CyrusOne Reports Fourth Quarter and Full Year 2021 Earnings|||

Signed $104.3 Meg in Annualized GAAP Acquirement and 101 Megawatts in 4Q’21

DALLAS–(Business organisation WIRE)–CyrusOne Inc. (NASDAQ: CONE), a premier global data center REIT, today announced quaternary quarter and full yr 2021 earnings.

Highlights


Category


4Q’21


vs. 4Q’20


FY’21


vs. FY’xx

Revenue

$318.4 meg

xix%

$1,205.7 million

17%

Net (loss) income

$(seven.0) million

due north/m

$25.3 million

(39)%

Adapted EBITDA

$148.4 one thousand thousand

9%

$579.8 meg

eight%

Normalized FFO

$123.9 million

eight%

$494.4 1000000

8%

Net (loss) income per diluted common share

$(0.06)

north/thousand

$0.20

(43)%

Normalized FFO per diluted mutual share

$0.97

three%

$3.99

two%

  • Leased 101 megawatts (“MW”) and 530,000 colocation square feet (“CSF”) in the fourth quarter, totaling $104.3 million in annualized GAAP acquirement, all quarterly company records
  • Backlog of approximately $177 one thousand thousand in annualized GAAP revenue every bit of the end of the fourth quarter
  • Settled forward sale agreements in the quaternary quarter that were entered into in 2020 and 2021, resulting in net proceeds of approximately $190 million, which were used for general corporate purposes

    • The Visitor has approximately $113 million in remaining bachelor forrad equity
  • On November 15, 2021, the Company, KKR and Global Infrastructure Partners (“GIP”) announced a definitive understanding pursuant to which KKR and GIP will acquire all outstanding shares of common stock of CyrusOne (the “Merger”)

    • CyrusOne stockholders approved the Merger on February 1, 2022
  • Every bit previously announced, subsequent to the end of the quarter CyrusOne entered into a definitive agreement with DataBank Holdings Ltd. for the sale of the Company’s 4 Houston information center assets

    • Total consideration for the transaction will be approximately $670 million, subject to a internet working uppercase adjustment, with proceeds from the sale expected to fund hereafter evolution projects
    • The third quarter 2021 annualized run-charge per unit cash NOI represented past these properties, including the future first-year lease payments that will exist made past CyrusOne, aggregate $34.8 one thousand thousand, implying a transaction cap rate of 5.19%

“We closed out 2021 with the strongest leasing quarter in the history of the visitor, with demand driven primarily past hyperscale customers beyond our U.Due south. markets, and we are well positioned for connected growth with a company-record quarter-end backlog totaling more $175 one thousand thousand in annualized revenue,” said David Ferdman, interim president and chief executive officer of CyrusOne. “Nosotros are also excited to execute on our capital recycling initiative, further optimizing our portfolio as nosotros redeploy capital into accretive developments across cadre markets with diverse hyperscale and enterprise demand in the U.S. and Europe.”

Fourth Quarter 2021 Financial Results

Revenue was $318.4 million for the fourth quarter, compared to $268.iv million for the same period in 2020, an increase of 19%. The increase in acquirement was driven primarily by a ten% increment in occupied CSF and college metered power reimbursements.

Net loss was $(seven.0) million for the quaternary quarter, compared to Net income of $xix.0 million in the same menstruation in 2020. Cyberspace loss for the 4th quarter included $20.9 million in Transaction, acquisition, integration and other related expenses associated with the pending Merger. Additionally, General and authoritative expenses for the fourth quarter of 2021 included $5.eight 1000000 related to losses in Frankfurt, London, and Paris for settlements with subcontractors associated with the insolvency of a general contractor. These impacts were partially get-go past a $12.4 million gain associated with a change in fair value on the undesignated portion of the Company’s internet investment hedge (compared to a $4.one 1000000 gain in the fourth quarter of 2020) likewise every bit a $iii.2 million gain related to the sale of certain Texas fiber connectivity avails. Additionally, in the fourth quarter of 2020, the Company recognized a $nineteen.7 one thousand thousand gain on the Company’s equity investment in GDS Holdings Limited. Net loss per diluted mutual share1
was $(0.06) in the fourth quarter of 2021, compared to Net income per diluted common share of $0.15 in the same period in 2020.

Cyberspace operating income (“NOI”)2
was $178.3 1000000 for the quaternary quarter, compared to $158.one million in the same period in 2020, an increase of 13%. Adapted EBITDAthree
was $148.4 million for the fourth quarter, compared to $135.9 million in the same period in 2020, an increase of ix%.

Normalized Funds From Operations (“Normalized FFO”)4
was $123.9 million for the fourth quarter, compared to $114.3 million in the same period in 2020, an increase of 8%. Normalized FFO per diluted common share was $0.97 in the quaternary quarter of 2021, compared to $0.94 in the same period in 2020, an increase of three%.

Leasing Activity

CyrusOne leased approximately 101 MW of ability and 530,000 CSF in the fourth quarter, representing approximately $8.7 one thousand thousand in monthly recurring rent, inclusive of the monthly affect of installation charges. The leasing for the quarter represents approximately $104.3 million in annualized GAAP revenuefive, excluding estimates for pass-through power. The weighted boilerplate lease term of the new leases, based on foursquare footage, is 83 months (half dozen.9 years), and the weighted boilerplate remaining lease term of CyrusOne’s portfolio is 52 months (taking into consideration the impact of the backlog). Recurring hire churn percent6
for the fourth quarter was 0.3%, compared to 0.nine% for the same menstruum in 2020.

Per centum CSF Leased

In the fourth quarter, the Company completed construction on 48,000 CSF and 9 MW of power capacity across Northern Virginia and London. Percentage CSF leased7
as of the end of the quaternary quarter was 86% for stabilized backdropviii
and 83% overall.

Residue Sheet and Liquidity

Equally of Dec 31, 2021, the Company had gross nugget value9
totaling approximately $ix.6 billion, an increase of approximately xi% over gross nugget value as of Dec 31, 2020. CyrusOne had $three.53 billion of long-term debtten, $346 meg of greenbacks and cash equivalents, and approximately $1.39 billion available under its unsecured revolving credit facility as of Dec 31, 2021. Net debtx
was $3.34 billion as of December 31, 2021, representing approximately 22% of the Visitor’southward total enterprise value as of Dec 31, 2021 of $15.0 billion. This represented approximately 5.4x Adjusted EBITDA for the terminal quarter annualized (afterward further adjusting internet debt to reflect the pro forma affect of settlement of the forward auction agreements). Available liquidityeleven
was $i.85 billion as of Dec 31, 2021.

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During the fourth quarter of 2021, the Company settled forward sale agreements entered into in 2020 and 2021, resulting in internet gain of approximately $190 meg, which were used for general corporate purposes. The Company has approximately $113 million in remaining bachelor forrad equity (no portion of these forrad sale agreements has been settled as of February 16, 2022). Equally of December 31, 2021, in that location was approximately $513 million in remaining availability under the ATM disinterestedness program.

Dividend

On October 27, 2021, the Company announced a dividend of $0.52 per share of common stock for the quaternary quarter of 2021. The dividend was paid on Jan 7, 2022, to stockholders of record at the close of business on January three, 2022.

Additionally, equally permitted by the terms of Merger agreement, today the Visitor is announcing a dividend of $0.52 per share of common stock for the first quarter of 2022. The dividend will be paid on April 8, 2022, to stockholders of tape at the close of business on March 28, 2022. The dividend is conditioned upon and will only be payable if the merger has not closed prior to the close of business organization on the record date.

Safe Harbor

This release and the documents incorporated past reference herein incorporate certain forward-looking statements within the meaning of Section 27A of the Securities Human action of 1933, as amended, and Section 21E of the Securities Exchange Human activity of 1934, every bit amended. We intend such frontward- looking statements to be covered past the safe harbor provisions for forrad-looking statements independent in the Private Securities Litigation Reform Human activity of 1995 and include this argument for purposes of complying with these safe harbor provisions. All statements, other than statements of historical facts, are statements that could be deemed frontwards-looking statements. These statements are based on electric 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 like expressions are intended to identify such frontward-looking statements. In add-on, any statements that refer to projections of our hereafter financial performance, our predictable growth and trends in our and our customers’ corresponding 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 bodily results to differ materially and adversely from those reflected in the forrard-looking statements. Factors that could cause or contribute to such differences include, simply are not express to, (i) risks related to the awaiting Merger, including only not limited to that the Merger may not exist completed in a timely manner or at all and the failure to realize the predictable benefits of the Merger; (ii) risks related to the sale of the Company’south 4 Houston data centre avails, including but not limited to that the sale may not exist completed in a timely manner or at all and the failure to realize the anticipated benefits of the auction; (iii) the Merger or asset sale diverting direction’southward attending from the Visitor’due south ongoing business organisation operations; (four) the potential widespread and highly uncertain impact of public health outbreaks, epidemics and pandemics, such as the COVID-19 pandemic; (5) loss of central customers; (vi) indemnification and liability provisions as well as service level commitments in our contracts with customers imposing significant costs on united states in the event of losses; (vii) economical downturn, natural disaster or oversupply of data centers in the express geographic areas that nosotros serve; (8) risks related to the development of our properties including, without limitation, obtaining applicable permits, ability and connectivity, and our ability to successfully lease those properties; (9) weakening in the fundamentals for information eye existent estate, including but not limited to, increased contest, falling market rents, decreases in or slowed growth of global data, e-commerce and demand for outsourcing of information storage and deject-based applications; (x) loss of access to central tertiary-party service providers and suppliers; (eleven) risks of loss of power or cooling which may interrupt our services to our customers; (xii) inability to identify and consummate acquisitions and operate caused properties; (xiii) our failure to obtain necessary outside financing on favorable terms, or at all; (fourteen) restrictions in the instruments governing our indebtedness; (xv) risks related to environmental, social and governance matters; (xvi) unknown or contingent liabilities related to our acquisitions; (xvii) pregnant competition in our industry; (eighteen) recent turnover, or the further loss of, whatsoever of our key personnel; (19) risks associated with existent estate assets and the industry; (xx) failure to maintain our status as a REIT (as defined below) or to comply with the highly technical and circuitous REIT provisions of the Internal Revenue Lawmaking of 1986, as amended; (xxi) REIT distribution requirements could adversely affect our ability to execute our business plan; (xxii) insufficient cash available for distribution to stockholders; (xxiii) future offerings of debt may adversely affect the marketplace price of our mutual stock; (xxiv) increases in market interest rates will increase our borrowing costs and may drive potential investors to seek college dividend yields and reduce demand for our common stock; (xxv) market price and volume of stock could be volatile; (xxvi) risks related to regulatory changes impacting our customers and demand for colocation space in particular geographies; (xxvii) our international activities, including those conducted equally a result of country acquisitions and with respect to leased state and buildings, are subject to special risks different from those faced past us in the United States; (xxviii) expanded and widened price increases in certain selective materials for data centre evolution uppercase expenditures due to international trade negotiations; (xxix) a failure to comply with anti-corruption laws and regulations; (xxx) legislative or other deportment relating to taxes; (xxxi) any significant security breach or cyber-attack on us or our primal partners or customers; (xxxii) the ongoing merchandise disharmonize between the United States and the People’due south Republic of China; (xxxiii) increased operating costs and upper-case letter expenditures at our facilities, including those resulting from higher utilization past our customers, general market conditions and inflation, exceeding revenue growth; and (xxxiv) other factors affecting the real estate and technology industries mostly. More than information on potential risks and uncertainties is bachelor in our recent filings with the Securities and Exchange Commission (SEC), including CyrusOne’s Form ten-K report, Form x-Q reports, and Grade 8-K reports. We disclaim any obligation other than as required by law to publicly update or revise any forrard-looking statement to reverberate changes in underlying assumptions or factors or for new data, data or methods, future events or other changes.

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Use of Not-GAAP Financial Measures and Other Metrics

This press release contains certain not-GAAP fiscal measures that direction believes are helpful in understanding the Company’s business, equally 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 Cyberspace Debt should non be construed as being more of import than, or a substitute for, comparable GAAP financial measures. Detailed reconciliations of these non-GAAP financial measures to comparable GAAP fiscal 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 unremarkably used in the real estate investments trusts (REIT) industry, equally supplemental functioning measures. Management uses these measures every bit supplemental operation measures because, when compared flow 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 non summate these measures in the aforementioned fashion, and, as presented, they may not exist comparable to others. Therefore, FFO, Normalized FFO, NOI, and Adjusted EBITDA should exist considered only as supplements to Net (loss) income presented in accordance with GAAP as measures of our operation. FFO, Normalized FFO, NOI, and Adapted EBITDA should not be used every bit measures of our liquidity or equally indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. These measures too should not exist used as supplements to or substitutes for cash menses from operating activities computed in accordance with GAAP. The Visitor believes that Cyberspace Debt provides a useful mensurate of liquidity and fiscal health.

1Cyberspace (loss) income per diluted common share is defined equally Net (loss) income divided past the weighted average diluted mutual shares outstanding for the period, which were 127.nine million for the quaternary quarter of 2021 and 120.6 million for the quaternary quarter of 2020.

twoWe use Cyberspace Operating Income (“NOI”), which is a non-GAAP financial mensurate commonly used in the REIT industry, equally a supplemental operation measure. We use NOI every bit a supplemental functioning measure out because, when compared period over period, it captures trends in occupancy rates, rental rates and operating expenses. Nosotros besides believe that, as a widely recognized measure of the performance of REITs, NOI is used by investors equally a basis to evaluate REITs.

Nosotros summate NOI as Net (loss) income, adjusted for Sales and marketing expenses, General and administrative expenses, Depreciation and acquittal expenses, Transaction, conquering, integration and other related expenses, Interest expense, cyberspace, Gain on marketable equity investment, Loss on early extinguishment of debt, Impairment losses and loss on asset disposals, Foreign currency and derivative (gains) losses, cyberspace, Other (expense) income and Income taxation 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 back up our entire portfolio. As a result, nosotros accept excluded these Sales and marketing expenses from our NOI calculation, consistent with the handling of General and administrative expenses, which besides support our entire portfolio. Because the calculation of NOI excludes diverse expenses, the utility of NOI equally a measure out of our performance is limited. Other REITs may non calculate NOI in the same fashion. Accordingly, our NOI may not exist comparable to others. Therefore, NOI should be considered only as a supplement to Net (loss) income presented in accordance with GAAP as a mensurate of our performance. NOI should non exist used equally a measure of our liquidity or as indicative of funds available to fund our greenbacks needs, including our ability to pay dividends and make distributions. NOI besides should not exist used as a supplement to or substitute for cash catamenia from operating activities computed in accord with GAAP.

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3Adjusted EBITDA, which is a not-GAAP financial measure out, is divers as Net (loss) income as divers past GAAP adjusted for Interest expense, net; Income revenue enhancement (benefit) expense; Depreciation and acquittal expenses; Impairment losses and loss on asset disposals; Transaction, acquisition, integration and other related expenses; Legal claim costs; Stock-based compensation expense; Greenbacks 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 summate 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 unremarkably used in the REIT manufacture, as supplemental performance measures. Nosotros 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, every bit widely recognized measures of the performance of REITs, FFO and Normalized FFO are used past investors as a basis to evaluate REITs.

We summate FFO equally Net (loss) income computed in accord with GAAP before Real estate depreciation and acquittal and Impairment losses and loss on asset disposals. While information technology is consistent with the definition of FFO promulgated by the National Association of Real Manor Investment Trusts (“NAREIT”), our computation of FFO may differ from the methodology for calculating FFO used by other REITs. Accordingly, our FFO may non exist comparable to others.

We summate Normalized FFO as FFO adjusted for Loss on early extinguishment of debt; Gain on marketable equity investment; Foreign currency and derivative (gains) losses, net; New accounting standards and regulatory compliance and the related organisation implementation costs; Acquittal of tradenames; Transaction, acquisition, integration and other related expenses; Greenbacks severance and management transition costs; Severance-related stock compensation costs; and Legal merits costs. We believe our Normalized FFO calculation provides a comparable measure between different periods. Other REITs may not calculate Normalized FFO in the aforementioned fashion. Accordingly, our Normalized FFO may not be comparable to others.

In addition, considering FFO and Normalized FFO exclude Existent manor depreciation and amortization, and capture neither the changes in the value of our backdrop that upshot from use or from market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating functioning 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 (loss) income presented in accordance with GAAP as measures of our performance. FFO and Normalized FFO should non be used as measures of our liquidity or as indicative of funds bachelor to fund our cash needs, including our ability to pay dividends or make distributions. FFO and Normalized FFO as well 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 equally average monthly contractual rent during the term of the lease plus the monthly impact of installation charges, multiplied by 12. It can exist shown both inclusive and exclusive of the Visitor’s estimate of customer reimbursements for metered power.

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

viiPercentage CSF leased is calculated by dividing CSF under signed leases for colocation space (whether or not the charter has commenced billing) past full CSF. Pct CSF leased differs from percentage CSF occupied presented in the Data Center Portfolio tabular array because the leased rate includes CSF for signed leases that accept non commenced billing.

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

nineGross asset value is defined equally total assets plus accumulated depreciation.

tenLong-term debt and cyberspace debt exclude adjustments for deferred financing costs and bond discounts / premiums. Net debt, which is a non-GAAP financial measure, provides a useful mensurate of liquidity and financial wellness. The Company defines net debt every bit long-term debt and finance lease liabilities, offset by cash and greenbacks 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 touch of the net proceeds from the settlement of the forward sale agreements.

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