REIT Earnings Press Releases

CyrusOne Reports Third Quarter 2021 Earnings

DALLAS--(BUSINESS WIRE)--Oct. 27, 2021-- CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT, today announced third quarter 2021 earnings.

Highlights

Category

3Q’21

vs. 3Q’20

Revenue

$304.1 million

16%

Net income

$6.7 million

n/m

Adjusted EBITDA

$149.2 million

13%

Normalized FFO

$127.2 million

11%

Net income per diluted common share

$0.05

n/m

Normalized FFO per diluted common share

$1.02

6%

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

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

Third Quarter 2021 Financial Results

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

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

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

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

Leasing Activity

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

Portfolio Development and Percentage CSF Leased

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

Balance Sheet and Liquidity

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

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

Dividend

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

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

Guidance

CyrusOne is updating its guidance for full year 2021, increasing the lower and upper ends of its guidance ranges for Total Revenue and Normalized FFO per diluted common share, increasing the lower end of its guidance range for Adjusted EBITDA, and narrowing the guidance range for Capital Expenditures. The annual guidance provided below represents forward-looking statements, which are based on current economic conditions, internal assumptions about the Company’s existing customer base, and the supply and demand dynamics of the markets in which CyrusOne operates. We continue to monitor the global outbreak of COVID-19 and to take steps to mitigate the potential risks to us posed by the pandemic. While the impact on our business has not been significant to date, the length and severity of the effects of the pandemic remain uncertain and unpredictable and could be materially adverse to our business, financial condition, results of operations, cash flows and ability to pay dividends as well as the market price of our common stock.

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

Category

Previous 2021 Guidance

Revised 2021 Guidance

Total Revenue

$1,155 - 1,185 million

$1,180 - 1,200 million

Lease and Other Revenues from Customers

$930 - 950 million

$940 - 950 million

Metered Power Reimbursements

$225 - 235 million

$240 - 250 million

Adjusted EBITDA

$575 - 590 million

$585 - 590 million

Normalized FFO per diluted common share

$3.95 - 4.05

$4.03 - 4.08

Capital Expenditures

$875 - 975 million

$900 - 950 million

Development(1)

$855 - 935 million

$875 - 915 million

Recurring

$20 - 40 million

$25 - 35 million

 

 

 

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

Upcoming Conferences and Events (All Virtual)

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

Conference Call Details

CyrusOne will host a conference call on October 28, 2021, at 11:00 AM Eastern Time (10:00 AM Central Time) to discuss its results for the third quarter 2021. A live webcast of the conference call will be available in the “Investors / Events & Presentations” section of the Company’s website at http://investor.cyrusone.com/events.cfm. The presentation to be made during the call is now available in this location. The U.S. conference call dial-in number is 1-844-492-3731, and the international dial-in number is 1-412-542-4121. A replay will be available one hour after the conclusion of the earnings call on October 28, 2021, through November 11, 2021. The U.S. toll-free replay dial-in number is 1-877-344-7529 and the international replay dial-in number is 1-412-317-0088. The replay access code is 10160637.

Safe Harbor

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

Use of Non-GAAP Financial Measures and Other Metrics

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

About CyrusOne

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

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

Company Profile

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

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

Corporate Headquarters

Senior Management

2850 N. Harwood St., Ste. 2200

David Ferdman, Interim President & CEO

Brent Behrman, EVP of Sales

Dallas, Texas 75201

Katherine Motlagh, EVP & Chief Financial Officer

Matt Pullen, EVP & Managing Director, Europe

Phone: (972) 350-0060

John Hatem, EVP & Chief Operating Officer

Robert M. Jackson, EVP General Counsel & Secretary

Website: www.cyrusone.com

 

 

Analyst Coverage

Firm

Analyst

Phone Number

BofA Securities

Michael J. Funk

(646) 855-5664

Barclays

Brendan Lynch

(212) 526 9428

Berenberg Capital Markets

Nate Crossett

(646) 949-9030

BMO Capital Markets

Ari Klein

(212) 885-4103

Citi

Mike Rollins

(212) 816-1116

Cowen and Company

Colby Synesael

(646) 562-1355

Credit Suisse

Sami Badri

(212) 538-1727

Deutsche Bank

Matthew Niknam

(212) 250-4711

Evercore ISI

Irvin Liu

(415) 800-0183

Green Street

David Guarino

(949) 640-8780

Jefferies

Jonathan Petersen

(212) 284-1705

J.P. Morgan

Richard Choe

(212) 622-6708

KeyBanc Capital Markets

Jordan Sadler

(917) 368-2280

MoffettNathanson

Nick Del Deo, CFA

(212) 519-0025

Morgan Stanley

Simon Flannery

(212) 761-6432

RBC Capital Markets

Jonathan Atkin

(415) 633-8589

Raymond James

Frank G. Louthan IV

(404) 442-5867

Stifel

Erik Rasmussen

(212) 271-3461

TD Securities Inc.

Jonathan Kelcher, CFA

(416) 307-9931

Truist

Greg Miller

(212) 303-4169

UBS

John C. Hodulik, CFA

(212) 713-4226

Wells Fargo

Eric Luebchow

(312) 630-2386

William Blair

Jim Breen, CFA

(617) 235-7513

Wolfe Research

Andrew Rosivach, CFA

(646) 582-9250

 

CyrusOne Inc.

Summary of Financial Data

(Dollars in millions, except per share amounts)

 

 

Three Months

 

 

September 30,

June 30,

September 30,

Growth %

 

2021

2021

2020

Yr/Yr

Revenue

$

304.1

 

$

284.6

 

$

262.8

 

16

%

Net operating income

170.7

 

162.8

 

153.1

 

11

%

Net income (loss)

6.7

 

7.4

 

(37.3

)

n/m

 

Funds from Operations ("FFO") - Nareit defined

132.3

 

129.0

 

82.2

 

61

%

Normalized Funds from Operations ("Normalized FFO")

127.2

 

123.1

 

114.4

 

11

%

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

124.3

 

122.7

 

119.2

 

4

%

Net income (loss) per share - basic

$

0.05

 

$

0.06

 

$

(0.32

)

n/m

 

Net income (loss) per share - diluted

$

0.05

 

$

0.06

 

$

(0.32

)

n/m

 

Normalized FFO per diluted common share

$

1.02

 

$

1.00

 

$

0.96

 

6

%

Adjusted EBITDA

$

149.2

 

$

141.9

 

$

132.2

 

13

%

Adjusted EBITDA as a % of Revenue

49.1

%

49.9

%

50.3

%

(1.2) pts

 

As of

 

 

September 30,

June 30,

September 30,

Growth %

 

2021

2021

2020

Yr/Yr

Balance Sheet Data

 

 

 

 

Gross investment in real estate

$

7,635.4

 

$

7,518.8

 

$

6,791.6

 

12

%

Accumulated depreciation

(2,080.4

)

(1,977.8

)

(1,663.4

)

25

%

Total investment in real estate, net

5,555.0

 

5,541.0

 

5,128.2

 

8

%

Cash and cash equivalents

456.4

 

369.7

 

156.5

 

n/m

 

Market value of common equity

9,824.4

 

8,869.3

 

8,433.2

 

16

%

Long-term debt

3,559.0

 

3,587.8

 

3,236.3

 

10

%

Net debt

3,259.8

 

3,380.9

 

3,109.0

 

5

%

Total enterprise value

13,084.2

 

12,250.2

 

11,542.2

 

13

%

Net debt to LQA Adjusted EBITDA(a)

5.0x

5.0x

5.1x

(0.1)x

 

 

 

 

 

Dividend Activity

 

 

 

 

Dividends per share

$

0.52

 

$

0.51

 

$

0.51

 

2

%

 

 

 

 

 

Portfolio Statistics

 

 

 

 

Data centers

56

 

54

 

51

 

10

%

Stabilized CSF (000)

4,789

 

4,611

 

4,134

 

16

%

Stabilized CSF % leased

86

%

86

%

87

%

(1) pts

Total CSF (000)

5,050

 

4,889

 

4,471

 

13

%

Total CSF % leased

84

%

83

%

84

%

— pts

Total GSF (000)

8,601

 

8,346

 

7,710

 

12

%

(a)

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

 

CyrusOne Inc.

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share amounts)

(Unaudited)

  

 

Three Months

 

 

 

Nine Months

 

 

 

Ended September 30,

Change

 

Ended September 30,

Change

 

2021

2020

$

%

 

2021

2020

$

%

Revenue(a)

$

304.1

 

$

262.8

 

$

41.3

 

16

%

 

$

887.3

 

$

765.1

 

$

122.2

 

16

%

Operating expenses:

 

 

 

 

 

 

 

 

 

Property operating expenses

133.4

 

109.7

 

23.7

 

22

%

 

391.0

 

301.3

 

89.7

 

30

%

Sales and marketing

3.6

 

4.5

 

(0.9

)

(20

)%

 

11.1

 

13.0

 

(1.9

)

(15

)%

General and administrative

30.8

 

29.7

 

1.1

 

4

%

 

70.4

 

76.9

 

(6.5

)

(8

)%

Depreciation and amortization

127.5

 

113.1

 

14.4

 

13

%

 

372.6

 

330.9

 

41.7

 

13

%

Transaction, acquisition, integration and other related expenses

0.2

 

1.6

 

(1.4

)

(88

)%

 

0.4

 

2.2

 

(1.8

)

(82

)%

Impairment losses and loss on asset disposals

0.1

 

8.8

 

(8.7

)

(99

)%

 

0.7

 

11.1

 

(10.4

)

(94

)%

Total operating expenses

295.6

 

267.4

 

267.4

 

11

%

 

846.2

 

735.4

 

110.8

 

15

%

Operating income (loss)

8.5

 

(4.6

)

(226.1

)

n/m

 

 

41.1

 

29.7

 

11.4

 

38

%

Interest expense, net

(17.3

)

(13.3

)

(4.0

)

30

%

 

(47.2

)

(43.2

)

(4.0

)

9

%

Gain on marketable equity investment

 

4.7

 

(4.7

)

(100

)%

 

2.4

 

69.8

 

(67.4

)

(97

)%

Loss on early extinguishment of debt

 

(3.1

)

3.1

 

(100

)%

 

 

(6.5

)

6.5

 

(100

)%

Foreign currency and derivative gains (losses), net

14.4

 

(22.9

)

37.3

 

n/m

 

 

31.2

 

(31.7

)

62.9

 

n/m

 

Other expense (income)

0.1

 

 

0.1

 

n/m

 

 

(0.1

)

 

(0.1

)

n/m

 

Net income (loss) before income taxes

5.7

 

(39.2

)

(194.3

)

n/m

 

 

27.4

 

18.1

 

9.3

 

51

%

Income tax benefit

1.0

 

1.9

 

(0.9

)

(47

)%

 

4.9

 

4.3

 

0.6

 

14

%

Net income (loss)

$

6.7

 

$

(37.3

)

$

44.0

 

n/m

 

 

$

32.3

 

$

22.4

 

$

9.9

 

44

%

Net income (loss) per share - basic

$

0.05

 

$

(0.32

)

$

0.37

 

n/m

 

 

$

0.26

 

$

0.19

 

$

0.07

 

37

%

Net income (loss) per share - diluted

$

0.05

 

$

(0.32

)

$

0.37

 

n/m

 

 

$

0.26

 

$

0.19

 

$

0.07

 

37

%

(a)

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

 

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

 

 

September 30,

December 31,

Change

 

2021

2020

$

%

Assets

 

 

 

 

Investment in real estate:

 

 

 

 

Land

$

211.6

 

$

208.8

 

$

2.8

 

1

%

Buildings and improvements

2,336.3

 

2,035.2

 

301.1

 

15

%

Equipment

4,064.7

 

3,538.9

 

525.8

 

15

%

Gross operating real estate

6,612.6

 

5,782.9

 

829.7

 

14

%

Less accumulated depreciation

(2,080.4

)

(1,767.9

)

(312.5

)

18

%

Net operating real estate

4,532.2

 

4,015.0

 

517.2

 

13

%

Construction in progress, including land under development

729.8

 

982.2

 

(252.4

)

(26

)%

Land held for future development

293.0

 

268.3

 

24.7

 

9

%

Total investment in real estate, net

5,555.0

 

5,265.5

 

289.5

 

5

%

Cash and cash equivalents

456.4

 

271.4

 

185.0

 

68

%

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

409.2

 

334.2

 

75.0

 

22

%

Restricted cash

24.3

 

1.5

 

22.8

 

n/m

 

Operating lease right-of-use assets, net

148.5

 

211.4

 

(62.9

)

(30

)%

Equity investments

30.3

 

67.1

 

(36.8

)

(55

)%

Goodwill

455.1

 

455.1

 

 

%

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

132.7

 

157.8

 

(25.1

)

(16

)%

Other assets

128.0

 

133.4

 

(5.4

)

(4

)%

Total assets

$

7,339.5

 

$

6,897.4

 

$

442.1

 

6

%

Liabilities and equity

 

 

 

 

Debt

$

3,515.1

 

$

3,409.0

 

$

106.1

 

3

%

Finance lease liabilities

157.2

 

29.1

 

128.1

 

n/m

 

Operating lease liabilities

183.9

 

249.1

 

(65.2

)

(26

)%

Construction costs payable

104.6

 

133.0

 

(28.4

)

(21

)%

Accounts payable and accrued expenses

192.1

 

151.3

 

40.8

 

27

%

Dividends payable

66.3

 

63.3

 

3.0

 

5

%

Deferred revenue and prepaid rents

227.9

 

174.1

 

53.8

 

31

%

Deferred tax liability

41.9

 

53.0

 

(11.1

)

(21

)%

Other liabilities

45.0

 

77.3

 

(32.3

)

(42

)%

Total liabilities

4,534.0

 

4,339.2

 

194.8

 

4

%

Commitments and contingencies

 

 

 

 

Stockholders’ equity

 

 

 

 

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

 

 

 

n/m

 

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

1.3

 

1.2

 

0.1

 

8

%

Additional paid in capital

3,952.7

 

3,537.3

 

415.4

 

12

%

Accumulated deficit

(1,125.3

)

(966.6

)

(158.7

)

16

%

Accumulated other comprehensive loss

(23.2

)

(13.7

)

(9.5

)

69

%

Total stockholders’ equity

2,805.5

 

2,558.2

 

247.3

 

10

%

Total liabilities and equity

$

7,339.5

 

$

6,897.4

 

$

442.1

 

6

%

 

CyrusOne Inc.

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share amounts)

(Unaudited)

 

For the three months ended:

September 30,

June 30,

March 31,

December 31,

September 30,

 

2021

2021

2021

2020

2020

Revenue(a)

$

304.1

 

$

284.6

 

$

298.6

 

$

268.4

 

$

262.8

 

Operating expenses:

 

 

 

 

 

Property operating expenses

133.4

 

121.8

 

135.8

 

110.3

 

109.7

 

Sales and marketing

3.6

 

3.7

 

3.8

 

5.3

 

4.5

 

General and administrative

30.8

 

16.6

 

23.0

 

22.4

 

29.7

 

Depreciation and amortization

127.5

 

123.7

 

121.4

 

118.5

 

113.1

 

Transaction, acquisition, integration and other related expenses

0.2

 

0.1

 

0.1

 

1.5

 

1.6

 

Impairment losses and loss on asset disposals

0.1

 

0.1

 

0.5

 

 

8.8

 

Total operating expenses

295.6

 

266.0

 

284.6

 

258.0

 

267.4

 

Operating income (loss)

8.5

 

18.6

 

14.0

 

10.4

 

(4.6

)

Interest expense, net

(17.3

)

(14.8

)

(15.1

)

(14.5

)

(13.3

)

Gain on marketable equity investment

 

 

2.4

 

19.7

 

4.7

 

Loss on early extinguishment of debt

 

 

 

 

(3.1

)

Foreign currency and derivative gains (losses), net

14.4

 

1.4

 

15.4

 

4.1

 

(22.9

)

Other expense (income)

0.1

 

(0.1

)

(0.1

)

 

 

Net income (loss) before income taxes

5.7

 

5.1

 

16.6

 

19.7

 

(39.2

)

Income tax benefit (expense)

1.0

 

2.3

 

1.6

 

(0.7

)

1.9

 

Net income (loss)

$

6.7

 

$

7.4

 

$

18.2

 

$

19.0

 

$

(37.3

)

Net income (loss) per share - basic

$

0.05

 

$

0.06

 

$

0.15

 

$

0.15

 

$

(0.32

)

Net income (loss) per share - diluted

$

0.05

 

$

0.06

 

$

0.15

 

$

0.15

 

$

(0.32

)

(a)

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

 

CyrusOne Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

(Unaudited)

 

 

September 30,

June 30,

March 31,

December 31,

September 30,

 

2021

2021

2021

2020

2020

Assets

 

 

 

 

 

Investment in real estate:

 

 

 

 

 

Land

$

211.6

 

$

212.8

 

$

207.3

 

$

208.8

 

$

181.2

 

Buildings and improvements

2,336.3

 

2,253.8

 

2,046.6

 

2,035.2

 

1,918.4

 

Equipment

4,064.7

 

3,869.0

 

3,596.5

 

3,538.9

 

3,341.7

 

Gross operating real estate

6,612.6

 

6,335.6

 

5,850.4

 

5,782.9

 

5,441.3

 

Less accumulated depreciation

(2,080.4

)

(1,977.8

)

(1,867.5

)

(1,767.9

)

(1,663.4

)

Net operating real estate

4,532.2

 

4,357.8

 

3,982.9

 

4,015.0

 

3,777.9

 

Construction in progress, including land under development

729.8

 

917.3

 

1,053.3

 

982.2

 

1,085.9

 

Land held for future development

293.0

 

265.9

 

262.3

 

268.3

 

264.4

 

Total investment in real estate, net

5,555.0

 

5,541.0

 

5,298.5

 

5,265.5

 

5,128.2

 

Cash and cash equivalents

456.4

 

369.7

 

240.9

 

271.4

 

156.5

 

Rent and other receivables, net

409.2

 

409.4

 

389.8

 

334.2

 

306.9

 

Restricted cash

24.3

 

24.8

 

1.4

 

1.5

 

1.4

 

Operating lease right-of-use assets, net

148.5

 

155.0

 

239.7

 

211.4

 

206.9

 

Equity investments

30.3

 

30.0

 

22.9

 

67.1

 

178.1

 

Goodwill

455.1

 

455.1

 

455.1

 

455.1

 

455.1

 

Intangible assets, net

132.7

 

141.2

 

149.2

 

157.8

 

166.4

 

Other assets

128.0

 

115.0

 

114.3

 

133.4

 

112.8

 

Total assets

$

7,339.5

 

$

7,241.2

 

$

6,911.8

 

$

6,897.4

 

$

6,712.3

 

Liabilities and equity

 

 

 

 

 

Debt

$

3,515.1

 

$

3,541.6

 

$

3,337.4

 

$

3,409.0

 

$

3,197.8

 

Finance lease liabilities

157.2

 

162.8

 

28.6

 

29.1

 

29.2

 

Operating lease liabilities

183.9

 

190.5

 

277.9

 

249.1

 

244.3

 

Construction costs payable

104.6

 

157.7

 

137.5

 

133.0

 

168.2

 

Accounts payable and accrued expenses

192.1

 

147.7

 

168.9

 

151.3

 

145.3

 

Dividends payable

66.3

 

63.6

 

62.0

 

63.3

 

63.1

 

Deferred revenue and prepaid rents

227.9

 

217.1

 

183.2

 

174.1

 

166.8

 

Deferred tax liability

41.9

 

45.3

 

48.2

 

53.0

 

55.4

 

Other liabilities

45.0

 

58.3

 

53.3

 

77.3

 

37.8

 

Total liabilities

4,534.0

 

4,584.6

 

4,297.0

 

4,339.2

 

4,107.9

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

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

 

 

 

 

 

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

1.3

 

1.2

 

1.2

 

1.2

 

1.2

 

Additional paid in capital

3,952.7

 

3,731.3

 

3,628.6

 

3,537.3

 

3,532.9

 

Accumulated deficit

(1,125.3

)

(1,066.1

)

(1,010.2

)

(966.6

)

(923.9

)

Accumulated other comprehensive loss

(23.2

)

(9.8

)

(4.8

)

(13.7

)

(5.8

)

Total stockholders’ equity

2,805.5

 

2,656.6

 

2,614.8

 

2,558.2

 

2,604.4

 

Total liabilities and equity

$

7,339.5

 

$

7,241.2

 

$

6,911.8

 

$

6,897.4

 

$

6,712.3

 

 

CyrusOne Inc.

Condensed Consolidated Statements of Cash Flows

(Dollars in millions)

(Unaudited)

 

 

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020

Cash flows from operating activities:

 

 

 

 

Net income (loss)

$

32.3

 

$

22.4

 

$

6.7

 

$

(37.3

)

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

 

 

 

 

Depreciation and amortization

372.6

 

330.9

 

127.5

 

113.1

 

Provision for bad debt expense

(1.0

)

0.3

 

(0.1

)

0.3

 

Gain on marketable equity investment

(2.4

)

(69.8

)

 

(4.7

)

Foreign currency and derivative (gains) losses, net

(31.2

)

31.7

 

(14.4

)

22.9

 

Proceeds from swap terminations

 

2.9

 

 

 

Impairment losses and loss on asset disposals

0.7

 

11.1

 

0.1

 

8.9

 

Loss on early extinguishment of debt

 

6.5

 

 

3.1

 

Interest expense amortization, net

5.7

 

5.2

 

2.2

 

1.6

 

Stock-based compensation expense

17.2

 

13.7

 

8.5

 

6.7

 

Deferred income tax benefit

(8.0

)

(7.1

)

(2.0

)

(2.9

)

Operating lease cost

15.3

 

15.0

 

5.0

 

2.0

 

Other (expense) income

(0.2

)

0.6

 

(0.1

)

0.1

 

 

 

 

 

 

Change in operating assets and liabilities:

 

 

 

 

Rent and other receivables, net and other assets

(90.6

)

(29.1

)

(22.1

)

1.9

 

Accounts payable and accrued expenses

42.9

 

22.0

 

46.2

 

17.3

 

Deferred revenue and prepaid rents

54.3

 

2.3

 

11.8

 

0.3

 

Operating lease liabilities

(18.2

)

(16.7

)

(6.0

)

(5.6

)

Net cash provided by operating activities

389.4

 

341.9

 

163.3

 

127.7

 

Cash flows from investing activities:

 

 

 

 

Investments in real estate

(580.2

)

(692.2

)

(218.5

)

(234.2

)

Proceeds from sale of equity investments

46.6

 

31.8

 

 

23.6

 

Equity investments

(7.4

)

(6.5

)

(0.3

)

(1.8

)

Proceeds from the sale of real estate assets

4.4

 

0.3

 

 

 

Net cash used in investing activities

(536.6

)

(666.6

)

(218.8

)

(212.4

)

Cash flows from financing activities:

 

 

 

 

Issuance of common stock, net

407.9

 

325.9

 

213.7

 

222.6

 

Dividends paid

(187.9

)

(174.7

)

(63.2

)

(58.6

)

Proceeds from revolving credit facility

173.4

 

595.5

 

 

156.7

 

Repayments of revolving credit facility

(610.5

)

(966.7

)

 

(243.6

)

Proceeds from Euro bond

603.1

 

561.2

 

 

11.0

 

Proceeds from unsecured term loan

 

1,100.0

 

 

 

Repayments of unsecured term loan

 

(1,400.0

)

 

(300.0

)

Proceeds from issuance of senior notes

 

395.2

 

 

395.2

 

Payment of deferred financing costs

(5.0

)

(15.1

)

 

(2.6

)

Payments on finance lease liabilities

(3.5

)

(2.0

)

(1.3

)

(0.7

)

Tax payment upon exercise of equity awards

(9.6

)

(8.6

)

(0.7

)

(2.2

)

Net cash provided by financing activities

367.9

 

410.7

 

148.5

 

177.8

 

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

(12.9

)

(5.8

)

(6.8

)

(7.2

)

Net increase in cash, cash equivalents and restricted cash

207.8

 

80.2

 

86.2

 

85.9

 

Cash, cash equivalents and restricted cash at beginning of period

272.9

 

77.7

 

394.5

 

72.0

 

Cash, cash equivalents and restricted cash at end of period

$

480.7

 

$

157.9

 

$

480.7

 

$

157.9

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

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

$

45.8

 

$

36.3

 

$

3.6

 

$

6.3

 

Cash paid for income taxes

4.0

 

3.2

 

0.8

 

3.1

 

Non-cash investing and financing activities:

 

 

 

 

Construction costs payable

104.6

 

168.2

 

104.6

 

168.2

 

Dividends payable

66.3

 

63.1

 

66.3

 

63.1

 

 

CyrusOne Inc.

Reconciliation of Net income (loss) to Net Operating Income

(Dollars in millions)

(Unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

Change

September 30,

Change

2021

2020

$

%

2021

2020

$

%

Net income (loss)

$

6.7

 

$

(37.3

)

$

44.0

 

n/m

 

$

32.3

 

$

22.4

 

$

9.9

 

44

%

Sales and marketing expenses

3.6

 

4.5

 

(0.9

)

(20

)%

11.1

 

13.0

 

(1.9

)

(15

)%

General and administrative expenses

30.8

 

29.7

 

1.1

 

4

%

70.4

 

76.9

 

(6.5

)

(8

)%

Depreciation and amortization expenses

127.5

 

113.1

 

14.4

 

13

%

372.6

 

330.9

 

41.7

 

13

%

Transaction, acquisition, integration and other related expenses

0.2

 

1.6

 

(1.4

)

(88

)%

0.4

 

2.2

 

(1.8

)

(82

)%

Interest expense, net

17.3

 

13.3

 

4.0

 

30

%

47.2

 

43.2

 

4.0

 

9

%

Gain on marketable equity investment

 

(4.7

)

4.7

 

(100

)%

(2.4

)

(69.8

)

67.4

 

(97

)%

Loss on early extinguishment of debt

 

3.1

 

(3.1

)

(100

)%

 

6.5

 

(6.5

)

(100

)%

Impairment losses and loss on asset disposals

0.1

 

8.8

 

(8.7

)

(99

)%

0.7

 

11.1

 

(10.4

)

(94

)%

Foreign currency and derivative (gains) losses, net

(14.4

)

22.9

 

(37.3

)

n/m

 

(31.2

)

31.7

 

(62.9

)

n/m

 

Other (expense) income

(0.1

)

 

(0.1

)

n/m

 

0.1

 

 

0.1

 

n/m

 

Income tax benefit

(1.0

)

(1.9

)

0.9

 

(47

)%

(4.9

)

(4.3

)

(0.6

)

14

%

Net Operating Income

$

170.7

 

$

153.1

 

$

17.6

 

11

%

$

496.3

 

$

463.8

 

$

32.5

 

7

%

 

CyrusOne Inc.

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

(Dollars in millions)

(Unaudited)

 

 

Nine Months Ended

 

 

Three Months Ended

 

September 30,

Change

September 30,

June 30,

March 31,

December 31,

September 30,

 

2021

2020

$

%

2021

2021

2021

2020

2020

Net Operating Income

 

 

 

 

 

 

 

 

 

Revenue

$

887.3

 

$

765.1

 

$

122.2

 

16

%

$

304.1

 

$

284.6

 

$

298.6

 

$

268.4

 

$

262.8

 

Property operating expenses

391.0

 

301.3

 

89.7

 

30

%

133.4

 

121.8

 

135.8

 

110.3

 

109.7

 

Net Operating Income (NOI)

$

496.3

 

$

463.8

 

$

32.5

 

7

%

$

170.7

 

$

162.8

 

$

162.8

 

$

158.1

 

$

153.1

 

NOI as a % of Revenue

55.9

%

60.6

%

 

 

56.1

%

57.2

%

54.5

%

58.9

%

58.3

%

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Net income (loss)

$

32.3

 

$

22.4

 

$

9.9

 

44

%

$

6.7

 

$

7.4

 

$

18.2

 

$

19.0

 

$

(37.3

)

Interest expense, net

47.2

 

43.2

 

4.0

 

9

%

17.3

 

14.8

 

15.1

 

14.5

 

13.3

 

Income tax (benefit) expense

(4.9

)

(4.3

)

(0.6

)

14

%

(1.0

)

(2.3

)

(1.6

)

0.7

 

(1.9

)

Depreciation and amortization expenses

372.6

 

330.9

 

41.7

 

13

%

127.5

 

123.7

 

121.4

 

118.5

 

113.1

 

Impairment losses and loss on asset disposals

0.7

 

11.1

 

(10.4

)

(94

)%

0.1

 

0.1

 

0.5

 

 

8.8

 

EBITDA (Nareit definition)(a)

$

447.9

 

$

403.3

 

$

44.6

 

11

%

$

150.6

 

$

143.7

 

$

153.6

 

$

152.7

 

$

96.0

 

 

 

 

 

 

 

 

 

 

 

Transaction, acquisition, integration and other related expenses

0.4

 

2.2

 

(1.8

)

(82

)%

0.2

 

0.1

 

0.1

 

1.5

 

1.6

 

Legal claim costs

(4.9

)

0.3

 

(5.2

)

n/m

 

 

(4.9

)

 

 

0.1

 

Stock-based compensation expense

12.7

 

11.1

 

1.6

 

14

%

4.0

 

4.3

 

4.4

 

4.4

 

4.2

 

Cash severance and management transition costs

4.3

 

13.2

 

(8.9

)

(67

)%

4.4

 

 

(0.1

)

0.9

 

6.4

 

Severance-related stock compensation costs

4.5

 

2.7

 

1.8

 

67

%

4.5

 

 

 

0.2

 

2.6

 

Loss on early extinguishment of debt

 

6.5

 

(6.5

)

(100

)%

 

 

 

 

3.1

 

Gain on marketable equity investment

(2.4

)

(69.8

)

67.4

 

(97

)%

 

 

(2.4

)

(19.7

)

(4.7

)

Foreign currency and derivative (gains) losses, net

(31.2

)

31.7

 

(62.9

)

n/m

 

(14.4

)

(1.4

)

(15.4

)

(4.1

)

22.9

 

Other expense (income)

0.1

 

 

0.1

 

n/m

 

(0.1

)

0.1

 

0.1

 

 

 

Adjusted EBITDA

$

431.4

 

$

401.2

 

$

30.2

 

8

%

$

149.2

 

$

141.9

 

$

140.3

 

$

135.9

 

$

132.2

 

Adjusted EBITDA as a % of Revenue

48.6

%

52.4

%

 

 

49.1

%

49.9

%

47.0

%

50.6

%

50.3

%

(a)

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

 

CyrusOne Inc.

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

(Dollars in millions)

(Unaudited)

 

 

Nine Months Ended

 

 

Three Months Ended

 

September 30,

Change

September 30,

June 30,

March 31,

December 31,

September 30,

2021

2020

$

%

2021

2021

2021

2020

2020

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

 

 

 

 

 

 

 

 

 

Net income (loss)

$

32.3

 

$

22.4

 

$

9.9

 

44

%

$

6.7

 

$

7.4

 

$

18.2

 

$

19.0

 

$

(37.3

)

Real estate depreciation and amortization

366.0

 

324.0

 

42.0

 

13

%

125.5

 

121.5

 

119.0

 

116.1

 

110.7

 

Impairment losses and loss on asset disposals

0.7

 

11.1

 

(10.4

)

(94

)%

0.1

 

0.1

 

0.5

 

 

8.8

 

Funds from Operations ("FFO") - Nareit defined

$

399.0

 

$

357.5

 

$

41.5

 

12

%

$

132.3

 

$

129.0

 

$

137.7

 

$

135.1

 

$

82.2

 

 

 

 

 

 

 

 

 

 

 

Loss on early extinguishment of debt

 

6.5

 

(6.5

)

(100

)%

 

 

 

 

3.1

 

Gain on marketable equity investment

(2.4

)

(69.8

)

67.4

 

(97

)%

 

 

(2.4

)

(19.7

)

(4.7

)

Foreign currency and derivative (gains) losses, net

(31.2

)

31.7

 

(62.9

)

n/m

 

(14.4

)

(1.4

)

(15.4

)

(4.1

)

22.9

 

Amortization of tradenames

0.8

 

0.8

 

 

%

0.2

 

0.3

 

0.3

 

0.4

 

0.2

 

Transaction, acquisition, integration and other related expenses

0.4

 

2.2

 

(1.8

)

(82

)%

0.2

 

0.1

 

0.1

 

1.5

 

1.6

 

Cash severance and management tran