CyrusOne Reports Fourth Quarter and Full Year 2020 Earnings

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Signed $49.3 Million in Annualized GAAP Revenue and 31 Megawatts in 4Q’20

Company-Record Leasing Year with $156.8 Million in Annualized GAAP Revenue Signed

CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT, today announced fourth quarter and full year 2020 earnings.

Highlights

Category

4Q’20

vs. 4Q’19

FY’20

vs. FY’19

Revenue

$268.4 million

6%

$1,033.5 million

5%

Net income (loss)

$19.0 million

n/m

$41.4 million

-%

Adjusted EBITDA

$135.9 million

(1)%

$537.1 million

5%

Normalized FFO

$114.3 million

1%

$459.4 million

12%

Net income (loss) per diluted common share

$0.15

n/m

$0.35

(3)%

Normalized FFO per diluted common share

$0.94

(5)%

$3.90

7%

  • Leased 31 megawatts ("MW") and 162,000 colocation square feet ("CSF") in the fourth quarter, totaling $49.3 million in annualized GAAP revenue
    – For full year 2020, signed leases totaling 101 MW and 616,000 CSF, representing $156.8 million in annualized GAAP revenue(1), the highest annual leasing total in the Company’s history

  • Backlog of approximately $101 million in annualized GAAP revenue as of the end of the fourth quarter representing approximately $830 million in total contract value

  • Expansion into Paris, France, one of the leading data center markets in Europe, with a 25-year lease on a 13-acre site and development of the first phase of a fully pre-leased data center

  • Entered into a forward sale agreement in the fourth quarter through the at-the-market ("ATM") equity program with respect to approximately 1.07 million shares of common stock, which will result in estimated net proceeds of approximately $75 million upon settlement by November 2021
    – Combined with forward sale agreements entered into in the second and third quarters of 2020, which will result in estimated net proceeds of approximately $410 million upon settlement by September 2021, the Company has approximately $485 million in available forward equity

  • Raised approximately $177 million through the sale of approximately 1.9 million American depository shares ("ADSs") of GDS Holdings Limited ("GDS") in the fourth quarter of 2020 and January 2021

"The fourth quarter bookings included a significant contribution from our hyperscale customers and more than $30 million in annualized revenue signed across our U.S. markets, closing out a record leasing year for the company with nearly $160 million in annualized revenue signed," said Bruce W. Duncan, president and chief executive officer of CyrusOne. "The $101 million revenue backlog positions us well for continued growth, and we have a strong balance sheet with more than $1.7 billion in available liquidity, including nearly $500 million in available forward equity, to support this growth. We are also excited to expand into France with a fully pre-leased data center, extending our footprint into another key European market and further enhancing our offering for our customers."

Fourth Quarter 2020 Financial Results

Revenue was $268.4 million for the fourth quarter, compared to $253.9 million for the same period in 2019, an increase of 6%. The increase in revenue was driven primarily by a 10% increase in occupied CSF and additional interconnection services, partially offset by the Company’s receipt of $4.7 million in lease termination fees in the fourth quarter of 2019.

Net income was $19.0 million for the fourth quarter, compared to net loss of $(52.1) million in the same period in 2019. Net income for the fourth quarter included a $4.1 million gain associated with a change in fair value on the undesignated portion of the Company’s net investment hedge compared to a $(13.0) million loss in the fourth quarter of 2019. Net loss for the fourth quarter of 2019 also included a $(71.8) million loss on extinguishment of debt related to the repurchase or early redemption of the Company’s 5.000% Senior Notes due 2024 and the 5.375% Senior Notes due 2027. The Company recognized a $19.7 million gain during the fourth quarter of 2020 on its marketable equity investment in GDS, compared to a $27.2 million gain in the fourth quarter of 2019. Net income per diluted common share2 was $0.15 in the fourth quarter of 2020, compared to net loss per diluted common share of $(0.46) in the same period in 2019.

Net operating income ("NOI")3 was $158.1 million for the fourth quarter, compared to $160.1 million in the same period in 2019, a decrease of (1)%. Adjusted EBITDA4 was $135.9 million for the fourth quarter, compared to $137.9 million in the same period in 2019, also a decrease of (1)%. As noted above, the Company received $4.7 million in lease termination fees in the fourth quarter of 2019.

Normalized Funds From Operations ("Normalized FFO")5 was $114.3 million for the fourth quarter, compared to $113.7 million in the same period in 2019, an increase of 1%. Normalized FFO per diluted common share was $0.94 in the fourth quarter of 2020, compared to $0.99 in the same period in 2019, a decrease of (5)%.

Leasing Activity

CyrusOne leased approximately 31 MW of power and 162,000 CSF in the fourth quarter, representing approximately $4.1 million in monthly recurring rent, inclusive of the monthly impact of installation charges. The leasing for the quarter represents approximately $49.3 million in annualized GAAP revenue6, excluding estimates for pass-through power. The weighted average lease term of the new leases, based on square footage, is 117 months (9.8 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 percentage7 for the fourth quarter was 0.9%, compared to 0.7% for the same period in 2019.

Portfolio Development and Percentage CSF Leased

In the fourth quarter, the Company completed construction on 194,000 CSF, 48 MW of power capacity, and 209,000 square feet of powered shell in Frankfurt, San Antonio, Council Bluffs (IA), Phoenix, and Northern Virginia. Percentage CSF leased8 as of the end of the fourth quarter was 87% for stabilized properties9 and 84% overall. In addition, the Company has development projects underway in Frankfurt, Dublin, Paris, London, the New York Metro area, Cincinnati, San Antonio, and Northern Virginia that are expected to add approximately 289,000 CSF and 73 MW of power capacity plus 279,000 square feet of powered shell.

Balance Sheet and Liquidity

As of December 31, 2020, the Company had gross asset value10 totaling approximately $8.7 billion, an increase of approximately 15% over gross asset value as of December 31, 2019. CyrusOne had $3.45 billion of long-term debt11, $271 million of cash and cash equivalents, and nearly $960 million available under its unsecured revolving credit facility as of December 31, 2020. Net debt11 was $3.20 billion as of December 31, 2020, representing approximately 27% of the Company's total enterprise value as of December 31, 2020 of $12.0 billion, or 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 liquidity12 was $1.71 billion as of December 31, 2020.

The Company entered into a forward sale agreement in the fourth quarter through the ATM equity program with respect to approximately 1.07 million shares of common stock, which will result in estimated net proceeds of approximately $75 million upon settlement by November 2021. Combined with forward sale agreements entered into in the second and third quarters of 2020, which will result in estimated net proceeds of approximately $410 million upon settlement by September 2021, the Company has approximately $485 million in available forward equity (no portion of these forward sale agreements has been settled as of February 17, 2021). As of December 31, 2020, there was approximately $151 million in remaining availability under the ATM equity program.

Additionally, the Company raised approximately $177 million through the sale of approximately 1.9 million ADSs of GDS in the fourth quarter of 2020 and January 2021. As of January 2021, the Company has liquidated its investment in GDS and no longer owns any ADSs.

Dividend

On October 28, 2020, the Company announced a dividend of $0.51 per share of common stock for the fourth quarter of 2020. The dividend was paid on January 8, 2021, to stockholders of record at the close of business on January 4, 2021.

Additionally, today the Company is announcing a dividend of $0.51 per share of common stock for the first quarter of 2021. The dividend will be paid on April 9, 2021, to stockholders of record at the close of business on March 26, 2021.

Guidance

CyrusOne is issuing guidance for full year 2021. 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, which continues to evolve rapidly. While the impact on our business has not been significant to date and vaccines have begun to be distributed, 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

2020 Results

2021 Guidance

Total Revenue

$1,033 million

$1,105 - 1,145 million

Lease and Other Revenues from Customers

$872 million

$920 - 950 million

Metered Power Reimbursements

$161 million

$185 - 195 million

Adjusted EBITDA

$537 million

$570 - 590 million

Normalized FFO per diluted common share

$3.90

$3.90 - 4.00

Capital Expenditures

$910 million

$925 - 1,025 million

Development(1)

$896 million

$905 - 985 million

Recurring

$14 million

$20 - 40 million

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

Upcoming Conferences and Events (All Virtual)

  • Raymond James Institutional Investors Conference on March 1-3

  • Morgan Stanley Technology, Media & Telecom Conference on March 1-4

  • Citi Global Property CEO Conference on March 7-10

  • Deutsche Bank Media, Internet & Telecom Conference on March 8-10

Conference Call Details

CyrusOne will host a conference call on February 18, 2021, at 11:00 AM Eastern Time (10:00 AM Central Time) to discuss its results for the fourth quarter and full year 2020. 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 February 18, 2021, through March 4, 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 10150988.

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 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 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 real estate investment trusts (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 liquidity or as indicative of funds available to fund our cash needs, including our ability to make distributions. These measures also should not be used as supplements to or substitutes for cash flow from operating activities computed in accordance with GAAP. The Company believes that Net Debt provides a useful measure of liquidity and financial health.

1Includes exercise of previously disclosed (in 3Q’19) paid reservation for 4.5 MW and 30,000 CSF totaling approximately $5.5 million in annualized GAAP revenue in 2Q’20.

2Net 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 120.6 million for the fourth quarter of 2020 and 114.4 million for the fourth quarter of 2019.

3We 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, Interest expense, net, Gain on marketable equity investment, Loss on early extinguishment of debt, Impairment losses and (gain) loss on asset disposals, Foreign currency and derivative losses, net, Other (income) expense, Income tax expense (benefit) and other 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 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.

4Adjusted 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 (gain) 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; New accounting standards and regulatory compliance and the related system implementation costs; Gain on marketable equity investment; Foreign currency and derivative losses (gains), net; Other expense (income); and other 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.

5We 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 (gain) 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 losses (gains), net; New accounting standards and regulatory compliance and the related system implementation costs; Amortization of tradenames; Transaction, acquisition, integration and other related expenses; Cash severance and management transition costs; Severance-related stock compensation costs; Legal claim costs; and other items as appropriate. 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 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.

6Annualized GAAP revenue is equal to monthly recurring rent, defined as average monthly contractual rent during the term of the lease plus the monthly impact of installation charges, multiplied by 12. It can be shown both inclusive and exclusive of the Company’s estimate of customer reimbursements for metered power.

7Recurring 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.

8Percentage 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.

9Stabilized properties include data halls that have been in service for at least 24 months or are at least 85% leased.

10Gross asset value is defined as total assets plus accumulated depreciation.

11Long-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.

12Liquidity 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 Street, Ste. 2200

Bruce W. Duncan, President & Chief Executive Officer

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

Tim Long

(212) 526 4043

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

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

Mizuho Securities

Omotayo Okusanya, CFA

(646) 949-9672

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

CyrusOne Inc.

Summary of Financial Data

(Dollars in millions, except per share amounts)

Three Months

December 31,

September 30,

December 31,

Growth %

2020

2020

2019

Yr/Yr

Revenue

$

268.4

$

262.8

$

253.9

6

%

Net operating income

158.1

153.1

160.1

(1

)%

Net income (loss)

19.0

(37.3

)

(52.1

)

n/m

Funds from Operations ("FFO") - Nareit defined

135.1

82.2

53.6

n/m

Normalized Funds from Operations ("Normalized FFO")

114.3

114.4

113.7

1

%

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

120.6

119.2

114.4

5

%

Net income (loss) per share - basic

$

0.15

$

(0.32

)

$

(0.46

)

n/m

Net income (loss) per share - diluted

$

0.15

$

(0.32

)

$

(0.46

)

n/m

Normalized FFO per diluted common share

$

0.94

$

0.96

$

0.99

(5

)%

Adjusted EBITDA

$

135.9

$

132.2

$

137.9

(1

)%

Adjusted EBITDA as a % of Revenue

50.6

%

50.3

%

54.3

%

(3.7) pts

As of

December 31,

September 30,

December 31,

Growth %

2020

2020

2019

Yr/Yr

Balance Sheet Data

Gross investment in real estate

$

7,033.4

$

6,791.6

$

6,089.5

16

%

Accumulated depreciation

(1,767.9

)

(1,663.4

)

(1,379.2

)

28

%

Total investment in real estate, net

5,265.5

5,128.2

4,710.3

12

%

Cash and cash equivalents

271.4

156.5

76.4

n/m

Market value of common equity

8,810.4

8,433.2

7,511.9

17

%

Long-term debt

3,446.1

3,236.3

2,915.0

18

%

Net debt

3,203.8

3,109.0

2,870.4

12

%

Total enterprise value

12,014.2

11,542.2

10,382.3

16

%

Net debt to LQA Adjusted EBITDA(a)

5.0x

5.1x

5.0x

—x

Dividend Activity

Dividends per share

$

0.51

$

0.51

$

0.50

2

%

Portfolio Statistics

Data centers

53

51

47

13

%

Stabilized CSF (000)

4,398

4,134

3,937

12

%

Stabilized CSF % leased

87

%

87

%

88

%

(1) pts

Total CSF (000)

4,665

4,471

4,165

12

%

Total CSF % leased

84

%

84

%

85

%

(1) pts

Total GSF (000)

8,038

7,710

7,135

13

%

(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

Twelve Months

Ended December 31,

Change

Ended December 31,

Change

2020

2019

$

%

2020

2019

$

%

Revenue(a)

$

268.4

$

253.9

$

14.5

6

%

$

1,033.5

$

981.3

$

52.2

5

%

Operating expenses:

Property operating expenses

110.3

93.8

16.5

18

%

411.6

383.4

28.2

7

%

Sales and marketing

5.3

4.5

0.8

18

%

18.3

20.2

(1.9

)

(9

)%

General and administrative

22.4

21.8

0.6

3

%

99.3

83.5

15.8

19

%

Depreciation and amortization

118.5

108.1

10.4

10

%

449.4

417.7

31.7

8

%

Transaction, acquisition, integration and other related expenses

1.5

3.3

(1.8

)

(55

)%

3.7

8.4

(4.7

)

(56

)%

Impairment losses and (gain) loss on asset disposals

0.1

(0.1

)

(100

)%

11.1

1.1

10.0

n/m

Total operating expenses

258.0

231.6

26.4

11

%

993.4

914.3

79.1

9

%

Operating income

10.4

22.3

(11.9

)

(53

)%

40.1

67.0

(26.9

)

(40

)%

Interest expense, net

(14.5

)

(17.6

)

3.1

(18

)%

(57.7

)

(82.0

)

24.3

(30

)%

Gain on marketable equity investment

19.7

27.2

(7.5

)

(28

)%

89.5

132.3

(42.8

)

(32

)%

Loss on early extinguishment of debt

(71.8

)

71.8

(100

)%

(6.5

)

(71.8

)

65.3

(91

)%

Foreign currency and derivative gains (losses), net

4.1

(13.0

)

17.1

n/m

(27.6

)

(7.5

)

(20.1

)

n/m

Other income (expense)

0.7

(0.7

)

(100

)%

(0.3

)

0.3

...

)%

Net income (loss) before income taxes

19.7

(52.2

)

71.9

n/m

37.8

37.7

0.1

%

Income tax (expense) benefit

(0.7

)

0.1

(0.8

)

n/m

3.6

3.7

(0.1

)

(3

)%

Net income (loss)

$

19.0

$

(52.1

)

$

71.1

n/m

$

41.4

$

41.4

$

%

Income (loss) per share - basic

$

0.15

$

(0.46

)

$

0.61

n/m

$

0.35

$

0.36

$

(0.01

)

(3

)%

Income (loss) per share - diluted

$

0.15

$

(0.46

)

$

0.61

n/m

$

0.35

$

0.36

$

(0.01

)

(3

)%

(a)

Revenue includes metered power reimbursements of $44.9 million and $37.5 million for the three months ended December 31, 2020 and 2019, respectively, and includes metered power reimbursements of $161.4 million and $138.8 million for the years ended December 31, 2020 and 2019, respectively.

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

December 31,

December 31,

Change

2020

2019

$

%

Assets

Investment in real estate:

Land

$

208.8

$

147.6

$

61.2

41

%

Buildings and improvements

2,035.2

1,761.4

273.8

16

%

Equipment

3,538.9

3,028.2

510.7

17

%

Gross operating real estate

5,782.9

4,937.2

845.7

17

%

Less accumulated depreciation

(1,767.9

)

(1,379.2

)

(388.7

)

28

%

Net operating real estate

4,015.0

3,558.0

457.0

13

%

Construction in progress, including land under development

982.2

946.3

35.9

4

%

Land held for future development

268.3

206.0

62.3

30

%

Total investment in real estate, net

5,265.5

4,710.3

555.2

12

%

Cash and cash equivalents

271.4

76.4

195.0

n/m

Rent and other receivables (net of allowance for doubtful accounts of $3.5 and $1.8 as of December 31, 2020 and 2019, respectively)

334.2

291.9

42.3

14

%

Restricted cash

1.5

1.3

0.2

15

%

Operating lease right-of-use assets, net

211.4

161.9

49.5

31

%

Equity investments

67.1

135.1

(68.0

)

(50

)%

Goodwill

455.1

455.1

%

Intangible assets (net of accumulated amortization of $249.3 and $207.5 as of December 31, 2020 and 2019, respectively)

157.8

196.1

(38.3

)

(20

)%

Other assets

133.4

113.9

19.5

17

%

Total assets

$

6,897.4

$

6,142.0

$

755.4

12

%

Liabilities and equity

Debt

$

3,409.0

$

2,886.6

$

522.4

18

%

Finance lease liabilities

29.1

31.8

(2.7

)

(8

)%

Operating lease liabilities

249.1

195.8

53.3

27

%

Construction costs payable

133.0

176.3

(43.3

)

(25

)%

Accounts payable and accrued expenses

151.3

122.7

28.6

23

%

Dividends payable

63.3

58.6

4.7

8

%

Deferred revenue and prepaid rents

174.1

163.7

10.4

6

%

Deferred tax liability

53.0

60.5

(7.5

)

(12

)%

Other liabilities

77.3

11.4

65.9

n/m

Total liabilities

4,339.2

3,707.4

631.8

17

%

Stockholders' equity

Preferred stock, $.01 par value, 100,000,000 authorized; no shares issued or outstanding

n/m

Common stock, $.01 par value, 500,000,000 shares authorized and 120,442,521 and 114,808,898 shares issued and outstanding at December 31, 2020 and 2019, respectively

1.2

1.1

0.1

9

%

Additional paid in capital

3,537.3

3,202.0

335.3

10

%

Accumulated deficit

(966.6

)

(767.3

)

(199.3

)

26

%

Accumulated other comprehensive loss

(13.7

)

(1.2

)

(12.5

)

n/m

Total stockholders’ equity

2,558.2

2,434.6

123.6

5

%

Total liabilities and equity

$

6,897.4

$

6,142.0

$

755.4

12

%

CyrusOne Inc.

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share amounts)

(Unaudited)

For the three months ended:

December 31,

September 30,

June 30,

March 31,

December 31,

2020

2020

2020

2020

2019

Revenue(a)

$

268.4

$

262.8

$

256.4

$

245.9

$

253.9

Operating expenses:

Property operating expenses

110.3

109.7

99.0

92.6

93.8

Sales and marketing

5.3

4.5

3.8

4.7

4.5

General and administrative

22.4

29.7

20.3

26.9

21.8

Depreciation and amortization

118.5

113.1

109.7

108.1

108.1

Transaction, acquisition, integration and other related expenses

1.5

1.6

0.1

0.5

3.3

Impairment losses and (gain) loss on asset disposals

8.8

2.4

(0.1

)

0.1

Total operating expenses

258.0

267.4

235.3

232.7

231.6

Operating income (loss)

10.4

(4.6

)

21.1

13.2

22.3

Interest expense, net

(14.5

)

(13.3

)

(13.9

)

(16.0

)

(17.6

)

Gain on marketable equity investment

19.7

4.7

50.4

14.7

27.2

Loss on early extinguishment of debt

(3.1

)

(3.4

)

(71.8

)

Foreign currency and derivative gains (losses), net

4.1

(22.9

)

(13.9

)

5.1

(13.0

)

Other income (expense)

0.1

(0.1

)

0.7

Net income (loss) before income taxes

19.7

(39.2

)

43.8

13.5

(52.2

)

Income tax (expense) benefit

(0.7

)

1.9

1.2

1.2

0.1

Net income (loss)

$

19.0

$

(37.3

)

$

45.0

$

14.7

$

(52.1

)

Income (loss) per share - basic

$

0.15

$

(0.32

)

$

0.39

$

0.13

$

(0.46

)

Income (loss) per share - diluted

$

0.15

$

(0.32

)

$

0.39

$

0.13

$

(0.46

)

(a)

Revenue includes metered power reimbursements of $44.9 million, $44.6 million, $37.1 million, $34.8 million, and $37.5 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

December 31,

September 30,

June 30,

March 31,

December 31,

2020

2020

2020

2020

2019

Assets

Investment in real estate:

Land

$

208.8

$

181.2

$

175.5

$

172.2

$

147.6

Buildings and improvements

2,035.2

1,918.4

1,857.9

1,786.3

1,761.4

Equipment

3,538.9

3,341.7

3,229.5

3,106.4

3,028.2

Gross operating real estate

5,782.9

5,441.3

5,262.9

5,064.9

4,937.2

Less accumulated depreciation

(1,767.9

)

(1,663.4

)

(1,562.7

)

(1,469.5

)

(1,379.2

)

Net operating real estate

4,015.0

3,777.9

3,700.2

3,595.4

3,558.0

Construction in progress, including land under development

982.2

1,085.9

1,024.8

990.6

946.3

Land held for future development

268.3

264.4

217.2

205.4

206.0

Total investment in real estate, net

5,265.5

5,128.2

4,942.2

4,791.4

4,710.3

Cash and cash equivalents

271.4

156.5

70.7

57.3

76.4

Rent and other receivables, net

334.2

306.9

307.0

305.3

291.9

Restricted cash

1.5

1.4

1.3

1.3

1.3

Operating lease right-of-use assets, net

211.4

206.9

204.7

208.6

161.9

Equity investments

67.1

178.1

184.9

153.1

135.1

Goodwill

455.1

455.1

455.1

455.1

455.1

Intangible assets, net

157.8

166.4

174.9

184.5

196.1

Other assets

133.4

112.8

127.3

121.9

113.9

Total assets

$

6,897.4

$

6,712.3

$

6,468.1

$

6,278.5

$

6,142.0

Liabilities and equity

Debt

$

3,409.0

$

3,197.8

$

3,156.9

$

3,047.0

$

2,886.6

Finance lease liabilities

29.1

29.2

28.8

29.4

31.8

Operating lease liabilities

249.1

244.3

240.5

243.0

195.8

Construction costs payable

133.0

168.2

155.7

183.4

176.3

Accounts payable and accrued expenses

151.3

145.3

127.0

121.0

122.7

Dividends payable

63.3

63.1

59.7

58.7

58.6

Deferred revenue and prepaid rents

174.1

166.8

166.2

167.3

163.7

Deferred tax liability

53.0

55.4

55.8

57.0

60.5

Other liabilities

77.3

37.8

16.8

7.9

11.4

Total liabilities

4,339.2

4,107.9

4,007.4

3,914.7

3,707.4

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 120,442,521 and 114,808,898 shares issued and outstanding at December 31, 2020 and 2019, respectively

1.2

1.2

1.2

1.2

1.1

Additional paid in capital

3,537.3

3,532.9

3,305.9

3,199.9

3,202.0

Accumulated deficit

(966.6

)

(923.9

)

(824.7

)

(811.0

)

(767.3

)

Accumulated other comprehensive loss

(13.7

)

(5.8

)

(21.7

)

(26.3

)

(1.2

)

Total stockholders' equity

2,558.2

2,604.4

2,460.7

2,363.8

2,434.6

Total liabilities and equity

$

6,897.4

$

6,712.3

$

6,468.1

$

6,278.5

$

6,142.0

CyrusOne Inc.

Condensed Consolidated Statements of Cash Flows

(Dollars in millions)

(Unaudited)

Twelve Months Ended
December 31, 2020

Twelve Months Ended
December 31, 2019

Three Months Ended
December 31, 2020

Three Months Ended
December 31, 2019

Cash flows from operating activities:

Net income (loss)

$

41.4

$

41.4

$

19.0

$

(52.1

)

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

Depreciation and amortization

449.4

417.7

118.5

108.1

Provision for bad debt expense

1.7

1.7

1.4

1.9

Gain on marketable equity investment

(89.5

)

(132.3

)

(19.7

)

(27.2

)

Foreign currency and derivative losses (gains), net

27.6

7.5

(4.1

)

13.0

Proceeds from swap terminations

2.9

3.6

3.6

(Gain) loss on asset disposals

(0.1

)

0.4

0.2

Impairment losses

11.2

0.7

Loss on early extinguishment of debt

6.5

71.8

71.8

Interest expense amortization, net

6.8

5.0

1.6

1.5

Stock-based compensation expense

18.4

16.7

4.7

4.3

Deferred income tax (benefit) expense

(6.9

)

(7.5

)

0.2

(1.1

)

Operating lease cost

20.4

20.3

5.4

5.7

Other expense (income)

0.1

0.2

(0.5

)

0.2

Change in operating assets and liabilities:

Rent and other receivables, net and other assets

(58.0

)

(74.2

)

(28.9

)

(22.7

)

Accounts payable and accrued expenses

39.0

(0.8

)

17.0

(12.6

)

Deferred revenue and prepaid rents

8.8

15.6

6.5

(0.5

)

Operating lease liabilities

(23.4

)

(22.1

)

(6.7

)

(5.4

)

Net cash provided by operating activities

456.3

365.7

114.4

88.7

Cash flows from investing activities:

Investments in real estate

(910.5

)

(876.4

)

(218.3

)

(149.1

)

Proceeds from sale of equity investments

144.1

199.0

112.3

(0.8

)

Equity investments

(6.5

)

(3.8

)

(3.5

)

Proceeds from the sale of real estate assets

0.5

1.3

0.2

0.4

Net cash used in investing activities

(772.4

)

(679.9

)

(105.8

)

(153.0

)

Cash flows from financing activities:

Issuance of common stock, net

325.7

357.2

(0.2

)

103.9

Dividends paid

(236.2

)

(210.4

)

(61.5

)

(56.9

)

Proceeds from revolving credit facility

763.7

656.7

168.2

122.4

Repayments of revolving credit facility

(966.1

)

(182.5

)

0.6

0.7

Proceeds from Euro bond

553.5

(7.7

)

Proceeds from unsecured term loan

1,100.0

Repayments of unsecured term loan

(1,400.0

)

(200.0

)

Proceeds from issuance of senior notes

395.2

1,197.4

1,197.4

Repayments of senior notes

(1,200.0

)

(1,200.0

)

Payment of debt extinguishment costs

(72.0

)

(72.0

)

Payment of deferred financing costs

(16.4

)

(9.4

)

(1.3

)

(9.4

)

Payments on finance lease liabilities

(3.5

)

(2.9

)

(1.5

)

(0.8

)

Tax payment upon exercise of equity awards

(8.7

)

(9.3

)

(0.1

)

(0.3

)

Net cash provided by financing activities

507.2

324.8

96.5

85.0

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

4.1

2.7

9.9

4.0

Net increase in cash, cash equivalents and restricted cash

195.2

13.3

115.0

24.7

Cash, cash equivalents and restricted cash at beginning of period

77.7

64.4

157.9

53.0

Cash, cash equivalents and restricted cash at end of period

$

272.9

$

77.7

$

272.9

$

77.7

Supplemental disclosure of cash flow information:

Cash paid for interest, including amounts capitalized of $22.6 million and $32.9 million in 2020 and 2019, respectively

$

62.4

$

123.0

$

26.1

$

14.0

Cash paid for income taxes

3.7

3.5

0.5

0.5

Non-cash investing and financing activities:

Construction costs payable

133.0

176.3

133.0

176.3

Dividends payable

63.3

58.6

63.3

58.6

CyrusOne Inc.

Reconciliation of Net Income (Loss) to Net Operating Income

(Dollars in millions)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

Change

December 31,

Change

2020

2019

$

%

2020

2019

$

%

Net income (loss)

$

19.0

$

(52.1

)

$

71.1

n/m

$

41.4

$

41.4

$

%

Sales and marketing expenses

5.3

4.5

0.8

18

%

18.3

20.2

(1.9

)

(9

)%

General and administrative expenses

22.4

21.8

0.6

3

%

99.3

83.5

15.8

19

%

Depreciation and amortization expenses

118.5

108.1

10.4

10

%

449.4

417.7

31.7

8

%

Transaction, acquisition, integration and other related expenses

1.5

3.3

(1.8

)

(55

)%

3.7

8.4

(4.7

)

(56

)%

Interest expense, net

14.5

17.6

(3.1

)

(18

)%

57.7

82.0

(24.3

)

(30

)%

Gain on marketable equity investment

(19.7

)

(27.2

)

7.5

(28

)%

(89.5

)

(132.3

)

42.8

(32

)%

Loss on early extinguishment of debt

71.8

(71.8

)

(100

)%

6.5

71.8

(65.3

)

(91

)%

Impairment losses and (gain) loss on asset disposals

0.1

(0.1

)

(100

)%

11.1

1.1

10.0

n/m

Foreign currency and derivative losses, net

(4.1

)

13.0

(17.1

)

n/m

27.6

7.5

20.1

n/m

Other (income) expense

(0.7

)

0.7

(100

)%

0.3

(0.3

)

(100

)%

Income tax expense (benefit)

0.7

(0.1

)

0.8

n/m

(3.6

)

(3.7

)

0.1

(3

)%

Net Operating Income

$

158.1

$

160.1

$

(2.0

)

(1

)%

$

621.9

$

597.9

$

24.0

4

%

CyrusOne Inc.

Net Operating Income and Reconciliation of Net Income (Loss) to Adjusted EBITDA

(Dollars in millions)

(Unaudited)

Twelve Months Ended

Three Months Ended

December 31,

Change

December 31,

September 30,

June 30,

March 31,

December 31,

2020

2019

$

%

2020

2020

2020

2020

2019

Net Operating Income

Revenue

$

1,033.5

$

981.3

$

52.2

5

%

$

268.4

$

262.8

$

256.4

$

245.9

$

253.9

Property operating expenses

411.6

383.4

28.2

7

%

110.3

109.7

99.0

92.6

93.8

Net Operating Income (NOI)

$

621.9

$

597.9

$

24.0

4

%

$

158.1

$

153.1

$

157.4

$

153.3

$

160.1

NOI as a % of Revenue

60.2

%

60.9

%

58.9

%

58.3

%

61.4

%

62.3

%

63.1

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

Net income (loss)

$

41.4

$

41.4

$

%

$

19.0

$

(37.3

)

$

45.0

$

14.7

$

(52.1

)

Interest expense, net

57.7

82.0

(24.3

)

(30

)%

14.5

13.3

13.9

16.0

17.6

Income tax (benefit) expense

(3.6

)

(3.7

)

0.1

(3

)%

0.7

(1.9

)

(1.2

)

(1.2

)

(0.1

)

Depreciation and amortization expenses

449.4

417.7

31.7

8

%

118.5

113.1

109.7

108.1

108.1

Impairment losses and (gain) loss on asset disposals

11.1

1.1

10.0

n/m

8.8

2.4

(0.1

)

0.1

EBITDA (Nareit definition)(a)

$

556.0

$

538.5

$

17.5

3

%

$

152.7

$

96.0

$

169.8

$

137.5

$

73.6

Transaction, acquisition, integration and other related expenses

3.7

8.4

(4.7

)

(56

)%

1.5

1.6

0.1

0.5

3.3

Legal claim costs

0.3

1.1

(0.8

)

(73

)%

0.1

0.1

0.1

0.5

Stock-based compensation expense

15.5

16.7

(1.2

)

(7

)%

4.4

4.2

3.4

3.5

4.3

Cash severance and management transition costs

14.1

(0.6

)

14.7

n/m

0.9

6.4

6.8

(0.7

)

Severance-related stock compensation costs

2.9

2.9

n/m

0.2

2.6

0.1

Loss on early extinguishment of debt

6.5

71.8

(65.3

)

(91

)%

3.1

3.4

71.8

New accounting standards and regulatory compliance and the related system implementation costs

0.8

(0.8

)

(100

)%

Gain on marketable equity investment

(89.5

)

(132.3

)

42.8

(32

)%

(19.7

)

(4.7

)

(50.4

)

(14.7

)

(27.2

)

Foreign currency and derivative losses (gains), net

27.6

7.5

20.1

n/m

(4.1

)

22.9

13.9

(5.1

)

13.0

Other expense (income)

0.3

(0.3

)

(100

)%

(0.1

)

0.1

(0.7

)

Adjusted EBITDA

$

537.1

$

512.2

$

24.9

5

%

$

135.9

$

132.2

$

136.8

$

132.2

$

137.9

Adjusted EBITDA as a % of Revenue

52.0

%

52.2

%

50.6

%

50.3

%

53.4

%

53.8

%

54.3

%

(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, Depreciation and amortization expenses and Impairment losses and (gain) loss 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)

Twelve Months Ended

Three Months Ended

December 31,

Change

December 31,

September 30,

June 30,

March 31,

December 31,

2020

2019

$

%

2020

2020

2020

2020

2019

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

Net income (loss)

$

41.4

$

41.4

$

%

$

19.0

$

(37.3

)

$

45.0

$

14.7

$

(52.1

)

Real estate depreciation and amortization

440.1

408.5

31.6

8

%

116.1

110.7

107.5

105.8

105.6

Impairment losses and (gain) loss on asset disposals

11.1

1.1

10.0

n/m

8.8

2.4

(0.1

)

0.1

Funds from Operations ("FFO") - Nareit defined

$

492.6

$

451.0

$

41.6

9

%

$

135.1

$

82.2

$

154.9

$

120.4

$

53.6

Loss on early extinguishment of debt

6.5

71.8

(65.3

)

(91

)%

3.1

3.4

71.8

Gain on marketable equity investment

(89.5

)

(132.3

)

42.8

(32

)%

(19.7

)

(4.7

)

(50.4

)

(14.7

)

(27.2

)

Foreign currency and derivative losses (gains), net

27.6

7.5

20.1

n/m

(4.1

)

22.9

13.9

(5.1

)

13.0

New accounting standards and regulatory compliance and the related system implementation costs

0.8

(0.8

)

(100

)%

Amortization of tradenames

1.2

1.3

(0.1

)

(8

)%

0.4

0.2

0.3

0.3

0.4

Transaction, acquisition, integration and other related expenses

3.7

8.4

(4.7

)

(56

)%

1.5

1.6

0.1

0.5

2.3

Cash severance and management transition costs

14.1

(0.6

)

14.7

n/m

0.9

6.4

6.8

(0.7

)

Severance-related stock compensation costs

2.9

2.9

n/m

0.2

2.6

0.1

Legal claim costs

0.3

1.1

(0.8

)

(73

)%

0.1

0.1

0.1

0.5

Normalized Funds from Operations (Normalized FFO)

$

459.4

$

409.0

$

50.4

12

%

$

114.3

$

114.4

$

118.9

$

111.8

$

113.7

Normalized FFO per diluted common share

$

3.90

$

3.63

$

0.27

7

%

$

0.94

$

0.96

$

1.03

$

0.97

$

0.99

Weighted average diluted common shares outstanding

117.6

112.5

5.1

5

%

120.6

119.2

115.7

115.1

114.4

Additional Information:

Amortization of deferred financing costs and bond premium / discount

6.8

5.0

1.8

36

%

1.6

1.6

1.6

2.0

1.4

Stock-based compensation expense

15.5

16.7

(1.2

)

(7

)%

4.4

4.2

3.4

3.5

4.3

Non-real estate depreciation and amortization

8.1

7.9

0.2

3

%

2.0

2.1

2.0

2.0

2.1

Straight line rent adjustments(a)

(15.0

)

(26.6

)

11.6

(44

)%

(8.0

)

(6.6

)

(2.1

)

1.7

(3.8

)

Above and below market rent amortization

(0.3

)

(0.2

)

(0.1

)

50

%

(0.1

)

(0.1

)

(0.1

)

(0.1

)

(0.1

)

Deferred tax expense (benefit)

(7.1

)

(7.3

)

0.2

(3

)%

(0.2

)

(2.7

)

(2.2

)

(2.0

)

(1.0

)

Deferred revenue, primarily installation revenue(b)

2.6

7.8

(5.2

)

(67

)%

2.3

0.2

2.3

(2.2

)

(1.0

)

Leasing commissions

(15.2

)

(14.4

)

(0.8

)

6

%

(4.3

)

(5.3

)

(3.2

)

(2.4

)

(4.8

)

Recurring capital expenditures

(13.8

)

(9.9

)

(3.9

)

39

%

(0.8

)

(3.1

)

(6.4

)

(3.5

)

(1.1

)

(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 December 31, 2020)

(dollars in millions)

Shares or
Equivalents
Outstanding

Market Price
as of
December 31, 2020

Market Value
Equivalents
(in millions)

Common shares

120,442,521

$

73.15

$

8,810.4

Net Debt

3,203.8

Total Enterprise Value (TEV)

$

12,014.2

Reconciliation of Net Debt

December 31,

September 30,

December 31,

(dollars in millions)

2020

2020

2019

Long-term debt(a)

$

3,446.1

$

3,236.3

$

2,915.0

Finance lease liabilities

29.1

29.2

31.8

Less:

Cash and cash equivalents

(271.4

)

(156.5

)

(76.4

)

Net Debt

$

3,203.8

$

3,109.0

$

2,870.4

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

Interest Summary

Three Months Ended

December 31,

September 30,

December 31,

% Change

(dollars in millions)

2020

2020

2019

Yr/Yr

Interest expense and fees, net

$

18.5

$

17.3

$

22.9

(19

)%

Amortization of deferred financing costs and bond premium / discount

1.6

1.6

1.4

14

%

Capitalized interest

(5.6

)

(5.6

)

(6.7

)

(16

)%

Total interest expense, net

$

14.5

$

13.3

$

17.6

(18

)%

CyrusOne Inc.

Debt Schedule and Debt Covenants

(Unaudited)

Debt Schedule (as of December 31, 2020)

(dollars in millions)

Long-term debt:

Amount

Interest Rate

Maturity Date

Revolving credit facility - EUR(a)(b)

275.9

EURIBOR + 100 bps(c)

March 2025(d)

Revolving credit facility - GBP(a)(e)

157.0

GBP LIBOR + 100 bps(f)

March 2025(d)

Term loan(g)

800.0

USD LIBOR + 120 bps(h)

March 2025(i)

2.900% USD senior notes due 2024

600.0

2.900%

November 2024

1.450% EUR senior notes due 2027(j)

613.2

1.450%

January 2027

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(k)

$

3,446.1

2.06%(l)

Weighted average term of debt(d)(i):

6.0

years

(a)

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

(b)

Amount outstanding is USD-equivalent of €225 million.

(c)

Interest rate as of December 31, 2020: 1.00%.

(d)

Assuming exercise of 12-month extension option.

(e)

Amount outstanding is USD-equivalent of £115 million.

(f)

Interest rate as of December 31, 2020: 1.03%.

(g)

$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.

(h)

Interest rate as of December 31, 2020: 1.35%; weighted average interest rate pursuant to swaps: 1.37%.

(i)

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

(j)

Amount outstanding is USD-equivalent of €500 million.

(k)

Excludes adjustment for deferred financing costs and unamortized bond discounts.

(l)

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

Debt Covenants - Senior Notes (as of December 31, 2020)

Ratios

Requirement

December 31, 2020

Total Outstanding Indebtedness to Total Assets

≤ 60%

42%

Secured Indebtedness to Total Assets

≤ 40%

0%

Consolidated EBITDA to Interest Expense

≥ 1.50x

6.76x

Total Unencumbered Assets to Unsecured Indebtedness

≥ 150%

236%

CyrusOne Inc.

Colocation Square Footage (CSF) and CSF Leased

(Unaudited)

As of December 31, 2020

As of September 30, 2020

As of December 31, 2019

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

1,166

93

%

1,166

93

%

1,113

92

%

Dallas

621

70

%

621

71

%

621

70

%

Phoenix

581

95

%

581

92

%

509

100

%

San Antonio

434

97

%

367

96

%

300

100

%

Cincinnati

402

71

%

402

73

%

402

78

%

Houston

308

62

%

308

62

%

308

64

%

New York Metro

290

79

%

290

79

%

245

74

%

Chicago

203

79

%

203

79

%

203

77

%

Austin

106

76

%

106

77

%

106

79

%

Raleigh-Durham

94

94

%

94

95

%

83

95

%

Council Bluffs, Iowa

42

15

%

%

%

Total - Domestic

4,246

83

%

4,138

84

%

3,890

84

%

Frankfurt

229

99

%

144

99

%

144

99

%

London

148

83

%

148

83

%

128

81

%

Amsterdam

39

100

%

39

100

%

%

Singapore

3

20

%

3

20

%

3

20

%

Total - International

419

93

%

334

91

%

275

90

%

Total - Portfolio

4,665

84

%

4,471

84

%

4,165

85

%

Stabilized Properties(c)

4,398

87

%

4,134

87

%

3,937

88

%

(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

2020 Results

2021 Guidance

Total Revenue

$1,033 million

$1,105 - 1,145 million

Lease and Other Revenues from Customers

$872 million

$920 - 950 million

Metered Power Reimbursements

$161 million

$185 - 195 million

Adjusted EBITDA

$537 million

$570 - 590 million

Normalized FFO per diluted common share

$3.90

$3.90 - 4.00

Capital Expenditures

$910 million

$925 - 1,025 million

Development(1)

$896 million

$905 - 985 million

Recurring

$14 million

$20 - 40 million

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

CyrusOne is issuing guidance for full year 2021. 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, which continues to evolve rapidly. While the impact on our business has not been significant to date and vaccines have begun to be distributed, 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.

CyrusOne Inc.

Data Center Portfolio

As of December 31, 2020 (Unaudited)

Gross Square Feet (GSF)(a)

Powered
Shell Available 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

$

95,690

428

77

%

79

%

83

45

%

133

644

60

Northern Virginia - Sterling V

Northern Virginia

68,889

383

99

%

99

%

11

100

%

145

539

231

69

Northern Virginia - Sterling VI

Northern Virginia

57,786

272

100

%

100

%

35

%

307

57

Frankfurt II

Frankfurt

40,140

90

100

%

100

%

9

100

%

72

171

10

35

Somerset I

New York Metro

34,594

153

86

%

86

%

27

99

%

149

329

28

23

Northern Virginia - Sterling II

Northern Virginia

34,575

159

100

%

100

%

9

100

%

55

223

30

San Antonio III

San Antonio

32,727

132

100

%

100

%

9

100

%

43

184

24

Chicago - Aurora I

Chicago

32,686

113

98

%

98

%

34

100

%

223

371

27

52

Houston - Houston West I

Houston

28,789

112

76

%

76

%

11

100

%

37

161

3

32

Dallas - Lewisville*

Dallas

28,272

114

75

%

75

%

11

59

%

54

180

21

Phoenix - Chandler VI

Phoenix

27,460

148

100

%

100

%

6

100

%

32

187

279

24

Cincinnati - 7th Street***

Cincinnati

26,252

197

52

%

52

%

6

61

%

175

378

46

17

Totowa - Madison*

New York Metro

26,023

51

87

%

87

%

22

86

%

59

133

12

Frankfurt I

Frankfurt

25,390

53

97

%

97

%

8

91

%

57

118

18

Cincinnati - North Cincinnati

Cincinnati

22,914

65

99

%

99

%

45

79

%

53

163

62

12

Austin III

Austin

22,889

62

68

%

68

%

15

81

%

21

98

67

11

Houston - Houston West II

Houston

21,461

80

71

%

71

%

4

97

%

55

139

11

12

Phoenix - Chandler I

Phoenix

20,918

74

99

%

99

%

35

12

%

39

147

31

12

Northern Virginia - Sterling I

Northern Virginia

20,533

78

100

%

100

%

6

69

%

49

132

12

Phoenix - Chandler II

Phoenix

20,389

74

100

%

100

%

6

53

%

26

105

12

Raleigh-Durham I

Raleigh-Durham

19,907

94

88

%

94

%

16

95

%

82

192

235

14

Phoenix - Chandler III

Phoenix

19,684

68

100

%

100

%

2

%

30

101

12

San Antonio I

San Antonio

19,498

44

99

%

99

%

6

83

%

46

96

11

12

Northern Virginia - Sterling III

Northern Virginia

19,234

79

100

%

100

%

7

100

%

34

120

15

Wappingers Falls I*

New York Metro

18,591

37

62

%

62

%

20

86

%

15

72

7

Northern Virginia - Sterling IV

Northern Virginia

17,743

81

100

%

100

%

7

100

%

34

122

15

San Antonio II

San Antonio

15,917

64

100

%

100

%

11

100

%

41

117

12

Austin II

Austin

15,719

44

88

%

88

%

2

100

%

22

68

7

Phoenix - Chandler V

Phoenix

15,629

72

100

%

100

%

1

95

%

16

89

13

12

London II*

London

13,658

64

100

%

100

%

10

100

%

93

166

4

21

London I*

London

13,615

30

100

%

100

%

12

56

%

58

100

9

12

Phoenix - Chandler IV

Phoenix

12,245

73

100

%

100

%

3

100

%

27

103

12

San Antonio IV

San Antonio

12,014

60

100

%

100

%

12

100

%

27

99

12

Florence

Cincinnati

10,822

53

99

%

99

%

47

87

%

40

140

9

Houston - Galleria

Houston

9,835

63

39

%

39

%

23

24

%

25

112

11

Cincinnati - Hamilton*

Cincinnati

9,082

47

65

%

65

%

1

100

%

35

83

9

Houston - Houston West III

Houston

7,271

53

45

%

48

%

10

13

%

32

95

209

6

Chicago - Aurora II (DH #1)

Chicago

6,678

77

53

%

53

%

45

1

%

14

136

272

16

London III*

London

6,522

20

100

%

100

%

2

100

%

45

67

1

6

London - Great Bridgewater**

London

5,917

10

91

%

91

%

%

1

11

1

Stamford - Riverbend*

New York Metro

5,514

20

23

%

23

%

%

8

28

5

Norwalk I*

New York Metro

5,157

13

99

%

99

%

4

67

%

41

58

87

3

Cincinnati - Mason

Cincinnati

4,932

34

100

%

100

%

26

98

%

17

78

4

Dallas - Allen (DH #1)

Dallas

3,294

79

16

%

16

%

%

58

137

204

6

Chicago - Lombard

Chicago

2,538

14

62

%

62

%

4

45

%

12

30

29

2

Amsterdam I

Amsterdam

2,338

39

100

%

100

%

15

100

%

40

94

207

4

Frankfurt III

Frankfurt

1,606

85

100

%

100

%

13

100

%

72

170

31

San Antonio V

San Antonio

892

134

40

%

89

%

7

100

%

38

179