Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - CyrusOne Inc. | exhibit991-earningsrelease.htm |
| 8-K - 8-K - CyrusOne Inc. | a3rdqtrpressreleaseoctober.htm |
Phoenix, AZ - Chandler Dallas, TX - Carrollton Norwalk, CT
Third Quarter 2016 Earnings
October 31, 2016
10/31/2016
Safe Harbor
This presentation contains forward-looking statements regarding future events and our future results that are subject to the “safe
harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts,
are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates,
forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words
such as “expects,” “anticipates,” “predicts,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,”
“strives,” “may,” variations of such words and similar expressions are intended to identify such forward-looking statements. In
addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our
businesses, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned
these forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties,
which could cause our actual results to differ materially and adversely from those reflected in the forward-looking statements.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this release and those
discussed in other documents we file with the Securities and Exchange Commission (SEC). More information on potential risks and
uncertainties is available in our recent filings with the SEC, including CyrusOne’s Form 10-K report, Form 10-Q reports, and Form 8-
K reports. Actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake
no obligation to revise or update any forward-looking statements for any reason. For additional information, including reconciliation
of any non-GAAP financial measures, please reference the supplemental report furnished by the Company on a Current Report on
Form 8-K filed October 31, 2016. Unless otherwise noted, all data herein is as of September 30, 2016.
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 2
Third Quarter 2016 Overview
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 4
Highlights
Third quarter Adjusted EBITDA of $73.1 million increased 24% over third quarter 2015
Third quarter Normalized FFO per share of $0.67, including $0.04 per share of non-recurring income,
increased 18% over third quarter 2015
Third quarter revenue of $143.8 million increased $32.6 million or 29% over third quarter 2015
Leased 105,000 colocation square feet(1) and 17 megawatts (MW) in the third quarter totaling $27 million in
annualized GAAP revenue(2), our fourth highest leasing quarter ever and more than double the annualized
GAAP revenue(2) signed in third quarter 2015
Subsequent to the end of the quarter, leased up second expansion phase at Chicago - Aurora I facility
Backlog of $68 million in annualized GAAP revenue(2) as of the end of the third quarter, representing nearly
$550 million in total contract value
Added three Fortune 1000 companies as new customers in the third quarter, increasing the total number of
Fortune 1000 customers to 180 as of the end of the quarter
Added one of the ten largest cloud companies, increasing our total to seven out of the ten largest cloud
companies
Notes:
1. Colocation square feet (CSF) represents NRSF currently leased or available for lease as colocation space, where customers locate their servers and other IT equipment.
Net rentable square feet (NRSF) represents the total square feet of a building currently leased or available for lease, based on engineers’ drawings and estimates but does not include
space held for development or space used by CyrusOne.
2. Annualized 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.
Strong Leasing
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 5
Notes:
1. MRR, or 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 $0.1M
in each quarter.
2. Colocation square feet (CSF) represents NRSF currently leased or available for lease as colocation space, where customers locate their servers and other IT equipment.
Net rentable square feet (NRSF) represents the total square feet of a building currently leased or available for lease, based on engineers’ drawings and estimates but does not include
space held for development or space used by CyrusOne.
3Q’16 MRR(1) signed more than double 3Q’15 MRR(1) signed
Leasing volume over last four quarters more than triple the volume of the prior four quarters with a weighted
average lease term of more than 9 years
Core enterprise leasing supplemented by demand from hyper-scale customers
Larger deals with longer terms; often signed before construction begins, limiting capital at risk
$950
$1,521
$1,119 $1,112
$3,630 $3,610
$4,866
$2,250
5
10 5
5
30
25
40
17
-
5
10
15
20
25
30
35
40
45
4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16
$0
$1,000
$2,000
$3,000
$4,000
$5,000
M
W
Sign
ed
Ne
w
M
R
R
(1
)
S
ign
e
d ($
0
0
0
)
New MRR(1) and MW Signed
Customer Base
Notes:
1. Customers as of quarter-end for each period, including customers that are under contract but have yet to occupy space.
2. Customer’s ultimate parent is a Fortune 1000 company or a foreign or private company of equivalent size.
3. Based on September 2016 annualized rent. Annualized rent represents cash rent, including metered power reimbursements, for the month of September, multiplied by 12.
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 6
Customer base up 59% over last three years
Favorable credit profile with 63% of revenue generated by investment grade customers
Balanced portfolio driven by appeal of product offering across all verticals
Strength in financial services vertical enhanced by increased presence in Chicago and broad coverage of
New York metro area
Increase in demand from cloud service providers
598 656
929 952
3Q'13 3Q'14 3Q'15 3Q'16
200
400
600
800
1,000
Total Customers(1)
128
141
169 180
3Q'13 3Q'14 3Q'15 3Q'16
50
100
150
200
Fortune 1000 Customers(1)(2)
7%
9%
17%
23%
15%
10%
8%
8%
3%
IT - Managed
Services
IT - Enterprise
/ Other
IT - Cloud
Financial Services
Energy
Other
Industrials
Telecommunications
Healthcare
Revenue(3) by Vertical
CyrusOne Third Quarter 2016 Earnings Presentation
Secular Trends - Data Growth Not Slowing Down
Built for Tomorrow. Ready Today. | 7
The size of the digital universe is
expected to nearly double every two
years, growing to 180 zettabytes by
2025, 23 times larger than in 2015…
1 zettabyte would be
able to store over 2
billion years of music
10%
17%
2007 2015
Source: IDC, BofA Merrill Lynch Global Research
Percentage of Enterprise Data Center
Requirements Outsourced
…while the trend toward
outsourcing data center
requirements continues,
even though still in the early
stages
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 8
Data Growth - Mobile Traffic and Connected Devices
Sources: Cisco Visual Networking Index White Paper (Jun’16) and Ericcson Mobility Report (Jun’16)
Significant expected continued growth in global MOBILE TRAFFIC…
…and INTERCONNECTED DEVICES over the next several years
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 9
IaaS Market is Evolving Very Rapidly
Legacy Data Center
58%
Public Cloud
31%
Private Cloud
11%
Legacy Data Center
80%
Public Cloud
17%
Private Cloud
3%
…With Cloud Migration Leading the Way
2015 and 2020E Data Center Spending Breakdowns
2020E
Source Gartner, UBS estimate
2015E
Cloud Share Up ~2x in 5 years
IaaS Has Reached an Inflection Point…
Source Gartner, Company data, Morgan Stanley Research
1
2
3
4
6
9
12
16
21
27
34
0
10
20
30
40
The IaaS Market May Reach $34Bn by 2018E
IaaS Market, In $Bn
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 10
Cloud Growth - Demand Accelerating
Source: Microsoft Build 2016 conference (Mar’16)
Microsoft’s cloud business adding 120,000
new monthly customer subscriptions
Strong growth among cloud service
providers; active M&A market
Source: TrendFocus
Increased adoption of flash-based solid state
drives
IN ORDER TO VIDEO
RECORD EVERYONE IN THE
U.S. 24x7 FOR AN ENTIRE
YEAR, YOU WOULD NEED
~9.5 MILLION RACKS OF
STORAGE CAPACITY
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 11
The Cloud is Disrupting the Traditional IT Stack
Legacy IT Stack Next-Gen Cloud
Applications
Middleware
Hardware
Cloud Apps
Cloud PaaS
Cloud IaaS
platform
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 12
AWS and Azure Control 50% of a $19 Billion Market
OVER $1 BILLION IN TOTAL CONTRACT VALUE WITH CLOUD SERVICE PROVIDERS
Other
19%
AWS
40%
Next 10
6%
Azure
11%
Salesforce
5%
Rackspace
3%
IBM
6%
Google
5%
NTT
1%
Fujitsu
2%
Oracle
2%
Alibaba
(Alicloud)
2%
CyrusOne counts seven of top ten as customers
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 13
Strong Development Yields
$220 $216 $225
$278 $289
$310
$341 $357
4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16
$-
$100
$200
$300
$400
Annualized NOI(1) ($MM)
Development
Yield(2)
Gross Inv. in Real
Estate, less CIP $1,251 $1,297 $1,341 $1,546 $2,129 $1,597 $1,756 $2,036
18% 17% 17% 18% 18% 18% 17% 17%
Notes:
1. 1Q’15, 3Q’15, and 4Q’15 annualized NOI adjusted to exclude Austin 1 facility lease exit costs of $0.7M, $0.4M, and $0.3M, respectively.
2. Development Yield is calculated by dividing annualized Net Operating Income (NOI) by gross investment in real estate, less construction in progress.
$1,251
$2,129
4Q'14 3Q'16
$-
$500
$1,000
$1,500
$2,000
$2,500
Able to maintain upper-teen
yields even with 70% increase in
investment since 4Q’14
Inv. in Real Estate ($MM)
SPEED + SCALE + INNOVATION = SUCCESS!
Development yield of 17% includes development properties that are not yet stabilized
We believe we can deliver data centers faster and at a lower cost, which allows us to achieve
higher development yields
CyrusOne Third Quarter 2016 Earnings Presentation
“On Time and Under Budget”…and Open for Business
Notes:
1. Development yield calculated based on Sep’16 NOI annualized.
2. Colocation square feet (CSF) represents NRSF currently leased or available for lease as colocation space, where customers locate their servers and other IT equipment.
Net rentable square feet (NRSF) represents the total square feet of a building currently leased or available for lease, based on engineers’ drawings and estimates but does not include
space held for development or space used by CyrusOne.
$145
$214
~$300
16%
15%
15-17%
0%
10%
20%
Sterling II Sterling I & II Sterling I-III 100%
Built
$0
$50
$100
$150
$200
$250
$300
D
ev
e
lopme
n
t
Y
ie
ld
Cumu
la
ti
ve
In
ve
st
me
n
t
($MM) Northern Virginia - Sterling
(1)
Northern Virginia - Sterling II build cost < $6.5M per MW driven by:
Advanced supply chain techniques
Modular power and cooling units
Empowered decision makers to maintain efficiency of project
Fully leased data center generating Day 1 income
6 month build time
159K CSF(2)
30 MW of power capacity
100% leased
Built for Tomorrow. Ready Today. | 14
Cumulative Investment
Development Yield
CyrusOne Third Quarter 2016 Earnings Presentation
Strong Development Yields (Dallas - Carrollton)
$56 $94
$153 $185
$213
~$275
(4%)
3%
13%
16% 16%
18-20+%
(10%)
0%
10%
20%
4Q'12 4Q'13 4Q'14 4Q'15 3Q'16 100%
Built
$0
$50
$100
$150
$200
$250
$300
D
ev
e
lopm
e
n
t
Y
ie
ld
Cumu
la
ti
ve
In
ve
st
me
n
t
($MM)
DH 1
DH 2
DH 3
DH 4
DH 5
DH 7
DH 6
Dallas - Carrollton
UNBUILT
BUILT
Carrollton facility can eventually accommodate 7 data halls, each ~60-70K CSF(1); 5 currently built out -
DH 5 recently commissioned and still in lease-up phase
Between 4Q’14 and 3Q’16, annualized NOI increase of ~$15M drove development yield increase from
13% to 16% with $60M in additional investment; currently 77% utilized
Forecasted development yields are based on current build costs, leasing velocity, market prices, and
forecasted incremental operating expenses
For a facility the size of Carrollton there is significant operating leverage, and development yields could
eventually reach 18-20+%
Note:
1. Colocation square feet (CSF) represents NRSF currently leased or available for lease as colocation space, where customers locate their servers and other IT equipment.
Net rentable square feet (NRSF) represents the total square feet of a building currently leased or available for lease, based on engineers’ drawings and estimates but does not include
space held for development or space used by CyrusOne.
Built for Tomorrow. Ready Today. | 15
Cumulative Investment
Development Yield
Third Quarter 2016 Financial Review
Revenue, Adj. EBITDA, Normalized FFO and Churn
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 17
Notes:
1. Recurring rent quarterly churn is defined as any reduction in recurring rent due to customer terminations, service reductions or net pricing decreases as a percentage of rent at
the beginning of the quarter, excluding any impact from metered power reimbursements or other usage-based or variable billing.
2. Colocation square feet (CSF) represents NRSF leased or available for lease as colocation space, where customers locate their servers and other IT equipment. Net rentable
square feet (NRSF) represent the total square feet of a building leased or available for lease based on engineers’ drawings and estimates but does not include space held for
development or space used by CyrusOne.
3.1%
0.6% 0.7% 0.4%
1.3%
2.7%
3.8%
1
Q
'1
5
2
Q
'1
5
3
Q
'1
5
4
Q
'1
5
1
Q
'1
6
2
Q
'1
6
3
Q
'1
6
Revenue
($ Millions)
Churn
Recurring Rent Quarterly Churn
(1)
Revenue growth driven by:
Expansion of customer base
Increase in leased CSF(2) of 31%
compared to 3Q’15
Strong Adjusted EBITDA and
Normalized FFO growth
Driven primarily by strong growth in
revenue
Churn
Full year churn net of company-
initiated churn in 2Q/3Q expected to
be ~8%
Normalized FFO
($ Millions)
$41.2
$54.8
3Q'15 3Q'16
$0.57 $0.67
Norm. FFO
per Share
$111.2
$143.8
3Q'15 3Q'16
Adjusted EBITDA
($ Millions)
$59.0
$73.1
3Q'15 3Q'16
1.2%
1.5%
1.4%
2.4%
Year over Year P&L Analysis
Notes:
1. 3Q’15 property operating expenses and NOI adjusted (Adjusted Annualized NOI) to exclude one-time impact of $350K in costs associated with the termination of the Austin 1
facility lease.
2. Legal claim costs of $0.2 million in 3Q’16 and severance costs of $1.9 million in 3Q’15 are omitted from this presentation as they are excluded from Adjusted EBITDA.
Revenue growth of 29%
NOI up 29% over 3Q’15
driven by revenue growth
Adjusted EBITDA up 24%
over 3Q’15 driven primarily
by higher NOI, partially offset
by higher SG&A costs
SG&A increase reflects
upfront investment in talent
and systems to scale the
organization
Increase in Normalized FFO
of 33% due primarily to
growth in Adjusted EBITDA
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 18
($ Millions)
3Q 2016 3Q 2015 $ %
Revenue 143.8$ 111.2$ 32.6$ 29%
Property operating expenses
(1)
54.6 41.8 (12.8) -31%
Net Operating Income (NOI)
(1)
89.2 69.4 19.8 29%
NOI Margin 62% 62%
Selling, general & administrative
(2)
18.4 13.8 (4.6) -33%
Less: Stock-based compensation (2.3) (3.4) (1.1) 32%
Adjusted EBITDA 73.1$ 59.0$ 14.1$ 24%
Adjusted EBITDA Margin 51% 53%
Normalized FFO 54.8$ 41.2$ 13.6$ 33%
Normalized FFO per share 0.67$ 0.57$ 0.10$ 18%
Weighted Avg. Shares Diluted (MM) 81.3 72.6
Three Months Ended Fav/(Unfav)
18%
16%
15%
13%
12%
10%
6%
5%
5%
1%
Dallas
Cincinnati
NY Metro
Phoenix
San Antonio
Austin
Northern Virginia
International
Houston
Chicago
Notes:
1. Based on September 2016 annualized rent adjusted to include impact of September 30, 2016 backlog. Annualized rent represents cash rent, including metered power
reimbursements, for the month of September, multiplied by 12.
2. Colocation square feet (CSF) represents NRSF currently leased or available for lease as colocation space, where customers locate their servers and other IT equipment. Net
rentable square feet (NRSF) represent the total square feet of a building currently leased or available for lease based on engineers’ drawings and estimates but does not include
space held for development or space used by CyrusOne.
3. Utilization is calculated by dividing CSF under signed leases (whether or not the lease has commenced billing) by total CSF.
4. Stabilized properties include data halls that have been in service for at least 24 months or are at least 85% utilized.
Market Diversification / Portfolio Overview
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 19
Increasingly diversified portfolio with balanced
contribution with nine primary markets
Revenue(1) by Market
36% increase in CSF(2) capacity compared to September 30, 2015, with
Utilization
(3)
on Stabilized Properties(4) at 93%
Recent capacity additions in Dallas, Houston, Phoenix and Austin
account for decline in Utilization
(3)
compared to September 30, 2015
Portfolio Overview
As of September 30, 2016 As of September 30, 2015
Market
CSF(2) Capacity
(Sq Ft) % Utilized(3)
CSF(2) Capacity
(Sq Ft) % Utilized(3)
Dallas 431,239 83% 350,946 88%
Cincinnati 386,508 92% 419,589 91%
Houston 308,074 71% 255,094 87%
Northern Virginia 236,911 100% 74,653 69%
Phoenix 215,892 92% 149,620 100%
Austin 121,833 49% 59,995 99%
New York Metro 121,530 90% 121,434 87%
Chicago 111,660 84% 23,298 53%
San Antonio 108,064 99% 43,843 100%
International 13,200 81% 13,200 80%
Total Footprint 2,054,911 85% 1,511,672 89%
Stabilized Properties(4) 1,871,276 93%
Lease Term / Expirations
Note:
1. Based on September 2016 annualized rent adjusted to include impact of September 30, 2016 backlog. Annualized rent represents cash rent, including metered power
reimbursements, for the month of September, multiplied by 12.
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 20
Inclusive of backlog, remaining average lease term has nearly doubled since IPO to almost 4.5
years
Nearly a quarter of portfolio has lease term through at least 2025
28
53
4Q'12 3Q'16
Wtd. Avg. Remaining Lease Term (Mos.)(1)
2%
4%
17%
19%
10%
9% 9%
2%
1%
3%
4%
19%
M
TM
2
0
1
6
2
0
1
7
2
0
1
8
2
0
1
9
2
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
+
Lease Expirations(1)
Development
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 21
Market
CSF Under
Development(1,2)
Critical Load
Capacity(3)
Under
Development
Northern Virginia 120K 21 MW
San Antonio 132K 24 MW
Phoenix 73K 18 MW
Chicago 25K 6 MW
Total 350K 69 MW
Notes:
1. Colocation square feet (CSF) represents NRSF currently leased or available for lease as colocation space, where customers locate their servers and other IT equipment. Net
rentable square feet (NRSF) represent the total square feet of a building currently leased or available for lease based on engineers’ drawings and estimates but does not include
space held for development or space used by CyrusOne.
2. Represents square footage 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.
3. Represents aggregate power available for lease to and exclusive use by customers expressed in terms of megawatts. The capacity presented is for non-redundant megawatts, as
we can develop flexible solutions to our customers at multiple resiliency levels.
Development Projects
Development projects across diverse set of
markets expected to deliver 350K CSF(1) and 69
MW of power
For projects currently under development, 72% of
CSF(1) is contractually committed to customers
Estimated $278-$309 million cost to complete
Expected to be incurred during 2016 and 1H’17
As of 9/30/16
Estimated ~2.4M of CSF(1) online upon completion of projects in current development
pipeline, up 50% from ~1.6M CSF(1) at the beginning of 2016
Well positioned to capture future growth:
- ~1.0M NRSF(1) of additional powered shell available for future development upon
completion of projects in development pipeline
- 269 acres of land available for future development
Significant Growth
in Footprint
with Inventory for
Future Expansion
Capital Structure and Debt Maturity Schedule
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 22
Favorable capital structure with low leverage (Net Debt to Adjusted EBITDA(2) of 3.7x; 3.0x taking into account impact of
equity forward sale)
Substantial available liquidity of $599 million (more than $810 million taking into account impact of equity forward sale)
No significant near-term maturities w/ 5 year weighted average remaining term
S&P recently upgraded its corporate credit rating to BB- and its issue-level rating to BB, maintaining a positive outlook on
its corporate credit rating
Notes:
1. Based on 9/30/16 closing price of $47.57.
2. 3Q’16 Adjusted EBITDA annualized.
($ Millions) Capital Structure
September 30, 2016
Debt Maturity Schedule
September 30, 2016
Lease Commencements
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 23
Total Backlog - Estimated Annualized GAAP Revenue(1) Commenced by
End of Period ($ Millions) (excl. estimates of pass-through power)
Note:
1. Annualized 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.
2. Colocation square feet (CSF) represents NRSF leased or available for lease as colocation space, where customers locate their servers and other IT equipment. Net rentable square
feet (NRSF) represent the total square feet of a building leased or available for lease based on engineers’ drawings and estimates but does not include space held for development or
space used by CyrusOne.
$0.8
$27.0
$18.1
$6.2
$1.9
3Q'16 4Q'16 1Q'17 2Q'17 and
Thereafter
Total
$-
$10
$20
$30
3Q’16 Leases - Estimated Annualized GAAP Revenue(1) Commenced by
End of Period ($ Millions) (excl. estimates of pass-through power) In 3Q’16, leased 17 MW and
105,000 CSF(2); weighted
average lease term of 63
months
Estimates on lease
commencements for future
quarters are based on
current estimated installation
timelines
Excluding estimates for
pass-through power
charges, leases signed
during 3Q’16 represent
approximately $27.0M of
annualized GAAP revenue(1)
Total annualized GAAP
revenue(1) backlog of
approximately $67.6M as of
the end of 3Q’16
$21.9
$67.6 $43.8 $1.9
4Q'16 1Q'17 2Q'17 and
Thereafter
Total
$-
$20
$40
$60
$80
$100
2016 Guidance
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 24
Category
($ Millions except for Normalized FFO)
Previous
2016
Guidance
Revised
2016
Guidance
Total Revenue $520 - 530 $523 - 530
Base Revenue $470 - 475 $472 - 476
Metered Power Reimbursements $50 - 55 $51 - 54
Adjusted EBITDA $270 - 280 $275 - 278
Normalized FFO per diluted common share or
common share equivalent
$2.50 - 2.58 $2.59 - 2.62
Capital Expenditures $635 - 655 $635 - 655
Development $630 - 646 $630 - 646
Recurring $5 - 9 $5 - 9
Appendix (Non-GAAP Reconciliations)
Net Operating Income
Revenue 86.9$ 85.7$ 89.1$ 111.2$ 113.3$ 117.8$ 130.1$ 143.8$
Property operating expenses 32.0 32.3 32.8 42.2 41.4 40.3 44.8 54.6
Net Operating Income (NOI) 54.9$ 53.4$ 56.3$ 69.0$ 71.9$ 77.5$ 85.3$ 89.2$
Add Back: Lease exit costs - 0.7 - 0.4 0.3 - - -
Adjusted Net Operating Income (Adjusted NOI) 54.9$ 54.1$ 56.3$ 69.4$ 72.2$ 77.5$ 85.3$ 89.2$
June 30, 2016 Sept. 30, 2016
Three Months Ended
Mar. 31, 2015 June 30, 2015 Sept. 30, 2015 Dec. 31, 2015 Mar. 31, 2016Dec. 31, 2014Non-GAAP Reconciliations
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 26
($ in Millions)
($ in Millions)
LQA
3Q 2016
Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA:
Net (loss) income 17.6$ 4.4$ (5.3)$
Interest expense 55.2 13.8 12.1
Income tax expense 2.4 0.6 0.7
Depreciation and amortization 202.4 50.6 39.1
EBITDA 277.6 69.4 46.6
Transa tion and acquisit on integration costs 4.8 1.2 1.8
Legal claim costs 0.8 0.2 -
Stock-based compensation 9.2 2.3 3.4
Severance and management transition costs - - 1.9
Lease exit costs - - 0.4
Asset impairments and loss on disposals - - 4.9
Adjusted EBITDA 292.4$ 73.1$ 59.0$
Three Months Ended
Sept. 30, 2016 Sept. 30, 2015
Non-GAAP Reconciliations
CyrusOne Third Quarter 2016 Earnings Presentation Built for Tomorrow. Ready Today. | 27
Sept. 30, 2016 Sept. 30, 2015
Reconciliation of Net (Loss) Income to FFO and Normalized FFO:
Net (loss) income 4.4$ (5.3)$
Real estate depreciation and amortization 44.2 31.9
Asset impairments and loss on disposal - 4.9
Funds from Operations (FFO) 48.6$ 31.5$
Amortization of customer relationship intangibles 4.8 5.6
Transaction and acquisition integration costs 1.2 1.9
Severance and management transition costs - 1.9
Legal claim costs 0.2 -
Lease exit costs - 0.3
Normalized Funds from Operations (Normalized FFO) 54.8$ 41.2$
Normalized FFO per diluted common share or common share equivalent 0.67$ 0.57$
Weighted average diluted common shares and common share equivalents o/s 81.3 72.6
CyrusOne Inc.
Reconciliation of Net (Loss) Income to FFO and Normalized FFO
(Dollars in millions)
(Unaudited)
Three Months Ended