased 16 megawatts (“MW”) and 93,000 colocation square feet (“CSF”) in the first quarter, totaling $27 million in annualized GAAP revenue
 

 

-- Backlog of $39 million in annualized GAAP revenue as of the end of the first quarter

 

As previously announced, acquired 22 acres of land in San Antonio and 8 acres of land in Santa Clara to support growth in those markets
 
-- Estimated 120 MW of power capacity in San Antonio and nearly 200 MW of power capacity in Santa Clara (inclusive of previously acquired land)
 

Strategically hedged EUR exposure, synthetically converting $270 million outstanding on the Company’s revolving credit facility into more attractively priced EUR-denominated debt (equivalent to €238 million), resulting in a nearly 300 basis point decrease in the interest rate
 

Raised approximately $252 million in net proceeds through the sale of approximately 4.9 million shares of common stock under at-the-market (“ATM”) equity program
 

As previously announced, subsequent to the end of the first quarter raised approximately $200 million through the sale of approximately 5.7 million American depository shares (“ADSs”) of GDS Holdings Limited (“GDS”)
 

Increasing 2019 Normalized FFO per diluted share guidance2 by $0.20 at the midpoint of the range, from $3.10 - 3.20 to $3.30 - 3.40

 

“We are off to a great start to the year, with strong operational and financial performance, and leasing contributions across the portfolio as our international expansion creates an increasingly balanced and diversified business with a presence in the most important markets in the world,” said Gary Wojtaszek, president and chief executive officer of CyrusOne. “We continue to maintain a very strong balance sheet to support our growth, and recent initiatives have allowed us to significantly increase our Normalized FFO per share guidance while meeting our equity funding requirements for the year based on our current outlook.”

First Quarter 2019 Financial Results

Revenue was $225.0 million for the first quarter, compared to $196.6 million for the same period in 2018, an increase of 14%. The increase in revenue was driven primarily by a 22% increase in occupied CSF from organic growth and the Zenium acquisition, as well as additional interconnection services.

Net income was $89.4 million for the first quarter, compared to net income of $43.5 million in the same period in 2018. Net income for the first quarter included a $101.2 million unrealized gain on the Company’s equity investment in GDS, a leading data center provider in China, due to an increase in GDS’s share price during the quarter. Net income per diluted common share3 was $0.82 in the first quarter of 2019, compared to net income per diluted common share of $0.45 in the same period in 2018.

Net operating income (“NOI”)4 was $141.7 million for the first quarter, compared to $128.8 million in the same period in 2018, an increase of 10%. Adjusted EBITDA5 was $119.2 million for the first quarter, compared to $109.5 million in the same period in 2018, an increase of 9%.

Normalized Funds From Operations (“Normalized FFO”)6 was $89.3 million for the first quarter, compared to $82.2 million in the same period in 2018, an increase of 9%. Normalized FFO per diluted common share was $0.82 in the first quarter of 2019.

Leasing Activity

CyrusOne leased approximately 16 MW of power and 93,000 CSF in the first quarter, representing $2.3 million in monthly recurring rent, inclusive of the monthly impact of installation charges, or approximately $27.2 million in annualized GAAP revenue7, excluding estimates for pass-through power. The weighted average lease term of the new leases, based on square footage, is 56 months (4.7 years), and the weighted average remaining lease term of CyrusOne’s portfolio is 56 months (taking into account the impact of the backlog). Recurring rent churn8 for the first quarter was 2.1%, compared to 0.5% for the same period in 2018.

Portfolio Development and CSF Leased

In the first quarter, the Company completed construction on 249,000 CSF and 48 MW of power capacity across five projects in Northern Virginia, the New York Metro area, and Raleigh-Durham. CSF leased9 as of the end of the first quarter was 90% for stabilized properties10 and 86% overall. In addition, the Company has development projects underway in Northern Virginia, Dallas, the New York Metro area, Raleigh-Durham, Phoenix, Austin, Frankfurt, London, and Amsterdam that are expected to add approximately 190,000 CSF and 82 MW of power capacity.

Sale of GDS Shares

As previously announced, subsequent to the end of the first quarter the Company raised approximately $200 million through the sale of approximately 5.7 million ADSs of GDS. CyrusOne continues to hold approximately 2.3 million ADSs, valued at approximately $90 million based on the GDS closing price on April 30, 2019, with the remaining ADSs being subject to a six-month lock up period. The commercial agreement between CyrusOne and GDS remains in place, and Gary Wojtaszek remains a member of the GDS Board of Directors.

Balance Sheet and Liquidity

As of March 31, 2019, the Company had gross asset value11 totaling approximately $7.1 billion, an increase of approximately 32% over gross asset value as of March 31, 2018. CyrusOne had $2.92 billion of long-term debt12, $126.0 million of cash and cash equivalents, and $1.28 billion available under its unsecured revolving credit facility as of March 31, 2019. Net debt12 was $2.82 billion as of March 31, 2019, representing approximately 33% of the Company's total enterprise value as of March 31, 2019 of $8.6 billion.

In the first quarter, CyrusOne sold approximately 4.9 million shares of its common stock through its ATM equity program, raising approximately $252 million in net proceeds. The settlement of a portion of the shares and receipt of the associated proceeds occurred in April 2019. As of March 31, 2019, there was approximately $495 million in remaining availability under the current ATM program. Also in the first quarter, CyrusOne strategically hedged its EUR exposure, synthetically converting $270 million outstanding on the Company’s revolving credit facility into more attractively priced EUR-denominated debt (equivalent to €238 million), resulting in a nearly 300 basis point decrease in the interest rate.

Subsequent to the end of the first quarter, CyrusOne paid down $200 million of its $1.0 billion term loan maturing in March 2023, decreasing the remaining balance to $800 million.

Net debt to Adjusted EBITDA for the last quarter annualized was 5.2x, after adjusting net debt to include the impact of proceeds from the April 2019 settlement of shares of common stock sold through the ATM equity program in March 2019, proceeds from the sale of GDS ADSs in April 2019, and the repayment of $200 million of the $1.0 billion term loan in April 2019. After further adjusting Adjusted EBITDA to exclude the impact of the adoption of ASC 842 as of January 1, 2019, in order to present the leverage metric on a basis comparable to that of prior periods, net debt to Adjusted EBITDA for the last quarter annualized was 5.0x13. Available liquidity14 was $1.55 billion as of March 31, 2019.

Dividend

On February 20, 2019, the Company announced a dividend of $0.46 per share of common stock for the first quarter of 2019. The dividend was paid on April 12, 2019, to stockholders of record at the close of business on March 29, 2019.

Additionally, today the Company is announcing a dividend of $0.46 per share of common stock for the second quarter of 2019. The dividend will be paid on July 12, 2019, to stockholders of record at the close of business on June 28, 2019.

Guidance

CyrusOne is updating guidance for full year 2019, increasing the guidance range for Normalized FFO per diluted common share, decreasing and tightening the guidance ranges for Capital Expenditures and Capital Expenditures - Development, and reaffirming the ranges for all other metrics. 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 forward-looking guidance for GAAP financial measures (other than 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, 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

     

Previous
2019 Guidance

     

Revised
2019 Guidance

Total Revenue $960 - 1,000 million $960 - 1,000 million
Lease and Other Revenues from Customers $835 - 865 million $835 - 865 million
Metered Power Reimbursements $125 - 135 million $125 - 135 million
Adjusted EBITDA $500 - 525 million $500 - 525 million
Normalized FFO per diluted common share $3.10 - 3.20 $3.30 - 3.40
Capital Expenditures $950 - 1,100 million $900 - 1,000 million
Development(1) $940 - 1,085 million $890 - 985 million
Recurring $10 - 15 million $10 - 15 million
 

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

Upcoming Conferences and Events

  • MoffettNathanson Media & Communications Summit on May 14-15 in New York City
  • J.P. Morgan Global Technology, Media and Communications Conference on May 13-16 in Boston, Massachusetts
  • RBC C-Level 2019 Global Datacenter and Connectivity Conference on May 29 in the San Francisco Bay Area
  • Cowen Technology, Media & Telecom Conference on May 29-30 in New York City
  • Credit Suisse Communications Conference on June 4-5 in New York City
  • NAREIT’s REITweek Conference on June 4-6 in New York City
  • William Blair Growth Stock Conference on June 5-6 in Chicago
  • NASDAQ Investor Conference on June 13 in London

Conference Call Details

CyrusOne will host a conference call on May 2, 2019, at 11:00 AM Eastern Time (10:00 AM Central Time) to discuss its results for the first quarter of 2019. A live webcast of the conference call and the presentation to be made during the call will be available in the “Investors / Events & 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 2, 2019, through May 16, 2019. 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 10129894.

Safe Harbor

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

Adoption of New Accounting Standard and Use of Non-GAAP Financial Measures and Other Metrics

In February 2016, the Financial Accounting Standards Board issued ASU 2016-02 (codified in ASC 842, Leases (“ASC 842”)) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. The ASU requires that a liability be recorded on the balance sheet for all leases where the reporting entity is a lessee, based on the present value of future lease obligations. A corresponding right-of-use asset will also be recorded. Amortization of the lease obligation and the right-of-use asset for leases classified as operating leases are on a straight-line basis. Leases classified as financing leases are required to be accounted for as financing arrangements similar to the accounting treatment for capital leases under ASC 840, Leases (the former accounting standard for all leases).

We adopted ASU 2016-02 on January 1, 2019, applied the package of practical expedients included therein and utilized the modified retrospective transition method, with the cumulative effect of transition, including initial recognition of lease assets and liabilities for existing operating leases, recognized as of the effective date, included in ASU 2018-11. By applying ASU 2018-11 at the adoption date, the presentation of financial information for periods prior to January 1, 2019 will remain unchanged.

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 comparable GAAP measures. Detailed reconciliations of these non-GAAP financial measures to comparable GAAP financial measures have been included in the tables that accompany this release and are available in the Investor Relations section of www.cyrusone.com.

Management uses FFO, Normalized FFO, Normalized FFO per Diluted Common Share, Adjusted EBITDA, and NOI 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, and Adjusted EBITDA should be considered only as supplements to net income as measures of our performance. FFO, Normalized FFO, NOI, and Adjusted EBITDA should not be used as measures of liquidity or as indicative of funds available to fund the Company's cash needs, including the ability to make distributions. These measures also should not be used as substitutes for cash flow from operating activities computed in accordance with U.S. GAAP. The Company believes that Net Debt provides a useful measure of liquidity and financial health.

1 The Company adopted ASC 842 effective January 1, 2019. The adjusted 1Q’18 results have not been prepared in accordance with GAAP and represent the Company’s estimates as if the standard had been adopted as of January 1, 2018. The percentage changes versus adjusted 1Q’18 results are being shown solely for comparative and investor usefulness purposes with respect to the Company’s 1Q’19 results. There is no impact on 1Q’18 Revenue. The estimated impacts on 1Q’18 Net income, Adjusted EBITDA, Normalized FFO, Net income per share, and Normalized FFO per share are $1.2 million, $4.1 million, $2.2 million, $0.01, and $0.02, respectively.

2CyrusOne is not providing forward-looking GAAP guidance for GAAP net income (loss) per share or reconciliations of its non-GAAP guidance, see “Guidance” for more information.

3Net 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 108.8 million for the first quarter of 2019.

4We 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 revenue less property operating expenses, each of which are presented in the accompanying consolidated statements of operations and/or net income (loss), which is presented in the accompanying consolidated statements of operations, adjusted for sales and marketing expenses, general and administrative expenses, depreciation and amortization expenses, transaction, acquisition, integration and other related expenses, interest expense, unrealized (gain) loss on marketable equity investment, loss on early extinguishment of debt, other expense, income tax expense and other special items as appropriate. Amortization of deferred leasing costs is presented in depreciation and amortization expenses, which is excluded from NOI. Sales and marketing expenses are not property-specific, rather these expenses support our entire portfolio. As a result, we have excluded these sales and marketing expenses from our NOI calculation, consistent with the treatment of general and administrative expenses, which also support our entire portfolio. Because the calculation of NOI excludes various expenses, the utility of NOI as a measure of our performance is limited. Other REITs may not calculate NOI in the same manner. Accordingly, our NOI may not be comparable to others. Therefore, NOI should be considered only as a supplement to 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.

5Adjusted EBITDA, which is a non-GAAP financial measure, is defined as net income (loss) as defined by GAAP adjusted for interest expense, income tax benefit (expense), depreciation and amortization, impairment losses and loss on disposals, transaction, acquisition, integration and other related expenses, legal claim costs, stock-based compensation expense, severance and management transition costs, loss on early extinguishment of debt, new accounting standards and regulatory compliance and the related system implementation costs, unrealized (gain) loss on marketable equity investment, other expenses and other special items as appropriate. 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.

6We 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. While it is consistent with the definition of FFO promulgated by the National Association of Real Estate Investment Trusts ("NAREIT"), our computation of FFO may differ from the methodology for calculating FFO used by other REITs. Accordingly, our FFO may not be comparable to others.

We calculate Normalized FFO as FFO plus loss on early extinguishment of debt; unrealized (gain) loss on marketable equity investment; new accounting standards and regulatory compliance and the related system implementation costs; amortization of tradenames; transaction, acquisition, integration and other related expenses; severance and management transition costs; legal claim costs; lease exit costs; and other special items as appropriate. The Company believes its 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 impairment losses, 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.

7Annualized 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.

8Recurring rent churn is calculated as any reduction in recurring rent due to customer terminations, service reductions or net pricing decreases as a percentage of rent at the beginning of the period, excluding any impact from metered power reimbursements or other usage-based billing.

9CSF leased is calculated by dividing CSF under signed leases for colocation 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.

10Stabilized properties include data halls that have been in service for at least 24 months or are at least 85% leased.

11Gross asset value is defined as total assets plus accumulated depreciation.

12Long-term debt and net debt exclude adjustments for deferred financing costs and bond 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 capital lease obligations, offset by cash and cash equivalents.

13The estimated impact of the adoption of ASC 842 on Adjusted EBITDA for the last quarter annualized is $16.2 million.

14Liquidity is calculated as cash, cash equivalents, and temporary cash investments on hand, plus the undrawn capacity on CyrusOne's revolving credit facility. Liquidity has been adjusted to include the impact of proceeds from the April 2019 settlement of shares of common stock sold through the ATM equity program in March 2019 and proceeds from the sale of GDS ADSs in April 2019, net of the repayment of $200 million of the $1.0 billion term loan in April 2019.

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 212 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 48 data centers worldwide. Additional information about CyrusOne can be found at www.CyrusOne.com.

Company Profile

CyrusOne (NASDAQ: CONE) specializes in highly reliable enterprise-class, carrier-neutral data center properties. The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers, including 212 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 48 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       Jonathan Schildkraut, EVP & Chief Strategy Officer
Dallas, Texas 75201 Tesh Durvasula, EVP & President, Europe John Gould, EVP & Chief Commercial Officer
Phone: (972) 350-0060 Diane Morefield, EVP & Chief Financial Officer Kellie Teal-Guess, EVP & Chief People Officer

Website: www.cyrusone.com

Kevin Timmons, EVP & Chief Technology Officer Robert Jackson, EVP General Counsel & Secretary
           

Analyst Coverage

 

Firm

Analyst

Phone Number

Bank of America Merrill Lynch Michael J. Funk (646) 855-5664
Berenberg Capital Markets Nate Crossett (646) 949-9030
BMO Capital Markets Ari Klein (212) 885-4103
Citi Mike Rollins (212) 816-1116
Cowen and Company Colby Synesael (646) 562-1355
Credit Suisse Sami Badri (212) 538-1727
Deutsche Bank Matthew Niknam (212) 250-4711
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
Stifel Erik Rasmussen (212) 271-3461
SunTrust Robinson Humphrey Greg Miller (212) 303-4169
UBS John C. Hodulik, CFA (212) 713-4226
Wells Fargo Eric Luebchow (312) 630-2386
William Blair Jim Breen, CFA (617) 235-7513
       

CyrusOne Inc.

Summary of Financial Data

(Dollars in millions, except per share amounts)

 
Three Months
March 31,     December 31,     March 31, Growth %
2019     2018     2018     Yr/Yr
Revenue $ 225.0 $ 221.3 $ 196.6 14 %
Net operating income 141.7 143.3 128.8 10 %
Net income (loss) 89.4 (105.8 ) 43.5 n/m
Funds from Operations ("FFO") - Nareit defined 189.5 (10.3 ) 116.0 63 %
Normalized Funds from Operations ("Normalized FFO") 89.3 90.9 82.2 9 %
Weighted average number of common shares outstanding - diluted for Normalized FFO 108.8 106.1 96.6 13 %
Income (loss) per share - basic $ 0.82 $ (1.00 ) $ 0.45 82 %
Income (loss) per share - diluted $ 0.82 $ (1.00 ) $ 0.45 82 %
Normalized FFO per diluted common share $ 0.82 $ 0.86 $ 0.85 (4 )%
Adjusted EBITDA $ 119.2 $ 121.2 $ 109.5 9 %
Adjusted EBITDA as a % of Revenue 53.0 % 54.8 % 55.7 % (2.7) pts
 
 

As of

March 31,

December 31,

March 31, Growth %
2019     2018     2018     Yr/Yr
Balance Sheet Data
Gross investment in real estate $ 5,508.8 $ 5,347.5 $ 3,954.6 39 %
Accumulated depreciation (1,122.5 ) (1,054.5 ) (836.4 ) 34 %
Total investment in real estate, net 4,386.3 4,293.0 3,118.2 41 %
Cash and cash equivalents 126.0 64.4 228.7 (45 )%
Market value of common equity 5,785.0 5,728.5 5,066.4 14 %
Long-term debt 2,915.8 2,643.0 2,200.0 33 %
Net debt 2,823.2 2,612.0 1,987.2 42 %
Total enterprise value 8,608.2 8,340.5 7,053.6 22 %
Net debt to LQA Adjusted EBITDA(a)

5.2

x

5.4

x

4.5

x

0.7

x

 
Dividend Activity
Dividends per share $ 0.46 $ 0.46 $ 0.46 -
 
Portfolio Statistics
Data centers 48 48 45 7 %
Stabilized CSF (000) 3,721 3,540 3,024 23 %
Stabilized CSF % leased 90 % 92 % 92 % (2) pts
Total CSF (000) 4,061 3,819 3,348 21 %
Total CSF % leased 86 % 88 % 86 % 0 pts
Total NRSF (000) 7,004 6,726 5,824 20 %
 
(a) March 31, 2019 period adjusted to reflect the impact of proceeds from the April 2019 settlement of shares of common stock sold through the Company's ATM equity program in March 2019, proceeds from the sale of GDS ADSs in April 2019, and the repayment of $200 million of the $1.0 billion term loan in April 2019.
       

CyrusOne Inc.

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share amounts)

(Unaudited)

 
Three Months
Ended March 31, Change
2019   2018   $   %
Revenue(a) $ 225.0   $ 196.6 $ 28.4 14 %
Operating expenses:
Property operating expenses 83.3 67.8 15.5 23 %
Sales and marketing 5.3 5.3 n/m
General and administrative 22.2 19.3 2.9 15 %
Depreciation and amortization 102.1 74.6 27.5 37 %
Transaction, acquisition, integration and other related expenses   0.3       1.9       (1.6 )   (84 )%
Total operating expenses   213.2       168.9       44.3     26 %
Operating income 11.8 27.7 (15.9 ) (57 )%
Interest expense (23.7 ) (20.8 ) (2.9 ) 14 %
Unrealized gain on marketable equity investment 101.2 40.5 60.7 n/m
Loss on early extinguishment of debt (3.1 ) 3.1 n/m
Other expense   (0.1 )           (0.1 )   n/m
Net income before income taxes 89.2 44.3 44.9 n/m
Income tax benefit (expense)   0.2       (0.8 )     1.0     n/m
Net income $ 89.4     $ 43.5     $ 45.9     n/m
Income per share - basic $ 0.82 $ 0.45 $ 0.37 82 %
Income per share - diluted $ 0.82 $ 0.45 $ 0.37 82 %
 
(a) The Company adopted the new accounting standard, ASC 842, “Leases”, in the first quarter of 2019. Revenue includes metered power reimbursements of $28.5 million and $21.6 million for the three months ended March 31, 2019 and 2018, respectively.
           

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

 
March 31, December 31, Change
2019     2018     $     %
Assets    
Investment in real estate:
Land $ 124.9 $ 118.5 $ 6.4 5 %
Buildings and improvements 1,649.2 1,677.5 (28.3 ) (2 )%
Equipment   2,799.6         2,630.2         169.4       6 %
Gross operating real estate 4,573.7 4,426.2 147.5 3 %
Less accumulated depreciation   (1,122.5 )       (1,054.5 )       (68.0 )     6 %
Net operating real estate 3,451.2 3,371.7 79.5 2 %
Construction in progress, including land under development 734.7 744.9 (10.2 ) (1 )%
Land held for future development   200.4         176.4         24.0       14 %
Total investment in real estate, net 4,386.3 4,293.0 93.3 2 %
Cash and cash equivalents 126.0 64.4 61.6 96 %
Rent and other receivables 248.7 234.9 13.8 6 %
Restricted cash 1.3 1.3 %
Operating lease right-of-use assets 83.8 83.8 %
Equity investments 299.3 198.1 101.2 51 %
Goodwill 455.1 455.1 %
Intangible assets, net 226.1 235.7 (9.6 ) (4 )%
Other assets   114.8         111.3         3.5       3 %
Total assets $ 5,941.4       $ 5,592.5       $ 348.9       6 %
Liabilities and equity
Debt $ 2,898.6 $ 2,624.7 $ 273.9 10 %
Capital lease obligations 33.4 33.4 %
Operating lease liabilities 119.6 119.6 %
Lease financing arrangements 123.3 (123.3 ) %
Construction costs payable 155.5 195.3 (39.8 ) (20 )%
Accounts payable and accrued expenses 81.6 121.3 (39.7 ) (33 )%
Dividends payable 51.5 51.0 0.5 1 %
Deferred revenue and prepaid rents 155.9 148.6 7.3 5 %
Deferred tax liability   67.2         68.9         (1.7 )     (2 )%
Total liabilities   3,563.3         3,366.5         196.8       6 %
Stockholders' equity
Preferred stock, $.01 par value, 100,000,000 authorized; no shares issued or outstanding %
Common stock, $.01 par value, 500,000,000 shares authorized and 110,316,652 and 108,329,314
shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively 1.1 1.1

%
Additional paid in capital 2,938.2 2,837.4 100.8 4 %
Accumulated deficit (552.2 ) (600.2 ) 48.0 (8 )%
Accumulated other comprehensive loss   (9.0 )       (12.3 )       3.3       (27 )%
Total stockholders’ equity   2,378.1         2,226.0         152.1       7 %
Total liabilities and equity $ 5,941.4       $ 5,592.5       $ 348.9       6 %
                   

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,
2019     2018     2018     2018     2018
Revenue(a) $ 225.0 $ 221.3 $ 206.6 $ 196.9 $ 196.6
Operating expenses:
Property operating expenses 83.3 78.0 77.7 68.9 67.8
Sales and marketing 5.3 5.6 4.3 4.4 5.3
General and administrative 22.2 23.4 19.3 18.6 19.3
Depreciation and amortization 102.1 97.9 84.0 77.6 74.6
Transaction, acquisition, integration and other related expenses 0.3       1.6       1.1       0.4       1.9  
Total operating expenses 213.2       206.5       186.4       169.9       168.9  
Operating income 11.8 14.8 20.2 27.0 27.7
Interest expense (23.7 ) (25.3 ) (25.8 ) (22.8 ) (20.8 )
Unrealized gain (loss) on marketable equity investment 101.2 (96.7 ) (36.6 ) 102.7 40.5
Loss on early extinguishment of debt (3.1 )
Other expense (0.1 )                        
Net income (loss) before income taxes 89.2 (107.2 ) (42.2 ) 106.9 44.3
Income tax benefit (expense) 0.2       1.4       (0.2 )     (1.0 )     (0.8 )
Net income (loss) $ 89.4       $ (105.8 )     $ (42.4 )     $ 105.9       $ 43.5  
Income (loss) per share - basic $ 0.82 $ (1.00 ) $ (0.43 ) $ 1.07 $ 0.45
Income (loss) per share - diluted $ 0.82 $ (1.00 ) $ (0.43 ) $ 1.06 $ 0.45
 
(a) The Company adopted the new accounting standard, ASC 842, “Leases”, in the first quarter of 2019. Revenue includes metered power reimbursements of $28.5 million, $28.4 million, $29.3 million, $24.8 million and $21.6 million for the three months ended March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively.
                   

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

 
March 31, December 31, September 30, June 30, March 31,
2019     2018     2018     2018     2018
Assets
Investment in real estate:
Land $ 124.9 $ 118.5 $ 125.2 $ 107.4 $ 104.6
Buildings and improvements 1,649.2 1,677.5 1,587.3 1,461.1 1,400.8
Equipment 2,799.6       2,630.2       2,452.5       2,050.3       1,959.5  
Gross operating real estate 4,573.7 4,426.2 4,165.0 3,618.8 3,464.9
Less accumulated depreciation (1,122.5 )     (1,054.5 )     (973.4 )     (900.3 )     (836.4 )
Net operating real estate 3,451.2 3,371.7 3,191.6 2,718.5 2,628.5
Construction in progress, including land under development 734.7 744.9 738.6 452.6 435.3
Land held for future development 200.4       176.4       189.6       74.2       54.4  
Total investment in real estate, net 4,386.3       4,293.0       4,119.8       3,245.3       3,118.2  
Cash and cash equivalents 126.0 64.4 61.0 116.2 228.7
Rent and other receivables 248.7 234.9 224.6 201.4 200.5
Restricted cash 1.3
Operating lease right-of-use assets 83.8
Equity investments 299.3 198.1 282.2 318.8 216.1
Goodwill 455.1 455.1 455.1 455.1 455.1
Intangible assets, net 226.1 235.7 248.4 190.5 196.8
Other assets 114.8       111.3       102.0       101.4       82.9  
Total assets $ 5,941.4       $ 5,592.5       $ 5,493.1       $ 4,628.7       $ 4,498.3  
Liabilities and equity
Debt $ 2,898.6 $ 2,624.7 $ 2,576.2 $ 2,179.5 $ 2,178.3
Capital lease obligations 33.4 33.4 36.9 14.9 15.9
Operating lease liabilities 119.6
Lease financing arrangements 123.3 125.8 127.8 131.3
Construction costs payable 155.5 195.3 160.5 113.3 89.0
Accounts payable and accrued expenses 81.6 121.3 96.8 91.4 66.7
Dividends payable 51.5 51.0 49.7 46.5 46.4
Deferred revenue and prepaid rents 155.9 148.6 139.5 127.1 116.1
Deferred tax liability 67.2       68.9       68.7              
Total liabilities 3,563.3       3,366.5       3,254.1       2,700.5       2,643.7  
Stockholders' equity
Preferred stock, $.01 par value, 100,000,000 authorized; no shares issued
or outstanding
Common stock, $.01 par value, 500,000,000 shares authorized and
110,316,652 and 108,329,314 shares issued and outstanding at March 31,
2019 and December 31, 2018, respectively 1.1 1.1 1.1 1.0 1.0
Additional paid in capital 2,938.2 2,837.4 2,685.3 2,281.5 2,268.0
Accumulated deficit (552.2 ) (600.2 ) (444.3 ) (353.0 ) (413.1 )
Accumulated other comprehensive loss (9.0 )     (12.3 )     (3.1 )     (1.3 )     (1.3 )
Total stockholders' equity 2,378.1       2,226.0       2,239.0       1,928.2       1,854.6  
Total liabilities and equity $ 5,941.4       $ 5,592.5       $ 5,493.1       $ 4,628.7       $ 4,498.3  
       

CyrusOne Inc.

Condensed Consolidated Statements of Cash Flow

(Dollars in millions)

(Unaudited)

 

Three Months
Ended March 31,
2019

   

Three Months
Ended March 31,
2018

Cash flows from operating activities:
Net income $ 89.4 $ 43.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 102.1 74.6
Provision for bad debt expense 0.5
Unrealized gain on marketable equity investment (101.2 ) (40.5 )
Loss on early extinguishment of debt 3.1
Interest expense amortization, net 1.2 0.7
Stock-based compensation expense 4.5 3.9
Provision for taxes (0.8 )
Operating lease ROU amortization and liability accretion 5.0
Other (0.5 )
 
Change in operating assets and liabilities:
Rent and other receivables, net and other assets (18.0 ) (18.0 )
Accounts payable and accrued expenses (39.8 ) (28.9 )
Deferred revenue and prepaid rents 7.1 5.3
Operating leases (5.1 )      
Net cash provided by operating activities 43.9       44.2  
Cash flows from investing activities:
Investment in real estate (301.9 )     (145.2 )
Net cash used in investing activities (301.9 )     (145.2 )
Cash flows from financing activities:
Issuance of common stock, net 105.0 142.9
Dividends paid (50.4 ) (41.0 )
Proceeds from revolving credit facility 275.7
Proceeds from unsecured term loan 985.6
Repayments of unsecured term loan (902.7 )
Payments on capital lease obligations (0.6 ) (2.6 )
Tax payment upon exercise of equity awards (8.7 )     (4.4 )
Net cash provided by financing activities 321.0       177.8  
Effect of exchange rate changes on cash, cash equivalents and restricted cash (0.1 )      
Net increase in cash, cash equivalents and restricted cash 62.9 76.8
Cash, cash equivalents and restricted cash at beginning of period 64.4       151.9  
Cash, cash equivalents and restricted cash at end of period $ 127.3       $ 228.7  
 
Supplemental disclosure of cash flow information:
Cash paid for interest, including amounts capitalized of $9.3 million and $5.1 million in 2019 and 2018, respectively $ 46.7 $ 42.2
Cash paid for income taxes 0.3
 
Non-cash investing and financing activities:
Construction costs and other payables 155.5 89.0
Dividends payable 51.5 46.4
               

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,
2019     2018     $     %     2019     2018     2018     2018     2018
Net Operating Income    
Revenue $ 225.0 $ 196.6 $ 28.4 14 % $ 225.0 $ 221.3 $ 206.6 $ 196.9 $ 196.6
Property operating expenses   83.3         67.8   15.5 23 %   83.3         78.0         77.7         68.9         67.8  
Net Operating Income (NOI) $ 141.7       $ 128.8   $ 12.9 10 % $ 141.7       $ 143.3       $ 128.9       $ 128.0       $ 128.8  
NOI as a % of Revenue 63.0 % 65.5 % 63.0 % 64.8 % 62.4 % 65.0 % 65.5 %
Reconciliation of Net Income (Loss) to Adjusted EBITDA:
Net income (loss) $ 89.4 $ 43.5 $ 45.9 n/m $ 89.4 $ (105.8 ) $ (42.4 ) $ 105.9 $ 43.5
Interest expense 23.7 20.8 2.9 14 % 23.7 25.3 25.8 22.8 20.8
Income tax benefit (expense) (0.2 ) 0.8 (1.0 ) n/m (0.2 ) (1.4 ) 0.2 1.0 0.8
Depreciation and amortization   102.1         74.6   27.5 37 %   102.1         97.9         84.0         77.6         74.6  
EBITDA (Nareit definition)(a) $ 215.0       $ 139.7   $ 75.3 54 % $ 215.0       $ 16.0       $ 67.6       $ 207.3       $ 139.7  
 
Transaction, acquisition, integration and other related expenses 0.3 1.9 (1.6 ) (84 )% 0.3 1.4 1.1 0.4 1.9
Legal claim costs 0.1 0.2 (0.1 ) (50 )% 0.1 0.2 0.1 0.1 0.2
Stock-based compensation expense 4.5 3.9 0.6 15 % 4.5 4.5 4.6 4.5 3.9
Severance and management transition costs 0.1 0.7 (0.6 ) (86 )% 0.1 1.6 0.7
Loss on early extinguishment of debt 3.1 (3.1 ) n/m 3.1
New accounting standards and regulatory compliance and the related system implementation costs 0.3 0.5 (0.2 ) (40 )% 0.3 0.7 0.8 1.0 0.5
Unrealized (gain) loss on marketable equity investment (101.2 ) (40.5 ) (60.7 ) n/m (101.2 ) 96.7 36.6 (102.7 ) (40.5 )
Other expenses   0.1           0.1 n/m   0.1         0.1                          
Adjusted EBITDA $ 119.2       $ 109.5   $ 9.7 9 % $ 119.2       $ 121.2       $ 110.8       $ 110.6       $ 109.5  
Adjusted EBITDA as a % of Revenue 53.0 % 55.7 % 53.0 % 54.8 % 53.6 % 56.2 % 55.7 %
 
(a) We calculate Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) as GAAP net income (loss) plus interest expense, income tax benefit (expense), depreciation and amortization plus impairment losses and loss on 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 Net Operating Income

(Dollars in millions)

(Unaudited)

 
Three Months Ended
March 31, Change
2019     2018     $     %
Net Income (Loss) $ 89.4     $ 43.5 $ 45.9 n/m
Sales and marketing expenses 5.3 5.3 n/m
General and administrative expenses 22.2 19.3 2.9 15 %
Depreciation and amortization expenses 102.1 74.6 27.5 37 %
Transaction, acquisition, integration and other related expenses 0.3 1.9 (1.6 ) (84 )%
Interest expense 23.7 20.8 2.9 14 %
Unrealized gain on marketable equity investment (101.2 ) (40.5 ) (60.7 ) n/m
Loss on early extinguishment of debt 3.1 (3.1 ) n/m
Other expense 0.1 0.1 n/m
Income tax benefit (expense) (0.2 )     0.8       (1.0 )     n/m
Net Operating Income $ 141.7       $ 128.8       $ 12.9       10 %
               

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,
2019     2018     $     %     2019     2018     2018     2018     2018
Reconciliation of Net Income (Loss) to FFO and Normalized FFO:    
Net income (loss) $ 89.4 $ 43.5 $ 45.9 n/m $ 89.4 $ (105.8 ) $ (42.4 ) $ 105.9 $ 43.5
Real estate depreciation and amortization 100.1       72.5   27.6 38 % 100.1       95.5       81.9       75.6       72.5  
Funds from Operations ("FFO") - Nareit defined $ 189.5 $ 116.0 $ 73.5 63 % $ 189.5 $ (10.3 ) $ 39.5 $ 181.5 $ 116.0
 
Loss on early extinguishment of debt 3.1 (3.1 ) n/m 3.1
Unrealized (gain) loss on marketable equity investment (101.2 ) (40.5 ) (60.7 ) n/m (101.2 ) 96.7 36.6 (102.7 ) (40.5 )
New accounting standards and regulatory compliance and the related system implementation costs 0.3 0.5 (0.2 ) (40 )% 0.3 0.7 0.8 1.0 0.5
Amortization of tradenames 0.2 0.3 (0.1 ) (33 )% 0.2 0.6 0.4 0.4 0.3
Transaction, acquisition, integration and other related expenses 0.3 1.9 (1.6 ) (84 )% 0.3 1.4 1.1 0.4 1.9
Severance and management transition costs 0.1 0.7 (0.6 ) (86 )% 0.1 1.6 0.7
Legal claim costs 0.1       0.2   (0.1 ) (50 )% 0.1       0.2       0.1       0.1       0.2  
Normalized Funds from Operations (Normalized FFO) $ 89.3       $ 82.2   $ 7.1 9 % $ 89.3       $ 90.9       $ 78.5       $ 80.7       $ 82.2  
Normalized FFO per diluted common share $ 0.82 $ 0.85 $ (0.03 ) (4 )% $ 0.82 $ 0.86 $ 0.79 $ 0.81 $ 0.85
Weighted average diluted common shares outstanding 108.8 96.6 12.2 13 % 108.8 106.1 99.5 99.4 96.6
 
Additional Information:
Amortization of deferred financing costs and bond premium 1.2 0.7 0.5 71 % 1.2 1.1 1.1 1.1 0.7
Stock-based compensation expense 4.5 3.9 0.6 15 % 4.5 4.5 4.6 4.5 3.9
Non-real estate depreciation and amortization 1.9 1.8 0.1 6 % 1.9 1.8 1.7 1.6 1.8
Straight line rent adjustments(a) (10.1 ) (7.2 ) (2.9 ) 40 % (10.1 ) (8.9 ) (5.8 ) (5.8 ) (7.2 )
Deferred revenue, primarily installation revenue(b) 5.9 3.2 2.7 84 % 5.9 16.1 7.6 2.4 3.2
Leasing commissions (3.7 ) (3.2 ) (0.5 ) 16 % (3.7 ) (6.5 ) (3.3 ) (3.7 ) (3.2 )
Recurring capital expenditures (2.7 ) (2.4 ) (0.3 ) 13 % (2.7 ) (2.1 ) (3.7 ) (2.3 ) (2.4 )
          (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, Debt Schedule and Interest Summary

(Unaudited)

 

Market Capitalization (as of March 31, 2019)

 
(dollars in millions) Shares or

Equivalents

Outstanding

    Market Price

as of

March 31, 2019

    Market Value

Equivalents

(in millions)

Common shares 110,316,652 $ 52.44 $ 5,785.0
Net Debt 2,823.2
Total Enterprise Value (TEV) $ 8,608.2
       

Reconciliation of Net Debt

March 31, December 31,
(dollars in millions) 2019     2018
Long-term debt(a) $ 2,915.8 $ 2,643.0
Capital lease obligations 33.4 33.4
Less:
Cash and cash equivalents (126.0 )     (64.4 )
Net Debt $ 2,823.2       $ 2,612.0  

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

           

Debt Schedule (as of March 31, 2019)

(dollars in millions)
Long-term debt: Amount     Interest Rate     Maturity Date
Revolving credit facility - EUR(a) $ 145.8 E + 145bps(b) March 2023(c)
Revolving credit facility - USD(d) 270.0 L + 145bps(e) March 2023(c)
Term loan(f) 1,000.0 L + 140bps(g) March 2023
Term loan 300.0 L + 170bps(h) 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(i) $ 2,915.8   4.06%(j)
 
Weighted average term of debt: 5.1 years
 
(a) Amount outstanding is USD equivalent of €130 million.
(b) Interest rate as of March 31, 2019: 1.45%.
(c) Assuming exercise of one-year extension option.
(d) Amount converted into €238 million pursuant to USD-EUR cross currency swap.
(e) Interest rate as of March 31, 2019: 3.94%, adjusted interest rate pursuant to USD-EUR cross currency swap: 1.00%.
(f) In April 2019, paid down $200 million of term loan, decreasing remaining balance to $800 million.
(g) Interest rate as of March 31, 2019: 3.90%.
(h) Interest rate as of March 31, 2019: 4.20%.
(i) Excludes adjustment for deferred financing costs.
(j) Weighted average interest rate calculated using lower interest rate on swapped amount.
       

Interest Summary

Three Months Ended
March 31,     December 31,     March 31, Growth %
(dollars in millions) 2019     2018     2018     Yr/Yr
Interest expense and fees $ 31.8 $ 32.7 $ 25.2 26 %
Amortization of deferred financing costs and bond premium 1.2 1.1 0.7 71 %
Capitalized interest (9.3 )     (8.5 )     (5.1 ) 82 %
Total interest expense $ 23.7       $ 25.3       $ 20.8   14 %
           

CyrusOne Inc.

Colocation Square Footage (CSF) and CSF Leased

(Unaudited)

 
As of March 31, 2019   As of December 31, 2018   As of March 31, 2018

Market

Colocation
Space (CSF)(a)
(000)

 

CSF
Leased(b)

 

Colocation
Space (CSF)(a)
(000)

 

CSF
Leased(b)

 

Colocation
Space (CSF)(a)
(000)

 

CSF
Leased(b)

Northern Virginia 1,113 91 % 881 96 % 673 94 %
Dallas 621 70 % 621 70 % 555 81 %
Phoenix 509 100 % 509 100 % 509 91 %
Cincinnati 402 85 % 402 92 % 404 92 %
Houston 308 70 % 308 73 % 308 74 %
San Antonio 300 100 % 300 100 % 273 100 %
New York Metro 228 77 % 218 86 % 218 83 %
Chicago 207 71 % 213 69 % 213 67 %
Austin 106 80 % 106 80 % 106 73 %
Raleigh-Durham 83     99 %   76     97 %   76     88 %
Total - Domestic 3,876 85 % 3,633 87 % 3,335 87 %
Frankfurt 98 99 % 98 99 % %
London 84 100 % 84 99 % 10 94 %
Singapore 3     22 %   3     22 %   3     22 %
Total - International 185     98 %   185     98 %   13     76 %
Total - Portfolio 4,061     86 %   3,819     88 %   3,348     86 %
Stabilized Properties(c) 3,721     90 %   3,540     92 %   3,024     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.
       

CyrusOne Inc.

2019 Guidance

 
Previous Revised

Category

2019 Guidance

2019 Guidance

Total Revenue $960 - 1,000 million $960 - 1,000 million
Lease and Other Revenues from Customers $835 - 865 million $835 - 865 million
Metered Power Reimbursements $125 - 135 million $125 - 135 million
Adjusted EBITDA $500 - 525 million $500 - 525 million
Normalized FFO per diluted common share $3.10 - 3.20 $3.30 - 3.40
Capital Expenditures $950 - 1,100 million $900 - 1,000 million
Development(1) $940 - 1,085 million $890 - 985 million
Recurring $10 - 15 million $10 - 15 million
 

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

 

CyrusOne is updating guidance for full year 2019, increasing the guidance range for Normalized FFO per diluted common share, decreasing and tightening the guidance ranges for Capital Expenditures and Capital Expenditures - Development, and reaffirming the ranges for all other metrics. 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 forward-looking guidance for GAAP financial measures (other than 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, 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.

                         

CyrusOne Inc.

Data Center Portfolio

As of March 31, 2019

(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 $ 72,569 305 85 % 85 % 82 44 % 111 498 44
Northern Virginia - Sterling V Northern Virginia 47,126 383 83 % 92 % 11 100 % 145 539 64 63
Northern Virginia - Sterling VI Northern Virginia 43,513 272 88 % 88 % 35 % 307 57
Northern Virginia - Sterling II Northern Virginia 34,163 159 100 % 100 % 9 100 % 55 223 30
Houston - Houston West I Houston 31,118 112 89 % 89 % 11 100 % 37 161 3 28
San Antonio III San Antonio 30,940 132 100 % 100 % 9 100 % 43 184 24
Somerset I New York Metro 30,764 106 79 % 80 % 27 89 % 89 222 203 13
Cincinnati - 7th Street*** Cincinnati 30,716 197 77 % 77 % 6 61 % 175 378 46 16
Chicago - Aurora I Chicago 28,531 113 98 % 98 % 34 100 % 223 371 27 71
Dallas - Lewisville* Dallas 26,451 114 76 % 83 % 11 84 % 54 180 21
Totowa - Madison** New York Metro 26,192 51 92 % 92 % 22 100 % 59 133 6
Cincinnati - North Cincinnati Cincinnati 25,150 65 99 % 99 % 45 79 % 53 163 65 14
Phoenix - Chandler VI Phoenix 22,265 148 100 % 100 % 6 100 % 32 187 10 24
Frankfurt I Frankfurt 21,803 53 97 % 97 % 8 91 % 57 118 18
San Antonio I San Antonio 21,286 44 100 % 100 % 6 83 % 46 96 11 12
Wappingers Falls I** New York Metro 20,690 37 69 % 69 % 20 99 % 15 72 3
Phoenix - Chandler II Phoenix 20,529 74 100 % 100 % 6 53 % 26 105 12
Houston - Houston West II Houston 20,300 80 77 % 77 % 4 79 % 55 139 11 12
Northern Virginia - Sterling I Northern Virginia 19,780 78 100 % 100 % 6 81 % 49 132 12
Phoenix - Chandler I Phoenix 19,633 74 100 % 100 % 35 13 % 39 147 31 16
Raleigh-Durham I Raleigh-Durham 18,809 83 93 % 99 % 13 100 % 82 178 246 12
Phoenix - Chandler III Phoenix 18,780 68 100 % 100 % 2 % 30 101 14
Northern Virginia - Sterling III Northern Virginia 17,921 79 100 % 100 % 7 100 % 34 120 15
Austin III Austin 16,950 62 69 % 69 % 15 98 % 21 98 67 6
Houston - Galleria Houston 15,842 63 54 % 54 % 23 50 % 25 112 14
Austin II Austin 14,409 44 95 % 95 % 2 100 % 22 68 5
San Antonio II San Antonio 14,188 64 100 % 100 % 11 100 % 41 117 12
Florence Cincinnati 13,574 53 99 % 99 % 47 87 % 40 140 9
Phoenix - Chandler V Phoenix 12,216 72 100 % 100 % 1 95 % 16 89 94 12
Phoenix - Chandler IV Phoenix 11,272 73 100 % 100 % 3 100 % 27 103 12
Cincinnati - Hamilton* Cincinnati 10,800 47 74 % 74 % 1 100 % 35 83 10
Northern Virginia - Sterling IV Northern Virginia 10,728 81 100 % 100 % 7 100 % 34 122 15
San Antonio IV San Antonio 10,657 60 100 % 100 % 12 100 % 27 99 12
London I* London 9,143 25 100 % 100 % 12 56 % 58 95 9 10
London II* London 8,745 49 100 % 100 % 10 100 % 93 151 4 15
London - Great Bridgewater** London 6,485 10 94 % 96 % % 1 11 1
Houston - Houston West III Houston 6,089 53 35 % 36 % 10 100 % 32 95 209 6
Stamford - Riverbend** New York Metro 5,392 20 23 % 23 % % 8 28 2
Cincinnati - Mason Cincinnati 5,227 34 100 % 100 % 26 98 % 17 78 4
Norwalk I** New York Metro 4,362 13 99 % 99 % 4 61 % 41 58 87 2
Frankfurt II Frankfurt 3,974 45 100 % 100 % 7 100 % 72 123 10 25
Chicago - Lombard Chicago 2,419 14 62 % 62 % 4 100 % 12 30 29 3
Stamford - Omega** New York Metro 1,244 % % 19 84 % 4 22
Totowa - Commerce** New York Metro 644 % % 20 44 % 6 26
Cincinnati - Blue Ash* Cincinnati 643 6 36 % 36 % 7 100 % 2 15 1
Singapore - Inter Business Park** Singapore 376 3 22 % 22 % % 3 1
South Bend - Crescent* Chicago 55     3     3 %   3 %       %   5   9   11   1
Stabilized Properties - Total $ 834,464     3,721     89 %   90 %   657     73 %   2,148   6,526   1,237   710
 
CyrusOne Inc.
Data Center Portfolio
As of March 31, 2019
(Unaudited)
                         
Operating Net Rentable Square Feet (NRSF)(a)

Powered
Shell
Available
for Future
Development
(NRSF)(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 $ 834,464 3,721 89 % 90 % 657 73 % 2,148 6,526 1,237 710
 

Pre-Stabilized Properties(b)

Dallas - Carrollton (DH #6) Dallas 6,994 75 76 % 76 % % 21 96 6
Chicago - Aurora II (DH #1) Chicago 2,835 77 31 % 36 % 45 % 14 136 272 16
Dallas - Carrollton (DH #7) Dallas 1,354 48 21 % 35 % % 48 6
Dallas - Allen (DH #1) Dallas 83 79 1 % 7 % % 58 137 204 6
Northern Virginia - Sterling VIII Northern Virginia     61     %   37 %       %       61         6
All Properties - Total $ 845,729     4,061     83 %   86 %   702     69 %   2,241     7,004     1,712     750
 
* Indicates properties in which we hold a leasehold interest in the building shell and land. All data center infrastructure has been constructed by us and is owned by us.
** Indicates properties in which we hold a leasehold interest in the building shell, land, and all data center infrastructure.
*** The information provided for the Cincinnati - 7th Street property includes data for two facilities, one of which we lease and one of which we own.
 
(a) Represents the total square feet of a building under lease or available for lease based on engineers' drawings and estimates but does not include space held for development or space used by CyrusOne.
(b) Stabilized properties include data halls that have been in service for at least 24 months or are at least 85% leased. Pre-stabilized properties include data halls that have been in service for less than 24 months and are less than 85% leased.
(c) Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of March 31, 2019 multiplied by 12. For the month of March 2019, customer reimbursements were $114.0 million annualized and consisted of reimbursements by customers across all facilities with separately metered power. Customer reimbursements under leases with separately metered power vary from month-to-month based on factors such as our customers' utilization of power and the suppliers' pricing of power. From April 1, 2017 through March 31, 2019, customer reimbursements under leases with separately metered power constituted between 10.2% and 15.1% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of March 31, 2019 was $851.9 million. Our annualized effective rent was greater than our annualized rent as of March 31, 2019 because our positive straight-line and other adjustments and amortization of deferred revenue exceeded our negative straight-line adjustments due to factors such as the timing of contractual rent escalations and customer prepayments for services.
(d) 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.
(e) Percent occupied is determined based on CSF billed to customers under signed leases as of March 31, 2019 divided by total CSF. Leases signed but that have not commenced billing as of March 31, 2019 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 NRSF at an operating facility that is currently leased or readily available for lease as space other than CSF, which is typically office and other space.
(h) Percent occupied is determined based on Office & Other space being billed to customers under signed leases as of March 31, 2019 divided by total Office & Other space. Leases signed but not commenced as of March 31, 2019 are not included.
(i) Represents infrastructure support space, including mechanical, telecommunications and utility rooms, as well as building common areas.
(j) Represents the NRSF at an operating facility that is currently leased or readily available for lease. This excludes existing vacant space held for development.
(k) Represents space that is under roof that could be developed in the future for operating NRSF, rounded to the nearest 1,000.
(l) Critical load capacity represents the aggregate power available for lease and exclusive use by customers expressed in terms of megawatts. The capacity reported is for non-redundant megawatts, as we can develop flexible solutions to our customers at multiple resiliency levels. Does not sum to total due to rounding.
 

CyrusOne Inc.

NRSF Under Development

As of March 31, 2019

(Dollars in millions)

(Unaudited)

           
    NRSF Under Development(a)       Under Development Costs(b)
Facilities

Metropolitan

Area

 

Estimated
Completion
Date

 

Colocation
Space

(CSF)
(000)

 

Office &
Other
(000)

 

Supporting
Infrastructure
(000)

 

Powered
Shell(c)
(000)

  Total (000)  

Critical
Load MW
Capacity(d)

 

Actual
to

Date(e)

 

Estimated

Costs to

Completion(f)

    Total
Phoenix - Chandler VII Phoenix 2Q'19       269   269 60   1-3     61-63
Somerset II New York Metro 2Q'19 2.0 2-3 2-3
Raleigh-Durham I Raleigh-Durham 2Q'19 3.0 3 1-3 4-6
London I London 2Q'19 13 13 5.0 2 10-12 12-14
Northern Virginia - Sterling V Northern Virginia 3Q'19 2.0 9-11 9-11
Northern Virginia - Sterling VIII Northern Virginia 3Q'19 61 4 25 90 24.0 11 103-115 114-126
Austin III Austin 3Q'19 3.0 17-19 17-19
Dallas - Carrollton Dallas 3Q'19 6.0 8 11-12 19-20
London II London 3Q'19 32 32 13.0 6 24-28 30-34
Frankfurt II Frankfurt 3Q'19 45 3 48 18.0 10 40-50 50-60
Amsterdam I Amsterdam 4Q'19 39 28 40 194 301 6.0 11 55-66 66-77
Northern Virginia - Sterling VII Northern Virginia 1Q'20 167 167 2 89-98 91-100
Northern Virginia - Sterling IX Northern Virginia 1Q'20 307 307 2 85-94 87-96
Frankfurt III Frankfurt 2Q'20             258     258         2     64-75     66-77
Total 190     35     65     1,195     1,484     82.0     $ 117     511-589     628-706
(a)   Represents NRSF at a facility for which activities have commenced or are expected to commence in the next 2 quarters to prepare the space for its intended use. Estimates and timing are subject to change. May not sum to total due to rounding.
(b) London development costs are GBP-denominated and shown as USD-equivalent using exchange rate of 1.30. Frankfurt and Amsterdam development costs are EUR-denominated and shown as USD-equivalent using exchange rate of 1.12.
(c) Represents NRSF under construction that, upon completion, will be powered shell available for future development into operating NRSF.
(d) Critical load capacity represents the aggregate power available for lease and exclusive use by customers expressed in terms of megawatts. The capacity reported is for non-redundant megawatts, as we can develop flexible solutions to our customers at multiple resiliency levels.
(e) Actual to date is the cash investment as of March 31, 2019. 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 NRSF under development. There may be an increase in costs if customers require greater power density.
       
Capital Expenditures - Investment in Real Estate Three Months Ended
March 31
(dollars in millions) 2019
Capital expenditures - investment in real estate $299.2
 

CyrusOne Inc.

Land Available for Future Development (Acres)

As of March 31, 2019

 (Unaudited)

 

    As of
Market     March 31, 2019

Amsterdam

8
Atlanta 44
Austin 22
Chicago 23
Cincinnati

98

Dallas 57
Houston 20
Northern Virginia 24
Phoenix 96
Quincy, Washington 48
San Antonio 22
Santa Clara 23  
Total Available(a) 484  
Book Value of Total Available $ 200.4 million

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

                             

CyrusOne Inc.

Leasing Statistics - Lease Signings

As of March 31, 2019

(Unaudited)

 
Period      

Number
of Leases(a)

     

Total CSF
Signed(b)

     

Total kW
Signed(c)

     

Total MRR
Signed (000)(d)

     

Weighted
Average
Lease Term(e)

1Q'19 422 93,000 15,557 $2,267 56
Prior 4Q Avg. 482 171,500 25,792 $3,180 88
4Q'18 482 41,000 6,768 $1,678 73
3Q'18 500 114,000 15,118 $2,218 60
2Q'18 506 305,000 51,919 $5,453 143
1Q'18 439 226,000 29,364 $3,370 77
 
(a) Number of leases represents each agreement with a customer. A lease agreement could include multiple spaces, and a customer could have multiple leases.
(b) CSF represents the NRSF at an operating facility that is leased as colocation space, where customers locate their servers and other IT equipment.
(c) Represents maximum contracted kW that customers may draw during lease period. Additionally, we can develop flexible solutions for our customers at multiple resiliency levels, and the kW signed is unadjusted for this factor.
(d) Monthly recurring rent is defined as the average monthly contractual rent during the term of the lease. It includes the monthly impact of installation charges of approximately $0.3 million in 2Q'18 and 3Q'18, $0.2 million in 1Q'18 and 1Q'19, and $0.1 million in 4Q'18.
(e) Calculated on a CSF-weighted basis.
               

CyrusOne Inc.

New MRR Signed - Existing vs. New Customers

As of March 31, 2019

(Dollars in thousands)

(Unaudited)

New MRR(a) Signed ($000)

 
2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19
Existing Customers $ 2,322 $ 1,418 $ 1,063 $ 3,149 $ 4,429 $ 2,072 $ 1,226 $ 2,102
New Customers $ 145   $ 810   $ 400   $ 221   $ 1,024   $ 146   $ 452   $ 165  
Total $ 2,467 $ 2,228 $ 1,463 $ 3,370 $ 5,453 $ 2,218 $ 1,678 $ 2,267
 
% from Existing Customers 94 % 64 % 73 % 93 % 81 % 93 % 73 % 93 %
 

(a) Monthly recurring rent is defined as the average monthly contractual rent during the term of the lease. It includes the monthly impact of installation

charges of approximately $0.3 million in 2Q'18 and 3Q'18, $0.2 million in 2Q'17-1Q'18 and 1Q'19, and $0.1 million in 4Q'18.

 

CyrusOne Inc.

Customer Sector Diversification(a)

As of March 31, 2019

(Unaudited)

                 
Principal Customer Industry    

Number of
Locations

   

Annualized
Rent(b) (000)

   

Percentage of
Portfolio
Annualized
Rent(c)

   

Weighted
Average
Remaining
Lease Term in
Months(d)

1 Information Technology 11 $ 182,949 21.6 % 106.5
2 Information Technology 5 53,621 6.3 % 64.7
3 Information Technology 10 46,747 5.5 % 36.6
4 Information Technology 7 30,674 3.6 % 29.6
5 Information Technology 5 19,262 2.3 % 43.8
6 Financial Services 1 19,142 2.3 % 144.0
7 Research and Consulting Services 3 15,983 1.9 % 21.3
8 Healthcare 2 15,141 1.8 % 105.0
9 Information Technology 7 14,143 1.7 % 27.3
10 Industrials 5 11,178 1.3 % 14.8
11 Telecommunication Services 7 10,140 1.2 % 20.6
12 Telecommunication Services 2 9,645 1.1 % 30.1
13 Financial Services 2 9,428 1.1 % 53.9
14 Consumer Staples 3 8,820 1.1 % 22.7
15 Telecommunication Services 1 8,140 1.0 % 103.6
16 Information Technology 2 7,998 1.0 % 63.3
17 Information Technology 4 7,718 0.9 % 107.2
18 Information Technology 2 7,136 0.8 % 17.0
19 Financial Services 1 6,600 0.8 % 14.0
20 Information Technology 4 6,587       0.8 %     52.3
$ 491,052       58.1 %     72.5
 
(a)   Customers and their affiliates are consolidated.
(b) Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of March 31, 2019, multiplied by 12. For the month of March 2019, customer reimbursements were $114.0 million annualized and consisted of reimbursements by customers across all facilities with separately metered power. Customer reimbursements under leases with separately metered power vary from month-to-month based on factors such as our customers' utilization of power and the suppliers' pricing of power. From April 1, 2017 through March 31, 2019, customer reimbursements under leases with separately metered power constituted between 10.2% and 15.1% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of March 31, 2019 was $851.9 million. Our annualized effective rent was greater than our annualized rent as of March 31, 2019 because our positive straight-line and other adjustments and amortization of deferred revenue exceeded our negative straight-line adjustments due to factors such as the timing of contractual rent escalations and customer prepayments for services.
(c) Represents the customer’s total annualized rent divided by the total annualized rent in the portfolio as of March 31, 2019, which was approximately $845.7 million.
(d) Weighted average based on customer’s percentage of total annualized rent expiring and is as of March 31, 2019, assuming that customers exercise no renewal options and exercise all early termination rights that require payment of less than 50% of the remaining rents. Early termination rights that require payment of 50% or more of the remaining lease payments are not assumed to be exercised because such payments approximate the profitability margin of leasing that space to the customer, such that we do not consider early termination to be economically detrimental to us.
 

CyrusOne Inc.

Lease Distribution

As of March 31, 2019

(Unaudited)

 
NRSF Under Lease(a)    

Number of

Customers(b)

   

Percentage of

All Customers

   

Total

Leased

NRSF(c) (000)

   

Percentage of

Portfolio

Leased NRSF

   

Annualized

Rent(d) (000)

   

Percentage of

Annualized Rent

0-999 673     68 %     145     3 %     $ 73,764     9 %
1,000-2,499 122 12 % 189 3 % 44,243 5 %
2,500-4,999 75 7 % 265 5 % 45,607 5 %
5,000-9,999 45 5 % 321 6 % 50,661 6 %
10,000+ 81       8 %     4,579       83 %     631,454       75 %
Total 996       100 %     5,498       100 %     $ 845,729       100 %
 
(a)   Represents all leases in our portfolio, including colocation, office and other leases.
(b) Represents the number of customers occupying data center, office and other space as of March 31, 2019. This may vary from total customer count as some customers may be under contract, but have yet to occupy space.
(c) Represents the total square feet at a facility under lease and that has commenced billing, excluding space held for development or space used by CyrusOne. A customer’s leased NRSF is estimated based on such customer’s direct CSF or office and light-industrial space plus management’s estimate of infrastructure support space, including mechanical, telecommunications and utility rooms, as well as building common areas.
(d) Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of March 31, 2019, multiplied by 12. For the month of March 2019, customer reimbursements were $114.0 million annualized and consisted of reimbursements by customers across all facilities with separately metered power. Customer reimbursements under leases with separately metered power vary from month-to-month based on factors such as our customers' utilization of power and the suppliers' pricing of power. From April 1, 2017 through March 31, 2019, customer reimbursements under leases with separately metered power constituted between 10.2% and 15.1% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of March 31, 2019 was $851.9 million. Our annualized effective rent was greater than our annualized rent as of March 31, 2019 because our positive straight-line and other adjustments and amortization of deferred revenue exceeded our negative straight-line adjustments due to factors such as the timing of contractual rent escalations and customer prepayments for services.
 

CyrusOne Inc.

Lease Expirations

As of March 31, 2019

(Unaudited)

                           
Year(a)

Number of
Leases
Expiring(b)

   

Total Operating
NRSF Expiring
(000)

   

Percentage of
Total NRSF

   

Annualized
Rent(c) (000)

   

Percentage of
Annualized Rent

   

Annualized Rent
at Expiration(d) (000)

   

Percentage of
Annualized Rent
at Expiration

Available 1,505 21 %
Month-to-Month 763 83 1 % $ 27,307 3 % $ 29,687 3 %
2019 1,702 305 4 % 58,850 7 % 58,954 6 %
2020 2,074 687 10 % 128,439 15 % 130,553 14 %
2021 1,875 714 10 % 127,074 15 % 135,849 14 %
2022 603 542 8 % 82,748 10 % 89,636 9 %
2023 279 789 11 % 97,696 12 % 125,172 13 %
2024 97 294 4 % 41,920 5 % 55,366 6 %
2025 47 185 3 % 29,543 4 % 33,471 4 %
2026 34 621 9 % 88,450 10 % 96,293 10 %
2027 20 456 7 % 67,667 8 % 87,520 9 %
2028 17 266 4 % 29,888 4 % 35,252 4 %
2029 - Thereafter 18       558       8 %     $ 66,148       7 %     $ 77,437       8 %
Total 7,529       7,004       100 %     $ 845,729       100 %     $ 955,190       100 %
 
(a)   Leases that were auto-renewed prior to March 31, 2019 are shown in the calendar year in which their current auto-renewed term expires. Unless otherwise stated in the footnotes, the information set forth in the table assumes that customers exercise no renewal options and exercise all early termination rights that require payment of less than 50% of the remaining rents. Early termination rights that require payment of 50% or more of the remaining lease payments are not assumed to be exercised.
(b) Number of leases represents each agreement with a customer. A lease agreement could include multiple spaces and a customer could have multiple leases.
(c) Represents monthly contractual rent (defined as cash rent including customer reimbursements for metered power) under existing customer leases as of March 31, 2019, multiplied by 12. For the month of March 2019, customer reimbursements were $114.0 million annualized and consisted of reimbursements by customers across all facilities with separately metered power. Customer reimbursements under leases with separately metered power vary from month-to-month based on factors such as our customers' utilization of power and the suppliers' pricing of power. From April 1, 2017 through March 31, 2019, customer reimbursements under leases with separately metered power constituted between 10.2% and 15.1% of annualized rent. After giving effect to abatements, free rent and other straight-line adjustments, our annualized effective rent as of March 31, 2019 was $851.9 million. Our annualized effective rent was greater than our annualized rent as of March 31, 2019 because our positive straight-line and other adjustments and amortization of deferred revenue exceeded our negative straight-line adjustments due to factors such as the timing of contractual rent escalations and customer prepayments for services.
(d) Represents the final monthly contractual rent under existing customer leases that had commenced as of March 31, 2019, multiplied by 12.

Contacts

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

Contacts

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