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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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46-0691837
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.01 par value
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CONE
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The NASDAQ Global Select Market
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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PART I. FINANCIAL INFORMATION
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PART II. OTHER INFORMATION
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June 30, 2019
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December 31, 2018
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||||
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Assets
|
|
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||||
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Investment in real estate:
|
|
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||||
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Land
|
$
|
148.0
|
|
$
|
118.5
|
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Buildings and improvements
|
1,689.7
|
|
1,677.5
|
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Equipment
|
2,869.7
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|
2,630.2
|
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Gross operating real estate
|
4,707.4
|
|
4,426.2
|
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Less accumulated depreciation
|
(1,207.4
|
)
|
(1,054.5
|
)
|
||
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Net operating real estate
|
3,500.0
|
|
3,371.7
|
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Construction in progress, including land under development
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799.2
|
|
744.9
|
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||
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Land held for future development
|
200.4
|
|
176.4
|
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||
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Total investment in real estate, net
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4,499.6
|
|
4,293.0
|
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||
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Cash and cash equivalents
|
144.1
|
|
64.4
|
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||
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Rent and other receivables (net of allowance for doubtful accounts of $1.4 and $1.7 as of June 30, 2019 and December 31, 2018, respectively)
|
268.4
|
|
234.9
|
|
||
|
Restricted cash
|
1.3
|
|
—
|
|
||
|
Operating lease right-of-use assets, net
|
78.5
|
|
—
|
|
||
|
Equity investments
|
91.9
|
|
198.1
|
|
||
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Goodwill
|
455.1
|
|
455.1
|
|
||
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Intangible assets (net of accumulated amortization of $187.0 and $166.9 as of June 30, 2019 and December 31, 2018, respectively)
|
215.3
|
|
235.7
|
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Other assets
|
115.5
|
|
111.3
|
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||
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Total assets
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$
|
5,869.7
|
|
$
|
5,592.5
|
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Liabilities and equity
|
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||||
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Debt
|
$
|
2,713.8
|
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$
|
2,624.7
|
|
|
Finance lease liabilities
|
31.6
|
|
156.7
|
|
||
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Operating lease liabilities
|
114.1
|
|
—
|
|
||
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Construction costs payable
|
149.5
|
|
195.3
|
|
||
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Accounts payable and accrued expenses
|
112.8
|
|
121.3
|
|
||
|
Dividends payable
|
53.0
|
|
51.0
|
|
||
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Deferred revenue and prepaid rents
|
166.8
|
|
148.6
|
|
||
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Deferred tax liability
|
65.5
|
|
68.9
|
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||
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Total liabilities
|
3,407.1
|
|
3,366.5
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||
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Commitments and contingencies
|
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|
||||
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Stockholders' equity
|
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|
||||
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Preferred stock, $.01 par value, 100,000,000 authorized; no shares issued or outstanding
|
—
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|
—
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||
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Common stock, $.01 par value, 500,000,000 shares authorized and 113,176,370 and 108,329,314 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
|
1.1
|
|
1.1
|
|
||
|
Additional paid in capital
|
3,089.5
|
|
2,837.4
|
|
||
|
Accumulated deficit
|
(613.0
|
)
|
(600.2
|
)
|
||
|
Accumulated other comprehensive loss
|
(15.0
|
)
|
(12.3
|
)
|
||
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Total stockholders’ equity
|
2,462.6
|
|
2,226.0
|
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||
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Total liabilities and equity
|
$
|
5,869.7
|
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$
|
5,592.5
|
|
|
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Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||
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2019
|
2018
|
2019
|
2018
|
||||||||
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Revenue
|
$
|
251.5
|
|
$
|
196.9
|
|
$
|
476.5
|
|
$
|
393.5
|
|
|
Operating expenses:
|
|
|
|
|
||||||||
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Property operating expenses
|
103.3
|
|
68.9
|
|
186.6
|
|
136.7
|
|
||||
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Sales and marketing
|
5.3
|
|
4.4
|
|
10.6
|
|
9.7
|
|
||||
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General and administrative
|
19.7
|
|
18.6
|
|
41.9
|
|
37.9
|
|
||||
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Depreciation and amortization
|
102.1
|
|
77.6
|
|
204.2
|
|
152.2
|
|
||||
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Transaction, acquisition, integration and other related expenses
|
1.4
|
|
0.4
|
|
1.7
|
|
2.3
|
|
||||
|
Total operating expenses
|
231.8
|
|
169.9
|
|
445.0
|
|
338.8
|
|
||||
|
Operating income
|
19.7
|
|
27.0
|
|
31.5
|
|
54.7
|
|
||||
|
Interest expense
|
(21.1
|
)
|
(22.8
|
)
|
(44.8
|
)
|
(43.6
|
)
|
||||
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(Loss) gain on marketable equity investment
|
(8.5
|
)
|
102.7
|
|
92.7
|
|
143.2
|
|
||||
|
Loss on early extinguishment of debt
|
—
|
|
—
|
|
—
|
|
(3.1
|
)
|
||||
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Other expense
|
—
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|
—
|
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(0.1
|
)
|
—
|
|
||||
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Net (loss) income before income taxes
|
(9.9
|
)
|
106.9
|
|
79.3
|
|
151.2
|
|
||||
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Income tax benefit (expense)
|
1.4
|
|
(1.0
|
)
|
1.6
|
|
(1.8
|
)
|
||||
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Net (loss) income
|
$
|
(8.5
|
)
|
$
|
105.9
|
|
$
|
80.9
|
|
$
|
149.4
|
|
|
Weighted average number of common shares outstanding - basic
|
113.1
|
|
98.6
|
|
110.7
|
|
97.3
|
|
||||
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Weighted average number of common shares outstanding - diluted
|
113.1
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|
99.4
|
|
111.1
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|
98.1
|
|
||||
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(Loss) income per share - basic
|
$
|
(0.08
|
)
|
$
|
1.07
|
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$
|
0.73
|
|
$
|
1.53
|
|
|
(Loss) income per share - diluted
|
$
|
(0.08
|
)
|
$
|
1.06
|
|
$
|
0.73
|
|
$
|
1.52
|
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||
|
|
2019
|
2018
|
2019
|
2018
|
||||||||
|
Net (loss) income
|
$
|
(8.5
|
)
|
$
|
105.9
|
|
$
|
80.9
|
|
$
|
149.4
|
|
|
Other comprehensive (loss) income:
|
|
|
|
|
||||||||
|
Foreign currency translation adjustment
|
(2.4
|
)
|
—
|
|
(1.8
|
)
|
0.1
|
|
||||
|
Net derivative loss on cash flow hedging instruments
|
(3.6
|
)
|
—
|
|
(0.9
|
)
|
—
|
|
||||
|
Comprehensive (loss) income
|
$
|
(14.5
|
)
|
$
|
105.9
|
|
$
|
78.2
|
|
$
|
149.5
|
|
|
|
Stockholders' Equity
|
||||||||||||||||
|
|
Shares of Common Stock Outstanding
|
Common Stock
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Accumulated Other Comprehensive Income (Loss)
|
Total
Stockholders'
Equity
|
|||||||||||
|
|
|||||||||||||||||
|
Balance at January 1, 2019
|
108.3
|
|
$
|
1.1
|
|
$
|
2,837.4
|
|
$
|
(600.2
|
)
|
$
|
(12.3
|
)
|
$
|
2,226.0
|
|
|
Adoption of accounting standards:
|
|
|
|
|
|
|
|
|
|||||||||
|
Impact of adoption of ASU 2016-02 related to leases (See Note 3)
|
—
|
|
—
|
|
—
|
|
9.5
|
|
—
|
|
9.5
|
|
|||||
|
Net income
|
—
|
|
—
|
|
—
|
|
89.4
|
|
—
|
|
89.4
|
|
|||||
|
Issuance of common stock, net
|
2.0
|
|
—
|
|
105.0
|
|
—
|
|
—
|
|
105.0
|
|
|||||
|
Stock-based compensation expense
|
—
|
|
—
|
|
4.5
|
|
—
|
|
|
4.5
|
|
||||||
|
Tax payment upon exercise of equity awards
|
—
|
|
—
|
|
(8.7
|
)
|
—
|
|
—
|
|
(8.7
|
)
|
|||||
|
Foreign currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
0.6
|
|
0.6
|
|
|||||
|
Net derivative gain on cash flow hedging instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
2.7
|
|
2.7
|
|
|||||
|
Dividends declared, $0.46 per share
|
—
|
|
—
|
|
—
|
|
(50.9
|
)
|
—
|
|
(50.9
|
)
|
|||||
|
Balance at March 31, 2019
|
110.3
|
|
$
|
1.1
|
|
$
|
2,938.2
|
|
$
|
(552.2
|
)
|
$
|
(9.0
|
)
|
$
|
2,378.1
|
|
|
Net income
|
—
|
|
—
|
|
—
|
|
(8.5
|
)
|
—
|
|
(8.5
|
)
|
|||||
|
Issuance of common stock, net
|
2.9
|
|
—
|
|
147.6
|
|
—
|
|
—
|
|
147.6
|
|
|||||
|
Other
|
—
|
|
—
|
|
0.1
|
|
—
|
|
—
|
|
0.1
|
|
|||||
|
Stock-based compensation expense
|
—
|
|
—
|
|
3.7
|
|
—
|
|
—
|
|
3.7
|
|
|||||
|
Tax payment upon exercise of equity awards
|
—
|
|
—
|
|
(0.1
|
)
|
—
|
|
—
|
|
(0.1
|
)
|
|||||
|
Foreign currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.4
|
)
|
(2.4
|
)
|
|||||
|
Net derivative gain on cash flow hedging instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
(3.6
|
)
|
(3.6
|
)
|
|||||
|
Dividends declared, $0.46 per share
|
—
|
|
—
|
|
—
|
|
(52.3
|
)
|
—
|
|
(52.3
|
)
|
|||||
|
Balance at June 30, 2019
|
113.2
|
|
$
|
1.1
|
|
$
|
3,089.5
|
|
$
|
(613.0
|
)
|
$
|
(15.0
|
)
|
$
|
2,462.6
|
|
|
|
Stockholders' Equity
|
||||||||||||||||
|
|
Shares of Common Stock Outstanding
|
Common Stock
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Accumulated Other Comprehensive Income (Loss)
|
Total
Stockholders'
Equity
|
|||||||||||
|
|
|||||||||||||||||
|
Balance at January 1, 2018
|
96.1
|
|
$
|
1.0
|
|
$
|
2,125.6
|
|
$
|
(486.9
|
)
|
$
|
74.2
|
|
$
|
1,713.9
|
|
|
Adoption of accounting standards:
|
|
|
|
|
|
|
|||||||||||
|
Revenue recognition, cumulative modified retrospective
|
—
|
|
—
|
|
—
|
|
0.3
|
|
—
|
|
0.3
|
|
|||||
|
Financial instruments (equity investment), cumulative adjustment
|
—
|
|
—
|
|
—
|
|
75.6
|
|
(75.6
|
)
|
—
|
|
|||||
|
Net income
|
—
|
|
—
|
|
—
|
|
43.5
|
|
—
|
|
43.5
|
|
|||||
|
Issuance of common stock, net
|
2.8
|
|
—
|
|
142.9
|
|
—
|
|
—
|
|
142.9
|
|
|||||
|
Stock-based compensation expense
|
—
|
|
—
|
|
3.9
|
|
—
|
|
—
|
|
3.9
|
|
|||||
|
Tax payment upon exercise of equity awards
|
—
|
|
—
|
|
(4.4
|
)
|
—
|
|
—
|
|
(4.4
|
)
|
|||||
|
Foreign currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
0.1
|
|
0.1
|
|
|||||
|
Dividends declared, $0.46 per share
|
—
|
|
—
|
|
—
|
|
(45.6
|
)
|
—
|
|
(45.6
|
)
|
|||||
|
Balance at March 31, 2018
|
98.9
|
|
1.0
|
|
2,268.0
|
|
(413.1
|
)
|
(1.3
|
)
|
1,854.6
|
|
|||||
|
Net income
|
—
|
|
—
|
|
—
|
|
105.9
|
|
—
|
|
105.9
|
|
|||||
|
Issuance of common stock, net
|
0.2
|
|
—
|
|
9.3
|
|
—
|
|
—
|
|
9.3
|
|
|||||
|
Stock-based compensation expense
|
—
|
|
—
|
|
4.5
|
|
—
|
|
—
|
|
4.5
|
|
|||||
|
Tax payment upon exercise of equity awards
|
—
|
|
—
|
|
(0.3
|
)
|
—
|
|
—
|
|
(0.3
|
)
|
|||||
|
Dividends declared, $0.46 per share
|
—
|
|
—
|
|
—
|
|
(45.8
|
)
|
—
|
|
(45.8
|
)
|
|||||
|
Balance at June 30, 2018
|
99.1
|
|
1.0
|
|
2,281.5
|
|
(353.0
|
)
|
(1.3
|
)
|
$
|
1,928.2
|
|
||||
|
|
Six Months Ended June 30,
|
|||||
|
|
2019
|
2018
|
||||
|
Cash flows from operating activities:
|
|
|
||||
|
Net income
|
$
|
80.9
|
|
$
|
149.4
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
||||
|
Depreciation and amortization
|
204.2
|
|
152.2
|
|
||
|
Provision for bad debt expense
|
(0.3
|
)
|
0.4
|
|
||
|
Unrealized gain on marketable equity investment
|
(25.8
|
)
|
(143.2
|
)
|
||
|
Realized gain on marketable equity investment
|
(66.9
|
)
|
—
|
|
||
|
Loss on early extinguishment of debt
|
—
|
|
3.1
|
|
||
|
Interest expense amortization, net
|
2.3
|
|
1.8
|
|
||
|
Stock-based compensation expense
|
8.2
|
|
8.4
|
|
||
|
Deferred income tax expense
|
(3.4
|
)
|
—
|
|
||
|
Operating lease cost
|
9.6
|
|
—
|
|
||
|
Other
|
(0.2
|
)
|
—
|
|
||
|
Change in operating assets and liabilities:
|
|
|
||||
|
Rent and other receivables, net and other assets
|
(41.1
|
)
|
(36.8
|
)
|
||
|
Accounts payable and accrued expenses
|
(8.2
|
)
|
(3.1
|
)
|
||
|
Deferred revenue and prepaid rents
|
18.0
|
|
16.3
|
|
||
|
Operating lease liabilities
|
(9.8
|
)
|
—
|
|
||
|
Net cash provided by operating activities
|
167.5
|
|
148.5
|
|
||
|
Cash flows from investing activities:
|
|
|
||||
|
Investment in real estate
|
(514.8
|
)
|
(322.7
|
)
|
||
|
Proceeds from sale of equity investments
|
199.8
|
|
—
|
|
||
|
Equity investments
|
(0.3
|
)
|
—
|
|
||
|
Net cash used in investing activities
|
(315.3
|
)
|
(322.7
|
)
|
||
|
Cash flows from financing activities:
|
|
|
||||
|
Issuance of common stock, net
|
252.6
|
|
152.2
|
|
||
|
Dividends paid
|
(101.3
|
)
|
(86.6
|
)
|
||
|
Proceeds from revolving credit facility
|
287.8
|
|
—
|
|
||
|
Proceeds from unsecured term loan
|
—
|
|
985.4
|
|
||
|
Repayments of unsecured term loan
|
(200.0
|
)
|
(902.7
|
)
|
||
|
Payments on finance lease liabilities
|
(1.2
|
)
|
(5.1
|
)
|
||
|
Tax payment upon exercise of equity awards
|
(8.8
|
)
|
(4.7
|
)
|
||
|
Net cash provided by financing activities
|
229.1
|
|
138.5
|
|
||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(0.3
|
)
|
—
|
|
||
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
81.0
|
|
(35.7
|
)
|
||
|
Cash, cash equivalents and restricted cash at beginning of period
|
64.4
|
|
151.9
|
|
||
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
145.4
|
|
$
|
116.2
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
||||
|
Cash paid for interest, including amounts capitalized of $18.1 million and $10.4 million in 2019 and 2018, respectively
|
$
|
62.7
|
|
$
|
53.3
|
|
|
Cash paid for income taxes
|
2.8
|
|
3.0
|
|
||
|
Non-cash investing and financing activities:
|
|
|
||||
|
Construction costs payable
|
149.5
|
|
113.3
|
|
||
|
Dividends payable
|
53.0
|
|
46.5
|
|
||
|
•
|
Straight-line rent receivable of $128.7 million included in rent and other receivables was previously included in other assets.
|
|
•
|
The cash flow effect of the change in proceeds from our unsecured term loan of $985.4 million included in proceeds from unsecured term loan was previously included in debt.
|
|
•
|
The cash flow effect of the change in repayments of our unsecured term loan of $902.7 million included in repayments of unsecured term loan was previously included in debt.
|
|
Impact to the consolidated balance sheets:
|
As of December 31, 2018
|
As of June 30, 2019
|
||||
|
Buildings and improvements
|
$
|
77.4
|
|
$
|
—
|
|
|
Operating lease right-of-use assets
|
—
|
|
46.9
|
|
||
|
Finance lease liabilities
|
123.3
|
|
—
|
|
||
|
Operating lease liabilities
|
—
|
|
82.1
|
|
||
|
For the Period Ended June 30, 2019
|
Minimum Lease Payments
|
||
|
2019
|
$
|
363.6
|
|
|
2020
|
679.7
|
|
|
|
2021
|
577.3
|
|
|
|
2022
|
486.0
|
|
|
|
2023
|
395.4
|
|
|
|
2024
|
307.3
|
|
|
|
Thereafter
|
953.8
|
|
|
|
Total
|
$
|
3,763.1
|
|
|
For the Period Ended December 31, 2018
|
Minimum Lease Payments
|
||
|
2019
|
$
|
647.6
|
|
|
2020
|
553.7
|
|
|
|
2021
|
453.0
|
|
|
|
2022
|
365.5
|
|
|
|
2023
|
284.4
|
|
|
|
Thereafter
|
835.9
|
|
|
|
Total
|
$
|
3,140.1
|
|
|
Lease Revenue
|
Three Months Ended June 30, 2019
|
Six Months Ended June 30, 2019
|
||||
|
Colocation (Minimum lease payments)
|
$
|
197.3
|
|
$
|
385.6
|
|
|
Meter power reimbursements (Variable lease payments)
|
31.7
|
|
60.3
|
|
||
|
Total Lease revenue
|
$
|
229.0
|
|
$
|
445.9
|
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||
|
Revenue from contracts with customers
|
2019
|
2018
|
2019
|
2018
|
||||||||
|
Equipment sales and services
|
$
|
17.1
|
|
$
|
2.4
|
|
$
|
21.1
|
|
8.2
|
|
|
|
Other revenue
|
5.4
|
|
4.4
|
|
9.5
|
|
8.4
|
|
||||
|
Total Revenue from contracts with customers
|
$
|
22.5
|
|
$
|
6.8
|
|
$
|
30.6
|
|
$
|
16.6
|
|
|
|
Three Months Ended June 30, 2019
|
Six Months Ended June 30, 2019
|
||||
|
Operating lease cost
|
$
|
4.6
|
|
$
|
9.6
|
|
|
Finance lease cost:
|
|
|
||||
|
Amortization of assets
|
0.6
|
|
1.1
|
|
||
|
Interest on lease liabilities
|
0.4
|
|
0.9
|
|
||
|
Total net lease cost
|
$
|
5.6
|
|
$
|
11.6
|
|
|
|
June 30, 2019
|
||
|
Operating leases:
|
|
||
|
Operating lease right-of-use assets
|
$
|
78.5
|
|
|
Operating lease liabilities
|
$
|
114.1
|
|
|
Finance leases:
|
|
||
|
Property and equipment, at cost
|
$
|
33.1
|
|
|
Accumulated amortization
|
(3.8
|
)
|
|
|
Property and equipment, net
|
$
|
29.3
|
|
|
Finance lease liabilities
|
$
|
31.6
|
|
|
|
|
||
|
Weighted average remaining lease term (in years):
|
|
||
|
Operating leases
|
12.2
|
|
|
|
Finance leases
|
18.1
|
|
|
|
|
|
||
|
Weighted average discount rate:
|
|
||
|
Operating leases
|
4.5
|
%
|
|
|
Finance leases
|
5.1
|
%
|
|
|
|
Six Months Ended June 30, 2019
|
||
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
|
Operating cash flows from operating leases
|
$
|
9.8
|
|
|
Operating cash flows from finance leases
|
0.9
|
|
|
|
Financing cash flows from finance leases
|
1.2
|
|
|
|
|
|
||
|
Non-cash right-of-use assets obtained in exchange for lease liabilities:
|
|
||
|
Operating leases
|
$
|
85.7
|
|
|
|
As of June 30, 2019
|
||||||
|
|
Operating Leases
|
|
Finance Leases
|
||||
|
2019
|
$
|
10.2
|
|
|
$
|
2.1
|
|
|
2020
|
19.5
|
|
|
4.2
|
|
||
|
2021
|
15.3
|
|
|
4.1
|
|
||
|
2022
|
15.7
|
|
|
2.9
|
|
||
|
2023
|
11.9
|
|
|
1.8
|
|
||
|
2024
|
7.6
|
|
|
1.4
|
|
||
|
Thereafter
|
70.4
|
|
|
29.9
|
|
||
|
Total lease payments
|
$
|
150.6
|
|
|
$
|
46.4
|
|
|
Less: Imputed interest
|
(36.5
|
)
|
|
(14.8
|
)
|
||
|
Total lease obligations
|
$
|
114.1
|
|
|
$
|
31.6
|
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
|
2019
|
$
|
5.0
|
|
|
$
|
2.7
|
|
|
2020
|
4.9
|
|
|
2.8
|
|
||
|
2021
|
3.7
|
|
|
2.9
|
|
||
|
2022
|
3.7
|
|
|
2.0
|
|
||
|
2023
|
3.5
|
|
|
1.0
|
|
||
|
Thereafter
|
43.4
|
|
|
22.0
|
|
||
|
Total lease payments
|
$
|
64.2
|
|
|
$
|
33.4
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
|
Investment in Real Estate
|
Intangible Assets
|
|
Investment in Real Estate
|
Intangible Assets
|
||||||||||||||||||||||||||
|
|
Buildings and Improvements
|
Equipment
|
Customer Relationships
|
In Place Leases
|
Other Contract Intangible Assets
|
|
Buildings and Improvements
|
Equipment
|
Customer Relationships
|
In Place Leases
|
Other Contract Intangible Assets
|
||||||||||||||||||||
|
Cost
|
$
|
1,689.7
|
|
$
|
2,869.7
|
|
$
|
247.1
|
|
$
|
135.9
|
|
$
|
19.3
|
|
|
$
|
1,677.5
|
|
$
|
2,630.2
|
|
$
|
247.1
|
|
$
|
136.0
|
|
$
|
19.5
|
|
|
Less: accumulated depreciation and amortization
|
(504.0
|
)
|
(703.4
|
)
|
(144.5
|
)
|
(33.7
|
)
|
(8.8
|
)
|
|
(481.8
|
)
|
(572.7
|
)
|
(137.9
|
)
|
(21.1
|
)
|
(7.9
|
)
|
||||||||||
|
Net
|
$
|
1,185.7
|
|
$
|
2,166.3
|
|
$
|
102.6
|
|
$
|
102.2
|
|
$
|
10.5
|
|
|
$
|
1,195.7
|
|
$
|
2,057.5
|
|
$
|
109.2
|
|
$
|
114.9
|
|
$
|
11.6
|
|
|
Buildings
|
30 years
|
|
Building improvements
|
30 years
|
|
Equipment
|
20 years
|
|
IN MILLIONS
|
Three months ended June 30, 2019
|
Six months ended June 30, 2019
|
||||
|
Net (loss) gain on marketable equity investments
|
$
|
(8.5
|
)
|
$
|
92.7
|
|
|
Less: Net (loss) gain recognized on marketable equity investments sold
|
(5.3
|
)
|
66.9
|
|
||
|
Unrealized (loss) gain on marketable equity investment held as of June 30, 2019
|
$
|
(3.2
|
)
|
$
|
25.8
|
|
|
|
June 30, 2019
|
December 31, 2018
|
||||
|
Deferred leasing and other contract costs
|
$
|
44.2
|
|
$
|
43.6
|
|
|
Prepaid expenses
|
26.8
|
|
26.4
|
|
||
|
Non-real estate assets, net
|
18.9
|
|
18.4
|
|
||
|
Other assets
|
25.6
|
|
22.9
|
|
||
|
Total
|
$
|
115.5
|
|
$
|
111.3
|
|
|
|
June 30, 2019
|
December 31, 2018
|
Interest Rate(a)
|
Maturity Date
|
||||||
|
$3.0 Billion Credit Facility:
|
|
|
|
|
|
|
||||
|
$1.7 Billion Revolving Credit Facility:
|
|
|
|
March 2022(b)
|
||||||
|
US Revolver
|
$
|
270.0
|
|
$
|
—
|
|
Monthly LIBOR + 1.55%
|
|
||
|
EUR Revolver
|
153.5
|
|
143.0
|
|
Monthly EURIBOR + 1.55%
|
|
||||
|
GBP Revolver
|
6.4
|
|
—
|
|
Monthly LIBOR + 1.55%
|
|
||||
|
2023 Term Loan
|
800.0
|
|
1,000.0
|
|
Monthly LIBOR + 1.50%
|
March 2023
|
||||
|
2025 Term Loan
|
300.0
|
|
300.0
|
|
Monthly LIBOR + 1.80%
|
March 2025
|
||||
|
2024 Notes, including bond premium of $4.9 million
|
704.9
|
|
705.5
|
|
5.000
|
%
|
March 2024
|
|||
|
2027 Notes, including bond premium of $8.4 million
|
508.4
|
|
509.1
|
|
5.375
|
%
|
March 2027
|
|||
|
Deferred financing costs
|
(29.4
|
)
|
(32.9
|
)
|
—
|
|
—
|
|
||
|
Total
|
$
|
2,713.8
|
|
$
|
2,624.7
|
|
|
|
||
|
|
June 30, 2019
|
December 31, 2018
|
||||||||||
|
|
Carrying Value
|
Fair Value
|
Carrying Value
|
Fair Value
|
||||||||
|
2024 Notes
|
$
|
704.9
|
|
$
|
720.1
|
|
$
|
705.5
|
|
$
|
684.1
|
|
|
2027 Notes
|
508.4
|
|
528.8
|
|
509.1
|
|
488.0
|
|
||||
|
GDS Equity investment
|
79.0
|
|
79.0
|
|
185.5
|
|
185.5
|
|
||||
|
|
For the Three Months Ended June 30,
|
For the Six Months Ended June 30,
|
||||||||||
|
|
2019
|
2018
|
2019
|
2018
|
||||||||
|
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
||||||||
|
Cross-Currency Swaps:
|
|
|
|
|
||||||||
|
Amount of gain (loss) recognized in OCI for derivatives
|
$
|
(3.6
|
)
|
$
|
—
|
|
(0.9
|
)
|
$
|
—
|
|
|
|
Amount of gain (loss) reclassified from accumulated OCI for derivatives
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Amount of gain (loss) recognized in earnings
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
2019
|
2018
|
||||||||
|
|
Units
|
Weighted Average Grant Date Fair Value
|
Units
|
Weighted Average Grant Date Fair Value
|
||||||
|
Outstanding January 1,
|
511,049
|
|
$
|
56.23
|
|
265,002
|
|
$
|
56.08
|
|
|
Granted
|
391,911
|
|
48.50
|
|
326,690
|
|
51.95
|
|
||
|
Exercised
|
(130,210
|
)
|
45.37
|
|
(87,058
|
)
|
44.28
|
|
||
|
Forfeited
|
(71,265
|
)
|
53.16
|
|
(14,324
|
)
|
54.84
|
|
||
|
Outstanding June 30,
|
701,485
|
|
$
|
54.24
|
|
490,310
|
|
$
|
55.46
|
|
|
|
|
|
|
|
||||||
|
Time-based RSUs outstanding
|
347,600
|
|
$
|
53.38
|
|
246,546
|
|
$
|
50.72
|
|
|
Performance-based RSUs outstanding
|
353,885
|
|
$
|
55.08
|
|
243,764
|
|
$
|
60.25
|
|
|
|
2019
|
2018
|
||||||||
|
|
Shares
|
Weighted Average Grant Date Fair Value
|
Shares
|
Weighted Average Grant Date Fair Value
|
||||||
|
Outstanding January 1,
|
419,356
|
|
$
|
35.73
|
|
715,098
|
|
$
|
32.21
|
|
|
Granted
|
16,681
|
|
52.46
|
|
17,052
|
|
51.31
|
|
||
|
Exercised
|
(370,554
|
)
|
35.38
|
|
(221,586
|
)
|
27.41
|
|
||
|
Forfeited
|
(34,603
|
)
|
37.09
|
|
(51,197
|
)
|
28.99
|
|
||
|
Outstanding June 30,
|
30,880
|
|
$
|
47.39
|
|
459,367
|
|
$
|
35.59
|
|
|
|
|
|
|
|
||||||
|
Time-based RSs outstanding
|
30,880
|
|
$
|
47.39
|
|
346,802
|
|
$
|
37.95
|
|
|
Performance-based RSs outstanding
|
—
|
|
$
|
—
|
|
112,565
|
|
$
|
28.32
|
|
|
|
2019
|
2018
|
||||||||
|
|
Options
|
Weighted Average Exercise Price
|
Options
|
Weighted Average Exercise Price
|
||||||
|
Outstanding January 1,
|
401,223
|
|
$
|
31.96
|
|
415,459
|
|
$
|
31.67
|
|
|
Granted
|
—
|
|
—
|
|
—
|
|
—
|
|
||
|
Exercised
|
(25,586
|
)
|
36.70
|
|
(2,788
|
)
|
23.58
|
|
||
|
Forfeited
|
(551
|
)
|
23.58
|
|
—
|
|
—
|
|
||
|
Outstanding June 30,
|
375,086
|
|
$
|
31.64
|
|
412,671
|
|
$
|
31.72
|
|
|
|
|
|
|
|
||||||
|
Time-based stock options outstanding
|
323,101
|
|
$
|
32.94
|
|
348,137
|
|
$
|
33.23
|
|
|
Performance-based stock options outstanding
|
51,985
|
|
$
|
23.58
|
|
64,534
|
|
$
|
23.58
|
|
|
IN MILLIONS, except per share amounts
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
|
Basic
|
Diluted
|
|
Basic
|
Diluted
|
|
Basic
|
Diluted
|
|
Basic
|
Diluted
|
||||||||||||||||
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net (loss) income
|
$
|
(8.5
|
)
|
$
|
(8.5
|
)
|
|
$
|
105.9
|
|
$
|
105.9
|
|
|
$
|
80.9
|
|
$
|
80.9
|
|
|
$
|
149.4
|
|
$
|
149.4
|
|
|
Less: Restricted stock dividends
|
(0.2
|
)
|
(0.2
|
)
|
|
(0.3
|
)
|
(0.3
|
)
|
|
(0.3
|
)
|
(0.3
|
)
|
|
(0.5
|
)
|
(0.5
|
)
|
||||||||
|
Net (loss) income available to stockholders
|
$
|
(8.7
|
)
|
$
|
(8.7
|
)
|
|
$
|
105.6
|
|
$
|
105.6
|
|
|
$
|
80.6
|
|
$
|
80.6
|
|
|
$
|
148.9
|
|
$
|
148.9
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Weighted average shares outstanding-basic
|
113.1
|
|
113.1
|
|
|
98.6
|
|
98.6
|
|
|
110.7
|
|
110.7
|
|
|
97.3
|
|
97.3
|
|
||||||||
|
Performance-based restricted stock and units
|
|
—
|
|
|
|
0.8
|
|
|
|
0.4
|
|
|
|
0.8
|
|
||||||||||||
|
Weighted average shares outstanding-diluted
|
|
113.1
|
|
|
|
99.4
|
|
|
|
111.1
|
|
|
|
98.1
|
|
||||||||||||
|
EPS:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(Loss) income per share-basic
|
$
|
(0.08
|
)
|
|
|
$
|
1.07
|
|
|
|
$
|
0.73
|
|
|
|
$
|
1.53
|
|
|
||||||||
|
Effect of dilutive shares:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(Loss) income per share-diluted
|
|
$
|
(0.08
|
)
|
|
|
$
|
1.06
|
|
|
|
$
|
0.73
|
|
|
|
$
|
1.52
|
|
||||||||
|
•
|
upon the sale or other disposition (including by way of consolidation or merger) of such Guarantor or of all of the capital stock of such Guarantor such that such Guarantor is no longer a restricted subsidiary under the indentures,
|
|
•
|
upon the sale or disposition of all or substantially all of the assets of the Guarantor,
|
|
•
|
upon the LP Co-issuer designating such Guarantor as an unrestricted subsidiary under the terms of the indentures,
|
|
•
|
if such Guarantor is no longer a guarantor or other obligor of any other indebtedness of the LP Co-issuer or the Parent Guarantor,
|
|
•
|
upon the LP Co-issuer designating such Guarantor as an excluded subsidiary under the terms of the indentures,
|
|
•
|
upon the defeasance or discharge of the 2024 Notes or 2027 Notes, as applicable, in accordance with the terms of the indentures, and
|
|
•
|
upon the 2024 Notes or 2027 Notes, as applicable, being rated investment grade by at least two rating agencies and no default or event of default shall have occurred and be continuing.
|
|
|
As of June 30, 2019
|
|||||||||||||||||||||||
|
|
Parent
Guarantor |
General
Partner |
LP
Co-issuer |
Finance
Co-issuer |
Guarantor Subsidiaries
|
Non-
Guarantors |
Eliminations/Consolidations
|
Total
|
||||||||||||||||
|
Total investment in real estate, net
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,718.4
|
|
$
|
725.4
|
|
$
|
55.8
|
|
$
|
4,499.6
|
|
|
Cash and cash equivalents
|
—
|
|
—
|
|
—
|
|
—
|
|
118.7
|
|
25.4
|
|
—
|
|
144.1
|
|
||||||||
|
Investment in subsidiaries
|
2,443.5
|
|
17.1
|
|
3,326.9
|
|
—
|
|
—
|
|
—
|
|
(5,787.5
|
)
|
—
|
|
||||||||
|
Rent and other receivables, net
|
—
|
|
—
|
|
0.3
|
|
—
|
|
241.9
|
|
26.2
|
|
—
|
|
268.4
|
|
||||||||
|
Restricted cash
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.3
|
|
—
|
|
1.3
|
|
||||||||
|
Operating lease right-of-use assets, net
|
—
|
|
—
|
|
—
|
|
—
|
|
43.2
|
|
35.3
|
|
—
|
|
78.5
|
|
||||||||
|
Intercompany receivable
|
16.3
|
|
—
|
|
1,867.1
|
|
—
|
|
16.8
|
|
—
|
|
(1,900.2
|
)
|
—
|
|
||||||||
|
Equity investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
91.9
|
|
—
|
|
91.9
|
|
||||||||
|
Goodwill
|
—
|
|
—
|
|
—
|
|
—
|
|
455.1
|
|
—
|
|
—
|
|
455.1
|
|
||||||||
|
Intangible assets, net
|
—
|
|
—
|
|
—
|
|
—
|
|
166.7
|
|
48.6
|
|
—
|
|
215.3
|
|
||||||||
|
Other assets
|
—
|
|
—
|
|
0.5
|
|
—
|
|
95.3
|
|
19.7
|
|
—
|
|
115.5
|
|
||||||||
|
Total assets
|
$
|
2,459.8
|
|
$
|
17.1
|
|
$
|
5,194.8
|
|
$
|
—
|
|
$
|
4,856.1
|
|
$
|
973.8
|
|
$
|
(7,631.9
|
)
|
$
|
5,869.7
|
|
|
Debt
|
$
|
—
|
|
$
|
—
|
|
$
|
2,713.8
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,713.8
|
|
|
Intercompany payable
|
—
|
|
—
|
|
16.3
|
|
—
|
|
1,867.1
|
|
16.8
|
|
(1,900.2
|
)
|
—
|
|
||||||||
|
Finance lease liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
4.7
|
|
26.9
|
|
—
|
|
31.6
|
|
||||||||
|
Operating lease liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
77.5
|
|
36.6
|
|
—
|
|
114.1
|
|
||||||||
|
Construction costs payable
|
—
|
|
—
|
|
—
|
|
—
|
|
102.5
|
|
47.0
|
|
—
|
|
149.5
|
|
||||||||
|
Accounts payable and accrued expenses
|
—
|
|
—
|
|
21.2
|
|
—
|
|
83.8
|
|
7.8
|
|
—
|
|
112.8
|
|
||||||||
|
Dividends payable
|
53.0
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
53.0
|
|
||||||||
|
Deferred revenue and prepaid rents
|
—
|
|
—
|
|
—
|
|
—
|
|
161.1
|
|
5.7
|
|
—
|
|
166.8
|
|
||||||||
|
Deferred tax liability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
65.5
|
|
—
|
|
65.5
|
|
||||||||
|
Total liabilities
|
53.0
|
|
—
|
|
2,751.3
|
|
—
|
|
2,296.7
|
|
206.3
|
|
(1,900.2
|
)
|
3,407.1
|
|
||||||||
|
Total stockholders' equity
|
2,406.8
|
|
17.1
|
|
2,443.5
|
|
—
|
|
2,559.4
|
|
767.5
|
|
(5,731.7
|
)
|
2,462.6
|
|
||||||||
|
Total liabilities and equity
|
$
|
2,459.8
|
|
$
|
17.1
|
|
$
|
5,194.8
|
|
$
|
—
|
|
$
|
4,856.1
|
|
$
|
973.8
|
|
$
|
(7,631.9
|
)
|
$
|
5,869.7
|
|
|
|
As of December 31, 2018
|
|||||||||||||||||||||||
|
|
Parent
Guarantor |
General
Partner |
LP
Co-issuer |
Finance
Co-issuer |
Guarantor Subsidiaries
|
Non-
Guarantors |
Eliminations/Consolidations
|
Total
|
||||||||||||||||
|
Total investment in real estate, net
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,611.2
|
|
$
|
644.9
|
|
$
|
36.9
|
|
$
|
4,293.0
|
|
|
Cash and cash equivalents
|
—
|
|
—
|
|
—
|
|
—
|
|
27.2
|
|
37.2
|
|
—
|
|
64.4
|
|
||||||||
|
Investment in subsidiaries
|
2,216.9
|
|
22.2
|
|
3,122.5
|
|
—
|
|
—
|
|
—
|
|
(5,361.6
|
)
|
—
|
|
||||||||
|
Rent and other receivables, net
|
—
|
|
—
|
|
—
|
|
—
|
|
218.7
|
|
16.2
|
|
—
|
|
234.9
|
|
||||||||
|
Intercompany receivable
|
23.2
|
|
—
|
|
1,761.5
|
|
—
|
|
6.8
|
|
—
|
|
(1,791.5
|
)
|
—
|
|
||||||||
|
Equity investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
198.1
|
|
—
|
|
198.1
|
|
||||||||
|
Goodwill
|
—
|
|
—
|
|
—
|
|
—
|
|
455.1
|
|
—
|
|
—
|
|
455.1
|
|
||||||||
|
Intangible assets, net
|
—
|
|
—
|
|
—
|
|
—
|
|
178.1
|
|
57.6
|
|
—
|
|
235.7
|
|
||||||||
|
Other assets
|
—
|
|
—
|
|
0.5
|
|
—
|
|
94.4
|
|
16.4
|
|
—
|
|
111.3
|
|
||||||||
|
Total assets
|
$
|
2,240.1
|
|
$
|
22.2
|
|
$
|
4,884.5
|
|
$
|
—
|
|
$
|
4,591.5
|
|
$
|
970.4
|
|
$
|
(7,116.2
|
)
|
$
|
5,592.5
|
|
|
Debt
|
$
|
—
|
|
$
|
—
|
|
$
|
2,624.7
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,624.7
|
|
|
Intercompany payable
|
—
|
|
—
|
|
23.2
|
|
—
|
|
1,761.5
|
|
6.8
|
|
(1,791.5
|
)
|
—
|
|
||||||||
|
Finance lease liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
104.0
|
|
52.7
|
|
—
|
|
156.7
|
|
||||||||
|
Construction costs payable
|
—
|
|
—
|
|
—
|
|
—
|
|
175.6
|
|
19.7
|
|
—
|
|
195.3
|
|
||||||||
|
Accounts payable and accrued expenses
|
—
|
|
—
|
|
19.7
|
|
—
|
|
95.9
|
|
5.7
|
|
—
|
|
121.3
|
|
||||||||
|
Dividends payable
|
51.0
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
51.0
|
|
||||||||
|
Deferred revenue and prepaid rents
|
—
|
|
—
|
|
—
|
|
—
|
|
144.9
|
|
3.7
|
|
—
|
|
148.6
|
|
||||||||
|
Deferred tax liability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
68.9
|
|
—
|
|
68.9
|
|
||||||||
|
Total liabilities
|
51.0
|
|
—
|
|
2,667.6
|
|
—
|
|
2,281.9
|
|
157.5
|
|
(1,791.5
|
)
|
3,366.5
|
|
||||||||
|
Total stockholders' equity
|
2,189.1
|
|
22.2
|
|
2,216.9
|
|
—
|
|
2,309.6
|
|
812.9
|
|
(5,324.7
|
)
|
2,226.0
|
|
||||||||
|
Total liabilities and equity
|
$
|
2,240.1
|
|
$
|
22.2
|
|
$
|
4,884.5
|
|
$
|
—
|
|
$
|
4,591.5
|
|
$
|
970.4
|
|
$
|
(7,116.2
|
)
|
$
|
5,592.5
|
|
|
|
Three Months Ended June 30, 2019
|
|||||||||||||||||||||||
|
|
Parent
Guarantor |
General
Partner |
LP
Co-issuer |
Finance
Co-issuer |
Guarantor Subsidiaries
|
Non-
Guarantors |
Eliminations/ Consolidations
|
Total
|
||||||||||||||||
|
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
234.9
|
|
$
|
16.6
|
|
$
|
—
|
|
$
|
251.5
|
|
|
Total operating expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
206.1
|
|
25.7
|
|
—
|
|
231.8
|
|
||||||||
|
Operating income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
28.8
|
|
(9.1
|
)
|
—
|
|
19.7
|
|
||||||||
|
Interest expense
|
—
|
|
—
|
|
(30.4
|
)
|
—
|
|
—
|
|
(0.3
|
)
|
9.6
|
|
(21.1
|
)
|
||||||||
|
(Loss) gain on marketable equity investment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8.5
|
)
|
—
|
|
(8.5
|
)
|
||||||||
|
(Loss) income before income taxes
|
—
|
|
—
|
|
(30.4
|
)
|
—
|
|
28.8
|
|
(17.9
|
)
|
9.6
|
|
(9.9
|
)
|
||||||||
|
Income tax (expense) benefit
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.0
|
)
|
2.4
|
|
—
|
|
1.4
|
|
||||||||
|
Equity (loss) earnings related to investment in subsidiaries
|
(24.1
|
)
|
(0.2
|
)
|
9.0
|
|
—
|
|
—
|
|
—
|
|
15.3
|
|
—
|
|
||||||||
|
Net (loss) income
|
(24.1
|
)
|
(0.2
|
)
|
(21.4
|
)
|
—
|
|
27.8
|
|
(15.5
|
)
|
24.9
|
|
(8.5
|
)
|
||||||||
|
Other comprehensive income
|
—
|
|
—
|
|
(2.7
|
)
|
—
|
|
—
|
|
(3.3
|
)
|
—
|
|
(6.0
|
)
|
||||||||
|
Comprehensive (loss) income
|
$
|
(24.1
|
)
|
$
|
(0.2
|
)
|
$
|
(24.1
|
)
|
$
|
—
|
|
$
|
27.8
|
|
$
|
(18.8
|
)
|
$
|
24.9
|
|
$
|
(14.5
|
)
|
|
|
Three Months Ended June 30, 2018
|
|||||||||||||||||||||||
|
|
Parent
Guarantor |
General
Partner |
LP
Co-issuer |
Finance
Co-issuer |
Guarantor Subsidiaries
|
Non-
Guarantors |
Eliminations/Consolidations
|
Total
|
||||||||||||||||
|
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
195.3
|
|
$
|
1.6
|
|
$
|
—
|
|
$
|
196.9
|
|
|
Total operating expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
169.0
|
|
0.9
|
|
—
|
|
169.9
|
|
||||||||
|
Operating income
|
—
|
|
—
|
|
—
|
|
—
|
|
26.3
|
|
0.7
|
|
—
|
|
27.0
|
|
||||||||
|
Interest expense
|
—
|
|
—
|
|
(26.2
|
)
|
—
|
|
—
|
|
(0.7
|
)
|
4.1
|
|
(22.8
|
)
|
||||||||
|
Gain (loss) on marketable equity investment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
102.7
|
|
—
|
|
102.7
|
|
||||||||
|
Net (loss) income before income taxes
|
—
|
|
—
|
|
(26.2
|
)
|
—
|
|
26.3
|
|
102.7
|
|
4.1
|
|
106.9
|
|
||||||||
|
Income tax expense
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.0
|
)
|
—
|
|
—
|
|
(1.0
|
)
|
||||||||
|
Equity earnings (loss) related to investment in subsidiaries
|
101.8
|
|
1.0
|
|
128.0
|
|
—
|
|
—
|
|
—
|
|
(230.8
|
)
|
—
|
|
||||||||
|
Net income (loss)
|
101.8
|
|
1.0
|
|
101.8
|
|
—
|
|
25.3
|
|
102.7
|
|
(226.7
|
)
|
105.9
|
|
||||||||
|
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
|
Comprehensive income (loss)
|
$
|
101.8
|
|
$
|
1.0
|
|
$
|
101.8
|
|
$
|
—
|
|
$
|
25.3
|
|
$
|
102.7
|
|
$
|
(226.7
|
)
|
$
|
105.9
|
|
|
|
Six Months Ended June 30, 2019
|
|||||||||||||||||||||||
|
|
Parent
Guarantor |
General
Partner |
LP
Co-issuer |
Finance
Co-issuer |
Guarantor Subsidiaries
|
Non-
Guarantors |
Eliminations/ Consolidations
|
Total
|
||||||||||||||||
|
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
444.1
|
|
$
|
32.4
|
|
$
|
—
|
|
$
|
476.5
|
|
|
Total operating expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
395.4
|
|
49.6
|
|
—
|
|
445.0
|
|
||||||||
|
Operating income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
48.7
|
|
(17.2
|
)
|
—
|
|
31.5
|
|
||||||||
|
Interest expense
|
—
|
|
—
|
|
(62.9
|
)
|
—
|
|
—
|
|
(0.7
|
)
|
18.8
|
|
(44.8
|
)
|
||||||||
|
Gain (loss) on marketable equity investment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
92.7
|
|
—
|
|
92.7
|
|
||||||||
|
Other expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
||||||||
|
(Loss) income before income taxes
|
—
|
|
—
|
|
(62.9
|
)
|
—
|
|
48.7
|
|
74.7
|
|
18.8
|
|
79.3
|
|
||||||||
|
Income tax (expense) benefit
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.8
|
)
|
3.4
|
|
—
|
|
1.6
|
|
||||||||
|
Equity earnings (loss) related to investment in subsidiaries
|
59.4
|
|
0.6
|
|
122.3
|
|
—
|
|
—
|
|
—
|
|
(182.3
|
)
|
—
|
|
||||||||
|
Net income (loss)
|
59.4
|
|
0.6
|
|
59.4
|
|
—
|
|
46.9
|
|
78.1
|
|
(163.5
|
)
|
80.9
|
|
||||||||
|
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.7
|
)
|
—
|
|
(2.7
|
)
|
||||||||
|
Comprehensive income (loss)
|
$
|
59.4
|
|
$
|
0.6
|
|
$
|
59.4
|
|
$
|
—
|
|
$
|
46.9
|
|
$
|
75.4
|
|
$
|
(163.5
|
)
|
$
|
78.2
|
|
|
|
Six Months Ended June 30, 2018
|
|||||||||||||||||||||||
|
|
Parent
Guarantor |
General
Partner |
LP
Co-issuer |
Finance
Co-issuer |
Guarantor Subsidiaries
|
Non-
Guarantors |
Eliminations/Consolidations
|
Total
|
||||||||||||||||
|
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
390.2
|
|
$
|
3.3
|
|
$
|
—
|
|
$
|
393.5
|
|
|
Total operating expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
336.6
|
|
2.2
|
|
—
|
|
338.8
|
|
||||||||
|
Operating income
|
—
|
|
—
|
|
—
|
|
—
|
|
53.6
|
|
1.1
|
|
—
|
|
54.7
|
|
||||||||
|
Interest expense
|
—
|
|
—
|
|
(50.1
|
)
|
—
|
|
—
|
|
(1.4
|
)
|
7.9
|
|
(43.6
|
)
|
||||||||
|
Gain (loss) on marketable equity investment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
143.2
|
|
—
|
|
143.2
|
|
||||||||
|
Loss on early extinguishment of debt
|
—
|
|
—
|
|
(3.1
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(3.1
|
)
|
||||||||
|
Net (loss) income before income taxes
|
—
|
|
—
|
|
(53.2
|
)
|
—
|
|
53.6
|
|
142.9
|
|
7.9
|
|
151.2
|
|
||||||||
|
Income tax expense
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.8
|
)
|
—
|
|
—
|
|
(1.8
|
)
|
||||||||
|
Equity earnings (loss) related to investment in subsidiaries
|
141.6
|
|
1.4
|
|
194.8
|
|
—
|
|
—
|
|
—
|
|
(337.8
|
)
|
—
|
|
||||||||
|
Net income (loss)
|
141.6
|
|
1.4
|
|
141.6
|
|
—
|
|
51.8
|
|
142.9
|
|
(329.9
|
)
|
149.4
|
|
||||||||
|
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.1
|
|
—
|
|
0.1
|
|
||||||||
|
Comprehensive income (loss)
|
$
|
141.6
|
|
$
|
1.4
|
|
$
|
141.6
|
|
$
|
—
|
|
$
|
51.8
|
|
$
|
143.0
|
|
$
|
(329.9
|
)
|
$
|
149.5
|
|
|
|
Six Months Ended June 30, 2019
|
|||||||||||||||||||||||
|
|
Parent
Guarantor
|
General
Partner
|
LP
Co-issuer
|
Finance
Co-issuer
|
Guarantor Subsidiaries
|
Non-
Guarantors
|
Eliminations/Consolidations
|
Total
|
||||||||||||||||
|
Net cash (used in) provided by operating activities
|
$
|
—
|
|
$
|
—
|
|
$
|
(56.8
|
)
|
$
|
—
|
|
$
|
208.8
|
|
$
|
(3.3
|
)
|
$
|
18.8
|
|
$
|
167.5
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Investment in real estate
|
—
|
|
—
|
|
—
|
|
—
|
|
(401.3
|
)
|
(94.7
|
)
|
(18.8
|
)
|
(514.8
|
)
|
||||||||
|
Investment in subsidiaries
|
(252.6
|
)
|
(1.8
|
)
|
(67.9
|
)
|
—
|
|
—
|
|
—
|
|
322.3
|
|
—
|
|
||||||||
|
Equity investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.3
|
)
|
—
|
|
(0.3
|
)
|
||||||||
|
Proceeds from sale of equity investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
199.8
|
|
—
|
|
199.8
|
|
||||||||
|
Return of investment
|
101.3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(101.3
|
)
|
—
|
|
||||||||
|
Intercompany borrowings
|
8.8
|
|
—
|
|
(105.6
|
)
|
—
|
|
119.3
|
|
—
|
|
(22.5
|
)
|
—
|
|
||||||||
|
Net cash (used in) provided by investing activities
|
(142.5
|
)
|
(1.8
|
)
|
(173.5
|
)
|
—
|
|
(282.0
|
)
|
104.8
|
|
179.7
|
|
(315.3
|
)
|
||||||||
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Issuance of common stock, net
|
252.6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
252.6
|
|
||||||||
|
Dividends paid
|
(101.3
|
)
|
—
|
|
(101.3
|
)
|
—
|
|
—
|
|
—
|
|
101.3
|
|
(101.3
|
)
|
||||||||
|
Intercompany borrowings
|
—
|
|
—
|
|
(8.8
|
)
|
—
|
|
105.6
|
|
(119.3
|
)
|
22.5
|
|
—
|
|
||||||||
|
Proceeds from revolving credit facility
|
—
|
|
—
|
|
287.8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
287.8
|
|
||||||||
|
Repayments of unsecured term loan
|
—
|
|
—
|
|
(200.0
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(200.0
|
)
|
||||||||
|
Payments on finance lease liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.6
|
)
|
(0.6
|
)
|
—
|
|
(1.2
|
)
|
||||||||
|
Tax payment upon exercise of equity awards
|
(8.8
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8.8
|
)
|
||||||||
|
Contributions/distributions from parent
|
—
|
|
1.8
|
|
252.6
|
|
—
|
|
59.7
|
|
8.2
|
|
(322.3
|
)
|
—
|
|
||||||||
|
Net cash provided by (used in) financing activities
|
142.5
|
|
1.8
|
|
230.3
|
|
—
|
|
164.7
|
|
(111.7
|
)
|
(198.5
|
)
|
229.1
|
|
||||||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.3
|
)
|
—
|
|
(0.3
|
)
|
||||||||
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
—
|
|
—
|
|
—
|
|
—
|
|
91.5
|
|
(10.5
|
)
|
—
|
|
81.0
|
|
||||||||
|
Cash, cash equivalents and restricted cash at beginning of period
|
—
|
|
—
|
|
—
|
|
—
|
|
27.2
|
|
37.2
|
|
—
|
|
64.4
|
|
||||||||
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
118.7
|
|
$
|
26.7
|
|
$
|
—
|
|
$
|
145.4
|
|
|
|
Six Months Ended June 30, 2018
|
|||||||||||||||||||||||
|
|
Parent
Guarantor |
General
Partner |
LP
Co-issuer |
Finance
Co-issuer |
Guarantor Subsidiaries
|
Non-
Guarantors |
Eliminations/Consolidations
|
Total
|
||||||||||||||||
|
Net cash (used in) provided by operating activities
|
$
|
—
|
|
$
|
—
|
|
$
|
(46.0
|
)
|
$
|
—
|
|
$
|
185.5
|
|
$
|
1.1
|
|
$
|
7.9
|
|
$
|
148.5
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Investment in real estate
|
—
|
|
—
|
|
—
|
|
—
|
|
(313.5
|
)
|
(1.3
|
)
|
(7.9
|
)
|
(322.7
|
)
|
||||||||
|
Investment in subsidiaries
|
(152.2
|
)
|
(1.5
|
)
|
(154.1
|
)
|
—
|
|
—
|
|
—
|
|
307.8
|
|
—
|
|
||||||||
|
Return of investment
|
86.6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(86.6
|
)
|
—
|
|
||||||||
|
Intercompany borrowings
|
4.7
|
|
—
|
|
56.5
|
|
—
|
|
—
|
|
—
|
|
(61.2
|
)
|
—
|
|
||||||||
|
Net cash (used in) provided by investing activities
|
(60.9
|
)
|
(1.5
|
)
|
(97.6
|
)
|
—
|
|
(313.5
|
)
|
(1.3
|
)
|
152.1
|
|
(322.7
|
)
|
||||||||
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Issuance of common stock, net
|
152.2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
152.2
|
|
||||||||
|
Dividends paid
|
(86.6
|
)
|
—
|
|
(86.6
|
)
|
—
|
|
—
|
|
—
|
|
86.6
|
|
(86.6
|
)
|
||||||||
|
Intercompany borrowings
|
—
|
|
—
|
|
(4.7
|
)
|
—
|
|
(56.5
|
)
|
—
|
|
61.2
|
|
—
|
|
||||||||
|
Proceeds from unsecured term loan
|
—
|
|
—
|
|
985.4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
985.4
|
|
||||||||
|
Repayments of unsecured term loan
|
—
|
|
—
|
|
(902.7
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(902.7
|
)
|
||||||||
|
Payments on finance lease liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
(4.2
|
)
|
(0.9
|
)
|
—
|
|
(5.1
|
)
|
||||||||
|
Tax payment upon exercise of equity awards
|
(4.7
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(4.7
|
)
|
||||||||
|
Contributions/distributions from parent
|
—
|
|
1.5
|
|
152.2
|
|
—
|
|
152.2
|
|
1.9
|
|
(307.8
|
)
|
—
|
|
||||||||
|
Net cash provided by (used in) financing activities
|
60.9
|
|
1.5
|
|
143.6
|
|
—
|
|
91.5
|
|
1.0
|
|
(160.0
|
)
|
138.5
|
|
||||||||
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
—
|
|
—
|
|
—
|
|
—
|
|
(36.5
|
)
|
0.8
|
|
—
|
|
(35.7
|
)
|
||||||||
|
Cash, cash equivalents and restricted cash at beginning of period
|
—
|
|
—
|
|
—
|
|
—
|
|
151.2
|
|
0.7
|
|
—
|
|
151.9
|
|
||||||||
|
Cash, cash equivalents and restricted cash at end of period
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
114.7
|
|
$
|
1.5
|
|
$
|
—
|
|
$
|
116.2
|
|
|
IN MILLIONS, except share and per share data
|
|
|
|
|
|
|
||||||||||||||||
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||||
|
|
2019
|
2018
|
$ Change
|
% Change
|
2019
|
2018
|
$ Change
|
% Change
|
||||||||||||||
|
Lease revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Colocation (Minimum lease payments)
|
$
|
197.3
|
|
$
|
165.3
|
|
$
|
32.0
|
|
19
|
%
|
$
|
385.6
|
|
$
|
330.5
|
|
$
|
55.1
|
|
17
|
%
|
|
Metered power reimbursements (Variable lease payments)
|
31.7
|
|
24.8
|
|
6.9
|
|
28
|
%
|
60.3
|
|
46.4
|
|
13.9
|
|
30
|
%
|
||||||
|
Total lease revenue
|
229.0
|
|
190.1
|
|
38.9
|
|
20
|
%
|
445.9
|
|
376.9
|
|
69.0
|
|
18
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Revenue from contracts with customers
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Equipment sales and services
|
17.1
|
|
2.4
|
|
14.7
|
|
n/m
|
|
21.1
|
|
8.2
|
|
12.9
|
|
n/m
|
|
||||||
|
Other revenue
|
5.4
|
|
4.4
|
|
1.0
|
|
23
|
%
|
9.5
|
|
8.4
|
|
1.1
|
|
13
|
%
|
||||||
|
Total revenue from contracts with customers
|
22.5
|
|
6.8
|
|
15.7
|
|
n/m
|
|
30.6
|
|
16.6
|
|
14.0
|
|
84
|
%
|
||||||
|
Total Revenue
|
251.5
|
|
196.9
|
|
54.6
|
|
28
|
%
|
476.5
|
|
393.5
|
|
83.0
|
|
21
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property operating expenses
|
103.3
|
|
68.9
|
|
34.4
|
|
50
|
%
|
186.6
|
|
136.7
|
|
49.9
|
|
37
|
%
|
||||||
|
Sales and marketing
|
5.3
|
|
4.4
|
|
0.9
|
|
20
|
%
|
10.6
|
|
9.7
|
|
0.9
|
|
9
|
%
|
||||||
|
General and administrative
|
19.7
|
|
18.6
|
|
1.1
|
|
6
|
%
|
41.9
|
|
37.9
|
|
4.0
|
|
11
|
%
|
||||||
|
Depreciation and amortization
|
102.1
|
|
77.6
|
|
24.5
|
|
32
|
%
|
204.2
|
|
152.2
|
|
52.0
|
|
34
|
%
|
||||||
|
Transaction, acquisition, integration and other related expenses
|
1.4
|
|
0.4
|
|
1.0
|
|
n/m
|
|
1.7
|
|
2.3
|
|
(0.6
|
)
|
(26
|
)%
|
||||||
|
Total operating expenses
|
231.8
|
|
169.9
|
|
61.9
|
|
36
|
%
|
445.0
|
|
338.8
|
|
106.2
|
|
31
|
%
|
||||||
|
Operating income
|
19.7
|
|
27.0
|
|
(7.3
|
)
|
(27
|
)%
|
31.5
|
|
54.7
|
|
(23.2
|
)
|
(42
|
)%
|
||||||
|
Interest expense
|
(21.1
|
)
|
(22.8
|
)
|
(1.7
|
)
|
(7
|
)%
|
(44.8
|
)
|
(43.6
|
)
|
1.2
|
|
3
|
%
|
||||||
|
(Loss) gain on marketable equity investment
|
(8.5
|
)
|
102.7
|
|
(111.2
|
)
|
(108
|
)%
|
92.7
|
|
143.2
|
|
(50.5
|
)
|
(35
|
)%
|
||||||
|
Loss on early extinguishment of debt
|
—
|
|
—
|
|
—
|
|
—
|
%
|
—
|
|
(3.1
|
)
|
3.1
|
|
(100
|
)%
|
||||||
|
Other expense
|
—
|
|
—
|
|
—
|
|
—
|
%
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
n/m
|
|
||||||
|
Net income before income taxes
|
(9.9
|
)
|
106.9
|
|
(116.8
|
)
|
(109
|
)%
|
79.3
|
|
151.2
|
|
(71.9
|
)
|
(48
|
)%
|
||||||
|
Income tax expense
|
1.4
|
|
(1.0
|
)
|
2.4
|
|
(240
|
)%
|
1.6
|
|
(1.8
|
)
|
3.4
|
|
(189
|
)%
|
||||||
|
Net income
|
$
|
(8.5
|
)
|
$
|
105.9
|
|
$
|
(114.4
|
)
|
(108
|
)%
|
$
|
80.9
|
|
$
|
149.4
|
|
$
|
(68.5
|
)
|
(46
|
)%
|
|
Operating gross margin
|
7.8
|
%
|
13.7
|
%
|
|
(43
|
)%
|
6.6
|
%
|
13.9
|
%
|
|
(53
|
)%
|
||||||||
|
Capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Investment in real estate
|
$
|
211.3
|
|
$
|
175.2
|
|
$
|
36.1
|
|
21
|
%
|
$
|
510.5
|
|
$
|
318.0
|
|
$
|
192.5
|
|
61
|
%
|
|
Recurring maintenance capital
|
1.6
|
|
2.3
|
|
(0.7
|
)
|
(30
|
)%
|
4.3
|
|
4.7
|
|
(0.4
|
)
|
(9
|
)%
|
||||||
|
Total
|
$
|
212.9
|
|
$
|
177.5
|
|
$
|
35.4
|
|
20
|
%
|
$
|
514.8
|
|
$
|
322.7
|
|
$
|
192.1
|
|
60
|
%
|
|
Metrics information:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
CSF(1)
|
4,116,000
|
|
3,369,000
|
|
747,000
|
22
|
%
|
4,116,000
|
|
3,369,000
|
|
747,000
|
22
|
%
|
||||||||
|
Leased rate(2)
|
84
|
%
|
88
|
%
|
(4
|
)%
|
(5
|
)%
|
84
|
%
|
88
|
%
|
(4
|
)%
|
(5
|
)%
|
||||||
|
•
|
$30.2 million increase in colocation rent, primarily due to $38.6 million increase from existing and new customers, including an $11.2 million increase due to the acquisition of Zenium which closed in August 2018 and $2.1 million of higher termination fees, offset in part by $10.5 million of rent churn;
|
|
•
|
$6.9 million increase in metered power reimbursements primarily due to a $7.8 million increase from existing and new customers, including a $3.9 million increase due to the Zenium acquisition offset in part by $0.9 million of rent churn;
|
|
•
|
$1.8 million increase in interconnection revenue primarily due to expanding demand from existing and new customers;
|
|
•
|
$14.7 million increase in equipment sales and associated installation services to one significant customer during the three months ended June 30, 2019; and
|
|
•
|
$1.0 million increase in other revenue from managed services.
|
|
•
|
$6.6 million increase in property operating expenses as a result of the timing of the acquisition of Zenium which closed in August 2018;
|
|
•
|
$14.1 million increase in property operating expenses as a result of additional assets placed into service from development activities:
|
|
◦
|
$5.6 million increase in electricity due to increases in usage and rates
|
|
◦
|
$4.4 million increase in repairs and maintenance
|
|
◦
|
$3.7 million increase in contract and security services
|
|
◦
|
$0.4 million increase in other property operating expenses
|
|
•
|
$2.6 million increase in rent for leased property and equipment primarily due to a $4.0 million increase from the implementation of the new accounting standard for leases offset in part by a $1.4 million decrease from lease expirations in 2018;
|
|
•
|
$3.0 million decrease as a result of higher capitalized costs due to increasing construction and development; and
|
|
•
|
$14.1 million increase in equipment cost of sales.
|
|
•
|
$1.4 million increase in legal and professional expenses primarily due to expanding our business activities;
|
|
•
|
$1.3 million increase in personnel expense primarily due to the acquisition of Zenium in August 2018;
|
|
•
|
$0.3 million increase in other general and administration expenses;
|
|
•
|
$1.1 million decrease in stock compensation expense; and
|
|
•
|
$0.8 million decrease due to a reduction in professional fees associated with implementing new accounting standards.
|
|
•
|
$3.6 million decrease due to higher capitalized interest resulting from increased development activity;
|
|
•
|
$2.0 million decrease related to the cross-currency swap;
|
|
•
|
$1.9 million decrease due to finance leases that were derecognized under the new accounting standard for leases. See Note 3. "Recently Adopted Accounting Standards"; and
|
|
•
|
$0.4 million decrease related to higher interest income.
|
|
•
|
$52.4 million increase in colocation rent primarily due to a $72.4 million increase from existing and new customers, including a $21.8 million increase due to the acquisition of Zenium in August 2018, offset in part by $17.2 million of rent churn and $2.8 million of lower termination fees;
|
|
•
|
$13.9 million increase in metered power reimbursements primarily due to a $15.6 million increase from existing and new customers, including a $7.0 million increase due to the acquisition of Zenium in August 2018, offset in part by $1.7 million of rent churn;
|
|
•
|
$2.7 million increase in interconnection revenue;
|
|
•
|
$12.9 million increase in equipment sales and installation services to one significant customer; and
|
|
•
|
$1.1 million increase in other revenue from managed services.
|
|
•
|
$22.2 million increase in property operating expenses as a result of additional assets placed into service from development activities:
|
|
◦
|
$9.7 million increase in electricity primarily due to increases in usage and rates
|
|
◦
|
$7.2 million increase in repairs and maintenance
|
|
◦
|
$5.3 million increase in contract and security services
|
|
•
|
$12.4 million increase in equipment cost of sales;
|
|
•
|
$12.4 million increase in property operating expenses as a result of the acquisition of Zenium in August 2018;
|
|
•
|
$4.9 million increase in rent expense for leased property and equipment primarily due to a $8.0 million increase from the implementation of the new accounting standard for leases offset in part by a $3.1 million decrease from lease expirations in 2018;
|
|
•
|
$1.0 million increase in property taxes and other operating expense; and
|
|
•
|
$3.0 million decrease as a result of capitalized costs due to increasing construction and development.
|
|
•
|
$3.6 million increase in legal and professional expenses due to expanding our business activities;
|
|
•
|
$2.7 million increase in personnel expense primarily due to the acquisition of Zenium in August 2018;
|
|
•
|
$1.2 million decrease for employee-related costs including stock compensation and severance related costs;
|
|
•
|
$0.9 million decrease due to a reduction in professional fees associated with implementing new accounting standards; and
|
|
•
|
$0.2 million decrease in other general and administrative expense.
|
|
•
|
$7.8 million decrease due to higher capitalized interest resulting from increased development activity;
|
|
•
|
$3.6 million decrease due to finance leases that were derecognized under the new accounting standard for leases. See Note 3. "Recently Adopted Accounting Standards";
|
|
•
|
$2.3 million decrease related to the cross-currency swap; and
|
|
•
|
$0.2 million decrease related to higher interest income.
|
|
|
June 30, 2019
|
December 31, 2018
|
Difference
|
||||||
|
Total investment in real estate, net
|
$
|
4,499.6
|
|
$
|
4,293.0
|
|
$
|
206.6
|
|
|
Equity investments
|
91.9
|
|
198.1
|
|
(106.2
|
)
|
|||
|
Operating lease right-of-use ("ROU") assets, net
|
78.5
|
|
—
|
|
78.5
|
|
|||
|
$1.7 Billion Revolving Credit Facility
|
429.9
|
|
143.0
|
|
286.9
|
|
|||
|
Term Loans
|
1,100.0
|
|
1,300.0
|
|
(200.0
|
)
|
|||
|
Senior Notes
|
1,213.3
|
|
1,214.6
|
|
(1.3
|
)
|
|||
|
Finance lease liabilities
|
31.6
|
|
156.7
|
|
(125.1
|
)
|
|||
|
Operating lease liabilities
|
114.1
|
|
—
|
|
114.1
|
|
|||
|
Additional paid in capital
|
3,089.5
|
|
2,837.4
|
|
252.1
|
|
|||
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
||||||||||||||||
|
|
June 30,
|
Change
|
June 30,
|
Change
|
||||||||||||||||||
|
2019
|
2018
|
$
|
%
|
2019
|
2018
|
$
|
%
|
|||||||||||||||
|
Net (loss) income
|
$
|
(8.5
|
)
|
$
|
105.9
|
|
$
|
(114.4
|
)
|
(108
|
)%
|
$
|
80.9
|
|
$
|
149.4
|
|
$
|
(68.5
|
)
|
(46
|
)%
|
|
Real estate depreciation and amortization(1)
|
100.2
|
|
75.6
|
|
24.6
|
|
33
|
%
|
200.3
|
|
148.1
|
|
52.2
|
|
35
|
%
|
||||||
|
Funds from Operations ("FFO") - NAREIT defined
|
$
|
91.7
|
|
$
|
181.5
|
|
$
|
(89.8
|
)
|
(49
|
)%
|
$
|
281.2
|
|
$
|
297.5
|
|
$
|
(16.3
|
)
|
(5
|
)%
|
|
Loss on early extinguishment of debt
|
—
|
|
—
|
|
—
|
|
—
|
%
|
—
|
|
3.1
|
|
(3.1
|
)
|
(100
|
)%
|
||||||
|
Loss (gain) on marketable equity investment
|
8.5
|
|
(102.7
|
)
|
111.2
|
|
(108
|
)%
|
(92.7
|
)
|
(143.2
|
)
|
50.5
|
|
(35
|
)%
|
||||||
|
New accounting standards and regulatory compliance and the related system implementation costs
|
0.3
|
|
1.0
|
|
(0.7
|
)
|
(70
|
)%
|
0.6
|
|
1.5
|
|
(0.9
|
)
|
(60
|
)%
|
||||||
|
Amortization of tradenames(1)
|
0.1
|
|
0.4
|
|
(0.3
|
)
|
(75
|
)%
|
0.3
|
|
0.7
|
|
(0.4
|
)
|
(57
|
)%
|
||||||
|
Transaction, acquisition, integration and other related expenses(1)
|
1.4
|
|
0.4
|
|
1.0
|
|
n/m
|
|
1.7
|
|
2.3
|
|
(0.6
|
)
|
(26
|
)%
|
||||||
|
Severance and management transition costs
|
—
|
|
—
|
|
—
|
|
—
|
%
|
0.1
|
|
0.7
|
|
(0.6
|
)
|
(86
|
)%
|
||||||
|
Legal claim costs
|
0.1
|
|
0.1
|
|
—
|
|
n/m
|
|
0.2
|
|
0.3
|
|
(0.1
|
)
|
(33
|
)%
|
||||||
|
Normalized Funds from Operations ("Normalized FFO")
|
$
|
102.1
|
|
$
|
80.7
|
|
$
|
21.4
|
|
27
|
%
|
$
|
191.4
|
|
$
|
162.9
|
|
$
|
28.5
|
|
17
|
%
|
|
|
2.0%
|
|
1.5%
|
|
1.0%
|
|
0.5%
|
||||||
|
Variable rate credit facilities expense
|
$
|
(30.6
|
)
|
|
$
|
(22.9
|
)
|
|
(15.3
|
)
|
|
(7.6
|
)
|
|
|
|
|
|
|
|
CyrusOne Inc.
|
||
|
|
|
|
|
|
|
By:
|
|
/s/ Gary J. Wojtaszek
|
|
|
|
|
Gary J. Wojtaszek
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
|
/s/ Diane M. Morefield
|
|
|
|
|
Diane M. Morefield
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
By:
|
|
/s/ Mark E. Skomal
|
|
|
|
|
Mark E. Skomal
|
|
|
|
|
Senior Vice President and Chief Accounting Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of CyrusOne Inc. (“registrant”);
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date: August 1, 2019
|
/s/ Gary J. Wojtaszek
|
|
|
Gary J. Wojtaszek
|
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of CyrusOne Inc. (“registrant”);
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date: August 1, 2019
|
/s/ Diane M. Morefield
|
|
|
Diane M. Morefield
|
|
|
Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Gary J. Wojtaszek
|
|
Gary J. Wojtaszek
|
|
President and Chief Executive Officer
|
|
August 1, 2019
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Diane M. Morefield
|
|
Diane M. Morefield
|
|
Chief Financial Officer
|
|
August 1, 2019
|