1. Telecommunications | Data Center Services
February 18, 2015
CYRUSONE, INC.
CONE | $30.16
BUY | TARGET PRICE: $35.00
Earnings Report
Jonathan Schildkraut
212 497 0864
jonathan.schildkraut@evercoreisi.com
Robert Gutman
212 497 0877
robert.gutman@evercoreisi.com
Company Statistics
52-Week Range: $19.52 - $29.40
Market Capitalization (M): $1,979
Enterprise Value (M): $2,669
Shares Outstanding (M): 66
Average 10-Day Volume (000s): 324
Dividend Yield: 4.2%
Fiscal Year End Dec
Earnings Summary
2013A 2014A 2015E
EV/EBITDA 19.2x 15.8x 14.0x
P/FFO/shr 24.8x 17.4x 15.5x
P/AFFO/shr 26.9x 17.8x 15.9x
Revenue (M) 1Q $60.1 $77.5 $87.8
2Q $63.6 $81.7 $91.7
3Q $67.5 $84.8 $87.8
4Q $72.3 $86.9 $100.2
FY $263.5 $330.9 $375.9
EBITDA (M) 1Q $31.5 $41.7 $44.4
2Q $30.8 $40.8 $46.3
3Q $36.5 $42.2 $44.4
4Q $39.9 $44.6 $50.8
FY $138.7 $169.3 $190.4
FFO/shr 1Q $0.27 $0.42 $0.45
2Q $0.25 $0.39 $0.47
3Q $0.34 $0.44 $0.45
4Q $0.37 $0.48 $0.53
FY $1.22 $1.73 $1.95
1 Year Price History
CyrusOne, Inc. vs. S&P 500 (SP50)
CONE S&P 500 (SP50)
02/14 05/14 08/14 11/14 02/15
32
30
28
26
24
22
20
18
2,300
2,200
2,100
2,000
1,900
1,800
1,700
Source: FactSet
Solid Print, Remains Undervalued
CONE reported a very strong quarter with revs, EBITDA, FFO and
AFFO ahead by 1.5%, 5.3%, 17.1% and 10.1% respectively – while also
reporting an increase in development yields to 18% (from 17% in 3Q).
For the full year they delivered revs, EBITDA, FFO and AFFO growth of
25.6%, 22.1%, 42.2% and 51.3% respectively. FY15 guidance implies
(at the mid pt), rev growth of 14.0%, EBITDA growth of 12.4% (margin
of 50.3%), and FFO p/shr growth of 12.7%. The qrtrly dividend was
increased by 50%, to $0.315 p/shr to align with a 60-70% AFFO payout
ratio in 2015. Net/net CONE continues to execute well, deliver above
market growth, and achieve industry leading development yields - yet
trades at a meaningful discount to its peers. Maintain BUY, increasing
PT to $35 (from $33).
■ Strong Print. CONE reported 4Q14 revs of $86.9MM (+2.5% Q/Q,
+20.2% Y/Y), vs. our/cons. $85.6MM / $85.7MM, EBITDA of $44.6MM
(+5.7% Q/Q, +11.8% Y/Y), vs. our/cons. $42.4MM / $42.9MM, diluted
FFO per share of $0.48 (+8.1% Q/Q, +30.9% Y/Y), vs. our/cons.
$0.41 / $0.42, and diluted AFFO per share of $0.46 (+2.4% Q/Q,
+41.8% Y/Y), vs. our/cons. $0.41 / $0.38
■ Solid 4Q Leasing, FY14 +33.3% Y/Y. In 4Q, CONE leased 44K CSF,
inline with recent quarters and capping off FY14 leasing of 236K
CSF, +33.3% Y/Y. The largest proportion of leasing occurred in Dallas
(roughly 24K CSF), while the new Phoenix facility launched with 6.5K
CSF in addition to the 30K CSF pre-leased, roughly 7.0K CSF was
scattered throughout the existing footprint, and we estimate 6.5K CSF
were leased at the NoVA facility launched in 1Q. Of the $11.4MM of
annualized GAAP lease revenue signed in 4Q, $3.7MM commenced
within the quarter while $7.6MM is expected to commence in 1Q15.
■ Dispelled Fear of Energy Sector Overhang. As the price of crude oil
plummeted in 4Q, investors raised concerns regarding CONE’s high
exposure to the energy sector (and Texas). In the 4Q presentation,
we believe mgmt provided data largely dispelling these concerns.
■ Development +54.1% Y/Y, Expansion Increasing. CONE delivered
185K gross CSF of space in 2014, with the delivery of 37K CSF in
Phoenix in 4Q. This compares to 120K CSF delivered in 2013, an
increase of 54.1%. Looking to 2015, the company has 212K CSF
under construction with the expectation of bringing 275-325K CSF
online by year-end, bringing the total to roughly 1.5MM CSF.
■ FY15 Guide. Mgmt provided FY15 guidance which implies (at the
midpoint), revenue growth of 14.0%, EBITDA growth of 12.4%
(margin of 50.3%), and FFO per share growth of 12.7%. Factored into
expectations are (1) front-end loaded, elevated churn, (2) the negative
impact on margins due to the rapid growth in metered power and cost
of opening new facilities, (3) elevated stock-based compensation.
■ Maintain BUY, PT to $35 (from $33). Our DCF-based PT implies P/
FFO multiples of 14.6x 16E and 12.5x 17E vs. current multiples of
15.5x 15E and 12.6x 16E. On a P/AFFO basis, our PT implies 15.4x
16E and 13.0x 17E vs. current multiples of 15.9x 15E and 13.2x 16E.
Please see the analyst certification and important disclosures on page 10 of this report. Evercore ISI and affiliates do and seek to do business
with companies covered in its research reports. Investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

2. Solid Print, Remains Undervalued
CONE reported a very strong quarter with revs, EBITDA, FFO and AFFO ahead by 1.5%,
5.3%, 17.1% and 10.1% respectively – while also reporting an increase in development yields
to 18% (from 17% in 3Q). For the full year they delivered revs, EBITDA, FFO and AFFO
growth of 25.6%, 22.1%, 42.2% and 51.3% respectively. FY15 guidance implies (at the
midpoint), revenue growth of 14.0%, EBITDA growth of 12.4% (margin of 50.3%), and FFO
per share growth of 12.7%. The quarterly dividend was increased by 50%, to $0.315 per
share to align with a 60-70% AFFO payout ratio in 2015. Net/net CONE continues to execute
well, deliver above market growth, and achieve industry leading development yields - yet
trades at a meaningful discount to its peers. Maintain BUY, increasing PT to $35 (from $33).
Strong Print
Figure 1. Comparison of Actual Results to Estimates and Prior Period Historicals
Source: Company data, Evercore ISI Research
 Strong Print. In 4Q, revenue was aided by higher metered power (13.2% of total vs.
8.7% in 4Q13), while margins benefitted from seasonally lower electricity costs. The
FFO/AFFO beat was driven by higher margins and lower interest expense in the quarter.
Lastly, the company increased the quarterly dividend by 50% - in order to be inline with
the targeted 60-70% AFFO payout ratio (2015).
 Solid 4Q Leasing, FY14 +33.3% Y/Y. In 4Q, CONE leased 44K CSF, inline with recent
quarters and capping off FY14 leasing of 236K CSF, +33.3% Y/Y. The largest proportion
of leasing occurred in Dallas (roughly 24K CSF), while the new Phoenix facility launched
with 6.5K CSF in addition to the 30K CSF pre-leased, roughly 7.0K CSF was scattered
throughout the existing footprint, and we estimate 6.5K CSF were leased at the NoVA
facility launched in 1Q. This would bring the facility to 61% leased (from 40% pre-leased)
– though mgmt will provide actual numbers in the 1Q print. Of the $11.4MM of annualized
GAAP lease revenue signed in 4Q, $3.7MM commenced within the quarter while $7.6MM
is expected to commence in 1Q15.
- Backlog Unchanged. Commencement backlog was unchanged Q/Q at $9.2MM of
annualized GAAP revenue – with 99% expected to commence by 1Q15.
Figure 2. Leasing Trend
Source: Company data, Evercore ISI Research
4Q14
($ in M M s except per share data) Actual Estimate Difference Result Q/Q Result Y/Y
Revenue (MM) $86.9 $85.6 1.5% $84.8 2.5% $72.3 20.2%
EBITDA (MM) $44.6 $42.4 5.3% $42.2 5.7% $39.9 11.8%
EBITDA Margin 51.3% 49.5% 49.8% 55.2%
Incremental EBITDA Margin 51.3% 20.0% 54.0% 70.8%
FFO (MM) $31.2 $26.6 17.2% $28.9 8.0% $23.6 32.2%
Diluted FFO per share $0.48 $0.41 17.1% $0.44 7.9% $0.37 30.8%
AFFO (MM) $29.8 $27.0 10.2% $29.1 2.4% $20.8 43.3%
Diluted AFFO per share $0.46 $0.41 10.1% $0.45 2.3% $0.32 41.7%
3Q14 4Q13
(CSF SFT 000s) 2013A 1Q14A 2Q14A 3Q14A 4Q14A 2014A
CSF Leases Signed 177.0 100.0 59.0 33.0 44.0 236.0
Q/Q% 112.8% (41.0%) (44.1%) 33.3%
Y/Y% 60.9% 222.6% 59.5% (46.8%) (6.4%) 33.3%
February 18, 2015
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3.  Now Breaking Out Metered Power. Given the high growth in metered power sales
(driven by large deals) in 2014, and the pass through nature of this revenue (i.e. it lowers
EBITDA margin), mgmt has broken out metered power from base rent going back to
4Q13. Metered power represented 8.7% of total revenue in 2013 and has climbed
consistently to 13.2% in 4Q14 (12.3% for FY14). On a run rate analysis, CONE added
$15.6MM of metered power revenue in 2014, over the 3Q annualized run rate which will
cause a drag on margins in 2015. The 2015 forecast calls for much lower growth in
metered power (and less drag on margins going forward) as the company does not
anticipate the same pace of large deals.
Figure 3. Metered Power Growth
Source: Company data, Evercore ISI Research
- Building in Escalators. In 4Q, over 72% of new contracts had escalators with a
weighted average of 2.7% Mgmt estimates over 30% of the contracts now have
annual price escalators built in - vs. zero only two years ago.
- Growth Coming From Embedded Base, and Fortune 1000 Logos. In 4Q, 81% of
MRR signed came from the embedded base of customers vs. the TTM average of
55%. In addition, CONE added three new Fortune 1000 logos in 4Q, bringing the
total to 144 (vs. 129 4Q13), and total customer count to 669 (vs. 612 4Q13).
- New Leases Taking IX Services. Mgmt estimates 80% of new leases continue to
include National IX services – which boost average monthly rent by roughly 30%.
Multisite deployments generate over 60% of revenue (vs. 50% in 2012), which we
estimate comes from roughly 20% of the customer base. We believe that
connectivity and services provided by the National IX are accelerating these trends
by enabling fully outsourced solutions to enterprises which replicate their existing
multisite infrastructure.
 Renewals and Churn Inline, But 3% Churn Expected in 1Q. CONE renewed $20MM
of annual revenue, with $/kW down 1.0% on a cash basis, consistent with prior quarters.
We view positively given CONE already high yield /sft. Churn declined Q/Q to 1.7% (3Q:
2.9%), though is expected to increase to 3.0% in 1Q15 due to contract terminations and
renegotiations the occurred in 4Q14.
 Development +54.1% Y/Y, Expansion Increasing. CONE delivered 185K gross CSF of
space in 2014, with the delivery of 37K CSF in Phoenix in 4Q. This compares to 120K
CSF delivered in 2013, an increase of 54.1%. Looking to 2015, the company has 212K
CSF under construction with the expectation of bringing 275-325K CSF online by
yearend, bringing the total to roughly 1.5MM CSF. In addition, the company anticipates
the purchase or construction of 300-400K sft of powered shell for future development,
and expects to close on the purchase of 175K sft shell in Austin near-term. Mgmt sees
the opportunity to reach 2.0MM CSF at roughly $5MM per MW with existing undeveloped
powered shell space. Longer-term, including all land yet to be developed, this figure
would increase to $5.1MM CSF (at roughly $6-7MM per MW).
$MMs
4Q13 Metered Power Rev $6.3
Annualized 25.2
FY14 Reported 40.8
Incremental $15.6
4Q14 Metered Power Rev $11.5
Annualized 46.0
FY15 Guide (Midpoint) 50.5
Incremental MP Rev $4.5
February 18, 2015
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4. - Development Yields Increasing. In 4Q 14, CONE achieved development yield of
18%, an increase from 17% in 3Q14. Since 1Q13 the company has invested roughly
$400MM while maintaining yields of 16-19%. Notably, the calculation includes
unstabilized properties – excluding which yields would be >20%. In addition, mgmt
sees the opportunity to improve on these figures over time driven by leveraging fixed
costs across the portfolio.
 Dispelled Fear of Energy Sector Overhang. As the price of crude oil plummeted in 4Q,
investors raised concern regarding CONE’s high exposure to the energy sector (and
Texas). In the 4Q presentation, we believe mgmt provided data largely dispelling these
concerns as (1) as U.S. GDP growth turned negative 2008-2010 (and oil traded at $30),
the data center services still grew at an 18-20% pace, (2) data center service costs
represent a tiny fraction of operating expenses for CONE’s top 10 Oil & Gas customers
(roughly 0.006%), (3) growth from the energy vertical remains consistent contributing
$125-135K of new MRR per quarter, (4) revenue base has become increasing diversified
with energy representing 28% of ABR vs. 37% two years ago, and (5) the Texas
economy remains strong as oil taxes are 4-6% of the tax base vs. 13% in the 1980’s –
while the state is the headquarters for over 25 non-Oil & Gas Fortune 500 companies.
FY15 Guidance
Mgmt provided FY15 guidance which implies (at the midpoint), revenue growth of 14.0%,
EBITDA growth of 12.4% (margin of 50.3%), and FFO per share growth of 12.7%. Factored
into expectations are (1) front-end loaded, elevated churn, (2) the negative impact on margins
due to the rapid growth in metered power and cost of opening new facilities, (3) elevated
stock-based compensation.
 3% Churn in 1Q. Mgmt estimates 3% churn in 1Q due to the terminations or
renegotiation of leases in 4Q by three customers. At 3% of annualized base rent, we
estimate the full cost of the 1Q churn to be $9.0 MM (3% of 4Q14 annualized base rent).
We would consider half of this amount as extraordinary – above the 1-2% ordinary churn
– though a real cost in 2015.
 EBITDA Margin ~50%. EBITDA margin is expected to decline to roughly 50% in FY15,
from 51.2% in FY14 due to (1) the dilutive effect of increased (pass through) metered
revenue, and (2) expansion drag from the opening of new facilities.
 FFO to Reflect Stock Based Compensation. Stock based compensation is expected to
peak in 2015 due to the vesting period of grants associated with the company’s IPO.
Stock based comp is expected to be $3MM higher Y/Y – and then decline thereafter.
Figure 4. FY15 Guidance
Source: Company data, Evercore ISI Research
Guidance Prior
$MMs FY15 Midpoint 2014A Y/Y% EVR Consensus
Base Revenue $322-332 $327.0 $290.0 12.8%
Metered Power Reimb. $48-53 $50.5 $41.0 23.2%
Total Revenue $370-385 $377.5 $331.0 14.0% $378.2 $380.3
Adjusted EBITDA $185-195 $190.0 $169.0 12.4% $194.6 $194.6
Margin % 50.3% 51.5% 51.2%
Norm. FFO per share $1.90-2.00 $1.95 $1.73 12.7% $2.03 $1.98
Capital Expenditures $215-240 $227.5 $284.0 (19.9%) $231.8 $220.2
February 18, 2015
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5. Change in Estimates
Figure 5. Change in Estimates
Source: Company data, Evercore ISI Research
Valuation
 Maintain BUY, PT to $35 (from $33). Given above market growth, increasing yields and
low-cost expansion opportunities we are increasing our YE15 PT to $35 from $33.Our
DCF-based PT implies EV/EBITDA multiples of 14.1x 16E and 12.3x 17E, vs. current
multiples of 14.0x 15E and 12.1x 16E. On a P/FFO basis, our PT implies 14.6x 16E and
12.5x 17E vs. current multiples of 15.5x 15E and 12.6x 16E. On a P/AFFO basis, our PT
implies 15.4x 16E and 13.0x 17E vs. current multiples of 15.9x 15E and 13.2x 16E.
 Risks: (1) We believe the market for wholesale colocation space is becoming
increasingly competitive; (2) CONE is exposed to supply and demand dislocations in
markets; (3) CBB owns 43.7% of the company’s combined shares and operating units.
1Q15 2015 2016
($ in M M s except per share data) Current Prior Change Current Prior Change Current Prior Change
Revenue (MM) $87.8 $89.1 (1.5%) $375.9 $378.2 (0.6%) $432.7 $431.8 0.2%
EBITDA (MM) $44.4 $44.8 (0.8%) $190.4 $194.6 (2.2%) $221.3 $224.8 (1.6%)
EBITDA Margin 50.6% 50.3% 50.6% 51.4% 51.1% 52.1%
Incremental EBITDA Margin (175.0%) 50.0% 46.8% 56.7% 54.5% 56.4%
FFO (MM) $29.2 $29.3 (0.6%) $127.3 $132.6 (4.0%) $156.0 $159.7 (2.3%)
Diluted FFO per share $0.45 $0.45 (0.6%) $1.95 $2.03 (4.1%) $2.39 $2.45 (2.4%)
AFFO (MM) $28.4 $30.5 (6.9%) $124.2 $137.4 (9.6%) $148.8 $164.2 (9.4%)
Diluted AFFO per share $0.43 $0.47 (7.0%) $1.90 $2.11 (9.7%) $2.28 $2.52 (9.4%)
February 18, 2015
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6. Model
Figure 6. CyrusOne – Income Statement
Source: Company data, Evercore ISI Research
Full Full 2015 Full Full Full Full Full
($ in millions) Year Year Q1E Q2E Q3E Q4E Year Year Year Year Year
FY - December 2013A 2014A Mar-15 Jun-15 Sep-15 Dec-15 2015E 2016E 2017E 2018E 2019E
Base Revenue $290.1 $78.6 $80.2 $83.9 $86.9 $329.6 $379.4 $427.5 $477.1 $526.6
Metered Power Reimbursements 40.8 9.2 11.6 12.4 13.3 46.4 53.3 60.1 67.0 73.9
TOTAL REVENUE $263.5 $330.9 $87.8 $91.7 $96.3 $100.2 $375.9 $432.7 $487.5 $544.1 $600.6
Growth Q/Q 1.0% 4.5% 5.0% 4.0%
Growth Y/Y 19.3% 25.6% 13.3% 12.3% 13.6% 15.3% 13.6% 15.1% 12.7% 11.6% 10.4%
OPERATING EXPENSES
Rental Property Operating & Maintenance 93.2 124.5 33.7 35.3 36.8 38.3 144.1 164.2 180.6 196.1 213.2
Sales and Marketing 10.6 12.8 2.7 2.9 3.0 3.1 11.7 13.3 14.7 15.9 17.3
G&A 21.7 24.3 6.9 7.3 7.6 7.9 29.7 33.8 37.2 40.4 43.9
Other (0.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
TOTAL OPERATING EXPENSES 124.8 161.6 43.3 45.5 47.4 49.3 185.6 211.4 232.5 252.4 274.5
EBITDA $138.7 $169.3 $44.4 $46.3 $48.9 $50.8 $190.4 $221.3 $255.1 $291.7 $326.1
EBITDA Margin 52.6% 51.2% 50.6% 50.4% 50.8% 50.7% 50.6% 51.1% 52.3% 53.6% 54.3%
Incremental EBITDA Margin 75.6% 45.4% (175.0%) 10.0% 25.0% 10.0% 46.8% 54.5% 61.5% 64.7% 60.9%
Depreciation & Amortization 95.2 118.0 31.0 31.0 31.1 31.1 124.2 125.6 127.5 129.0 125.8
Stock-based Comp 6.3 10.3 3.3 3.3 3.3 3.3 13.3 9.6 10.1 10.6 11.1
Other 25.6 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBIT 11.6 40.0 10.1 11.9 14.5 16.3 52.8 86.1 117.5 152.0 189.2
Interest Income 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Interest Expense 43.7 39.5 10.3 10.5 10.9 11.4 43.0 48.7 54.7 60.9 66.7
Tax Expense 2.3 1.4 0.3 0.3 0.3 0.3 1.2 1.2 1.2 1.2 1.2
Other 1.4 13.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net Income / (Loss) (35.8) (14.5) (0.4) 1.1 3.2 4.7 8.6 36.2 61.6 89.9 121.3
Minority Interest 10.3 6.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
NET INCOME (25.5) (7.8) (0.4) 1.1 3.2 4.7 8.6 36.2 61.6 89.9 121.3
Adjustments 19.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
RECURRING NET INCOME (6.0) (7.8) (0.4) 1.1 3.2 4.7 8.6 36.2 61.6 89.9 121.3
Average Shares Outstanding - Basic 20.9 30.4 38.7 38.8 38.9 39.0 38.9 39.3 39.7 40.1 40.5
Average Shares Outstanding - Diluted 20.9 30.4 38.7 38.8 38.9 39.0 38.9 39.3 39.7 40.1 40.5
EPS - Basic ($0.29) ($0.26) ($0.01) $0.03 $0.08 $0.12 $0.22 $0.92 $1.55 $2.24 $3.00
EPS - Diluted ($0.29) ($0.26) ($0.01) $0.03 $0.08 $0.12 $0.22 $0.92 $1.55 $2.24 $3.00
DIVIDENDS $0.64 $0.95 $0.32 $0.32 $0.32 $0.32 $1.26 $1.37 $1.61 $1.88 $2.13
As a % of AFFO 57.1% 55.7% 72.5% 68.6% 64.0% 61.1% 66.3% 60.0% 60.0% 60.0% 60.0%
EOP Shares & Units 64.6 65.2 65.3 65.3 65.3 65.3 65.3 65.3 65.3 65.3 65.3
February 18, 2015
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7. Figure 7. CyrusOne – FFO / AFFO Analysis
Source: Company data, Evercore ISI Research
Full Full 2015 Full Full Full Full Full
($ in millions) Year Year Q1E Q2E Q3E Q4E 0 Year Year Year Year Year
FY - December 2013A 2014A Mar-15 Jun-15 Sep-15 Dec-15 2015E 2016E 2017E 2018E 2019E
Funds From Operations (FFO)
Net Income (35.8) (14.5) (0.4) 1.1 3.2 4.7 8.6 36.2 61.6 89.9 121.3
Noncontrolling Interests 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other (Transaction Costs) 23.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Income (Loss) From Continuing Operations (12.3) (14.5) (0.4) 1.1 3.2 4.7 8.6 36.2 61.6 89.9 121.3
Real Estate D&A 70.6 95.9 25.4 25.5 25.5 25.5 101.9 103.0 104.5 105.9 103.2
Customer Relationship Amort. 16.8 16.9 4.2 4.2 4.2 4.2 16.8 16.8 16.8 16.8 16.8
Other 3.6 14.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
FFO Avail. to Common Stock and Unitholders 78.7 112.9 29.2 30.8 32.9 34.4 127.3 156.0 183.0 212.6 241.3
Adjusted Funds From Operations (AFFO) 22.5%
Amortization of Deferred Financing 4.1 3.4 0.7 0.7 0.7 0.7 2.8 2.8 2.8 2.8 2.8
Non-Cash Compensation 6.3 10.3 3.3 3.3 3.3 3.3 13.3 9.6 10.1 10.6 11.1
Non RE D&A 7.8 5.2 1.4 1.4 1.4 1.4 5.5 5.8 6.1 6.4 5.8
Deferred Rev and Straight Line Adjustment (13.9) (10.5) (2.3) (2.3) (2.3) (2.3) (9.2) (9.2) (9.2) (9.2) (9.2)
Leasing Commissions (6.8) (5.8) (2.9) (2.9) (2.9) (2.9) (11.6) (11.6) (11.6) (11.6) (11.6)
Recurring CAPEX (4.2) (5.0) (1.0) (1.0) (1.0) (1.0) (4.0) (4.8) (5.8) (6.9) (8.3)
Corp. Income Tax (Benefit) 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
AFFO Avail. to Common Stock and Unit Holders 72.4 110.5 28.4 30.0 32.2 33.7 124.2 148.8 175.4 204.6 231.9
Diluted FFO per Share $1.22 $1.73 $0.45 $0.47 $0.50 $0.53 $1.95 $2.39 $2.80 $3.26 $3.69
Growth Q/Q (6.5%) 5.4% 7.1% 4.5%
Growth Y/Y 16.6% 42.2% 6.8% 19.8% 13.9% 10.3% 12.5% 22.5% 17.3% 16.2% 13.5%
Diluted AFFO per Share $1.12 $1.70 $0.43 $0.46 $0.49 $0.52 $1.90 $2.28 $2.69 $3.13 $3.55
Growth Q/Q (4.8%) 5.6% 7.3% 4.6%
Growth Y/Y 35.8% 51.3% 2.7% 18.1% 10.4% 12.9% 12.2% 19.9% 17.9% 16.7% 13.3%
Wgtd Avg Shares Common + Units+ Exch Dilution 64.6 65.2 65.3 65.3 65.3 65.3 65.3 65.3 65.3 65.3 65.3
February 18, 2015
7

8. Figure 8. CyrusOne – Balance Sheet
Source: Company data, Evercore Group L.L.C. Research
Full Full 2015 Full Full Full Full Full
($ in millions) Year Year Q1E Q2E Q3E Q4E Year Year Year Year Year
FY - December 2013A 2014A Mar-15 Jun-15 Sep-15 Dec-15 2015E 2016E 2017E 2018E 2019E
ASSETS
Gross PP&E 1,120.5 1,378.4 1,428.9 1,479.4 1,529.9 1,580.4 1,580.4 1,795.0 2,014.6 2,220.1 2,422.1
Accumulated D&A (236.7) (327.0) (358.0) (389.0) (420.1) (451.2) (451.2) (576.8) (704.3) (833.3) (959.1)
Net PP&E 883.8 1,051.4 1,070.9 1,090.4 1,109.8 1,129.1 1,129.1 1,218.2 1,310.3 1,386.8 1,463.1
Cash and Cash Equivalents 148.8 36.5 4.5 15.4 28.5 42.8 42.8 17.8 21.8 49.8 90.4
Restricted Cash 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Rent and Other Receivables 41.2 60.9 65.3 68.3 71.7 74.6 74.6 89.3 106.1 124.2 143.4
Goodwill 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2
Intangible Assets, net 85.9 68.9 68.9 68.9 68.9 68.9 68.9 68.9 68.9 68.9 68.9
Related Party Notes Receivable 0.6 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8
Other Assets 70.3 91.8 91.8 91.8 91.8 91.8 91.8 91.8 91.8 91.8 91.8
TOTAL ASSETS 1,506.8 1,586.5 1,578.5 1,611.7 1,647.6 1,684.2 1,684.2 1,762.9 1,875.9 1,998.4 2,134.6
LIABILITIES & STOCKHOLDER'S EQUITY
Total Debt 598.0 726.6 726.6 776.6 826.6 876.6 876.6 1,001.6 1,151.6 1,301.6 1,451.6
Accounts Payable, Other Accrued 66.8 69.9 82.9 85.6 88.8 91.3 91.3 98.1 104.7 110.0 114.1
Deferred Revenue 55.9 65.7 65.7 65.7 65.7 65.7 65.7 65.7 65.7 65.7 65.7
Other Liabilities 8.5 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3
TOTAL LIABILITIES 729.2 869.5 882.5 935.2 988.4 1,040.9 1,040.9 1,172.7 1,329.3 1,484.6 1,638.7
Shareholders' Equity 777.6 717.0 696.0 676.5 659.2 643.3 643.3 590.3 546.7 513.8 496.0
TOTAL LIAB. & STOCKHOLDER'S EQUITY 1,506.8 1,586.5 1,578.5 1,611.7 1,647.6 1,684.2 1,684.2 1,762.9 1,875.9 1,998.4 2,134.6
Variance 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
LEVERAGE RATIOS
Debt / Book Capitalization 43.5% 50.3% 51.1% 53.4% 55.6% 57.7% 57.7% 62.9% 67.8% 71.7% 74.5%
Net Debt / Book Capitalization 32.7% 47.8% 50.8% 52.4% 53.7% 54.9% 54.9% 61.8% 66.5% 69.0% 69.9%
Debt / Adj. EBITDA 4.3x 4.3x 4.1x 4.2x 4.2x 4.3x 4.6x 4.5x 4.5x 4.5x 4.5x
Net Debt / LQA Adj. EBITDA 3.2x 4.1x 4.1x 4.1x 4.1x 4.1x 4.4x 4.4x 4.4x 4.3x 4.2x
Adj. EBITDA / Interest Expense 3.2x 4.3x 4.3x 4.4x 4.5x 4.5x 4.4x 4.5x 4.7x 4.8x 4.9x
February 18, 2015
8

9. Figure 9. CyrusOne – Cash Flow
Source: Company data, Evercore Group L.L.C. Research
Full Full 2015 Full Full Full Full Full
($ in millions) Year Year Q1E Q2E Q3E Q4E Year Year Year Year Year
FY - December 2013A 2014A Mar-15 Jun-15 Sep-15 Dec-15 2015E 2016E 2017E 2018E 2019E
CASH FLOW FROM OPERATIONS
Net Income (25.5) (14.5) (0.4) 1.1 3.2 4.7 8.6 36.2 61.6 89.9 121.3
Add-back of Non-Cash Expenses
Depreciation & Amortization 95.2 118.0 31.0 31.0 31.1 31.1 124.2 125.6 127.5 129.0 125.8
Other 0.0 17.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Funds Flow From Operations 69.7 131.6 30.5 32.1 34.3 35.8 132.9 161.8 189.1 219.0 247.1
Change in Net Working Capital 9.7 (20.5) 8.6 (0.2) (0.2) (0.4) 7.7 (7.9) (10.2) (12.7) (15.2)
Cash Flow From Operations 79.4 111.1 39.1 31.9 34.1 35.4 140.5 153.9 178.9 206.2 231.8
CASH FLOW FROM INVESTMENTS
CAPEX (180.6) (284.2) (50.5) (50.5) (50.5) (50.5) (202.0) (214.6) (219.6) (205.5) (202.0)
CAPEX - acq of real estate (48.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Advances to affiliates 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other, net 6.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Cash Flow From Investing Activities (222.5) (284.2) (50.5) (50.5) (50.5) (50.5) (202.0) (214.6) (219.6) (205.5) (202.0)
FREE CASH FLOW (143.1) (173.1) (11.4) (18.6) (16.4) (15.1) (61.4) (60.7) (40.8) 0.7 29.8
CASH FLOW FROM FINANCING
Change in Debt & Capital Lease Obligations (15.5) 132.8 0.0 50.0 50.0 50.0 150.0 125.0 150.0 150.0 150.0
Issuance of Equity Securities 333.9 355.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Payment of Dividends (31.0) (50.9) (20.6) (20.6) (20.6) (20.6) (82.3) (89.3) (105.3) (122.8) (139.1)
Other, net (12.0) (376.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Cash Flow From Financing 275.4 61.0 (20.6) 29.4 29.4 29.4 67.7 35.7 44.7 27.2 10.9
Change in Cash and Equivalents 132.3 (112.1) (32.0) 10.8 13.1 14.3 6.3 (25.0) 4.0 27.9 40.7
Beginning Cash and Equivalents 16.5 148.8 36.5 4.5 15.4 28.5 36.5 42.8 17.8 21.8 49.8
ENDING CASH AND EQUIVALENTS 148.8 36.5 4.5 15.4 28.5 42.8 42.8 17.8 21.8 49.8 90.4
148.8 36.5 4.5 15.4 28.5 42.8 42.8 17.8 21.8 49.8 90.4
February 18, 2015
9

10. COMPANIES UNDER COVERAGE BY AUTHOR
Price Evercore ISI
Symbol Company Rating (2015-02-18) Target
COR Coresite Realty Corp. Buy $48.52 $50.00
CONE CyrusOne, Inc. Buy $30.16 $33.00
DLR Digital Realty Trust, Inc. Hold $67.58 $72.00
DFT DuPont Fabros Technology, Inc. Hold $32.07 $35.00
EQIX Equinix, Inc. Buy $228.91 $240.00
INXN InterXion Holding N.V. Hold $32.00 $34.50
RAX Rackspace Hosting, Inc. Buy $51.12 $55.00
TCY-GB TelecityGroup plc Hold 9.44 9.50
T AT&T Inc. Hold 34.49 33.00
GOGO GoGo Inc. Buy $15.64 $26.00
S Sprint Corporation Hold 4.98 4.50
TMUS T-Mobile US, Inc. Buy $31.00 $34.00
VZ Verizon Communications Inc. Hold $48.94 $50.00
AMT American Tower Corporation Buy $96.20 $109.00
CCI Crown Castle International Corp. Hold $88.20 $86.00
SBAC SBA Communications Corporation Buy $122.17 $125.00
February 18, 2015
10

11. ANALYST CERTIFICATION
The analysts, Jonathan Schildkraut and Robert Gutman, primarily responsible for the preparation of this research report attest to the following: (1)
that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers; and (2) that
no part of the research analyst’s compensation was, is, or will be directly related to the specific recommendations or views in this research report.
DISCLOSURES
This report is approved and/or distributed by International Strategy & Investment Group LLC (“ISI Group LLC”), a U.S. licensed broker-dealer
regulated by the Financial Industry Regulatory Authority (“FINRA”) and by International Strategy & Investment Group (UK) Limited (“ISI UK”),
which is authorised and regulated in the United Kingdom by the Financial Conduct Authority. ISI Group and ISI UK are subsidiaries of Evercore
Partners Inc. and collectively operate under the global marketing brand name Evercore ISI (“Evercore ISI”). The trademarks, logos and service
marks shown on this report are registered trademarks of Evercore Partners Inc.
The analysts and associates responsible for preparing this report receive compensation based on various factors, including the firm’s total
revenues, a portion of which is generated by affiliated investment banking transactions. Evercore ISI publishes and disseminates research
through Evercore ISI, and seeks to update its research as appropriate, but various regulations may prevent this from happening in certain
instances. Aside from certain industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as
appropriate in the analyst’s judgment.
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ownership is subject to compliance with applicable regulations and disclosure. Evercore ISI also prohibits analysts, associates and members of
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This report may include a Tactical Call, which describes a near-term event or catalyst affecting the subject company or the market overall and
which is expected to have a short-term price impact on the equity shares of the subject company. This Tactical Call is separate from the analyst’s
long-term recommendation (Buy, Hold or Sell) that reflects a stock’s forward 12-month expected return), is not a formal rating and may differ from
the target prices and recommendations reflected in the analyst’s long-term view.
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Additional information on securities or financial instruments mentioned in this report is available upon request.
Ratings Definitions
Current Ratings Definition
Evercore ISI’s recommendations are based on a stock’s total forecasted return over the next 12 months. Total forecasted return is equal to the
expected percentage price return plus gross dividend yield. We divide our stocks under coverage into three ratings categories, with the following
return guidelines:
Buy – the total forecasted return is expected to be greater than 10%
Hold – the total forecasted return is expected to be greater than or equal to 0% and less than or equal to 10%
Sell – the total forecasted return is expected to be less than 0%
Suspended – the company rating, target price and earnings estimates have been temporarily suspended.
Historical Ratings Definitions
Prior to October 10, 2014, ISI Group LLC and ISI UK utilized the following different ratings system, which was based on a 12-month risk adjusted
total return:
Strong Buy - Return > 20%
Buy - Return 10% to 20%
Neutral - Return 0% to 10%
Cautious - Return -10% to 0%
Sell - Return < -10%
For disclosure purposes, ISI Group LLC and ISI UK ratings were viewed as follows: Strong Buy and Buy equate to Buy, Neutral equates to Hold,
and Cautious and Sell equate to Sell.
On October 31, 2014, Evercore Partners Inc. acquired ISI Group LLC and ISI UK and transferred its research business to ISI Group LLC (the
“Evercore Acquisition”). Prior to October 31. 2014, certain research reports were separately produced by Evercore ISI’s affiliate, Evercore Group
L.L.C. (“Evercore Group”). Until October 10, 2014, Evercore Group’s recommendations were based on a stock’s expected total return relative to
the analyst’s coverage universe over the following 12 months. Stocks under coverage were divided into three categories:
Overweight – the stock is expected to outperform the average total return of the analyst’s coverage universe over the next 12 months.
Equal-Weight – the stock is expected to perform in line with the average total return of the analyst’s coverage universe over the next 12 months.
Underweight – the stock is expected to underperform the average total return of the analyst’s coverage universe over the next 12 months.
Suspended – the company rating, target price and earnings estimates have been temporarily suspended.
For disclosure purposes, Evercore Group’s prior “Overweight,” “Equal-Weight” and “Underweight” ratings were viewed as “Buy,” “Hold” and “Sell,”
respectively.
February 18, 2015
11

12. Evercore ISI ratings distribution (as of 02/18/2015)
As a result of the Evercore Acquisition, ISI Group and ISI UK became affiliated with businesses that provide investment banking
services. The ratings distribution chart below reflects information relating to investment banking services that were provided by an
investment banking entity that may or may not have been affiliated with Evercore ISI at the time the rating was made.
Coverage Universe Investment Banking Services / Past 12 Months
Ratings Count Pct. Rating Count Pct.
Buy 310 49% Buy 38 12%
Hold 294 46% Hold 11 4%
Sell 29 5% Sell 1 3%
Suspended 5 1% Suspended 2 40%
Issuer-Specific Disclosures (as of February 18, 2015)
Evercore ISI or an affiliate has acted as a manager or co-manager of a public offering of securities by this subject company CyrusOne, Inc. in
the last 12 months.
Evercore ISI or an affiliate expects to receive or intends to seek compensation for investment banking services from these subject companies
CyrusOne, Inc., Coresite Realty Corp., DuPont Fabros Technology, Inc., Digital Realty Trust, Inc., Equinix, Inc., InterXion Holding N.V. and
Rackspace Hosting, Inc. within the next three months.
Evercore ISI or an affiliate has received compensation from these subject companies CyrusOne, Inc. and Equinix, Inc. for investment banking
services in the last 12 months.
Price Charts
Apr 2012 Jul 2012 Oct 2012 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Jan 2015
35
30
25
20
15
Closing Price Target Price
CyrusOne, Inc. Rating History as of 02/18/2015
I:OW:$24.00
09/30/13
OW:$25.00
12/09/13
OW:$26.00
02/21/14
OW:$27.00
05/07/14
OW:$30.00
08/04/14
B:$30.00
10/09/14
B:$32.00
10/27/14
B:$33.00
12/10/14
powered by: BlueMatrix
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12

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February 18, 2015
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