[February 22, 2017]

CyrusOne Reports Fourth Quarter and Full Year 2016 Earnings

CyrusOne Inc. (NASDAQ: CONE), a premiere global data center REIT, today announced fourth quarter and full year 2016 earnings.

Highlights

• Leased 9 megawatts ("MW") and 74,000 colocation square feet in the fourth quarter totaling $19 million in annualized GAAP revenue

• Backlog of $59 million in annualized GAAP revenue as of the end of the fourth quarter, representing nearly $470 million in total contract value
• Added two of the ten largest cloud companies as new customers in the fourth quarter, increasing our total to nine of the ten largest cloud companies
• For full year 2016, leased a record 92 MW and 642,000 colocation square feet totaling $148 million in annualized GAAP revenue and more than $1.2 billion in total contract value
• Announcing an 11% increase in the quarterly dividend for the first quarter of 2017 to $0.42 per share, up from $0.38 per share in 2016
• Subsequent to quarter end, announced the acquisition of two data centers from Sentinel Data Centers ("Sentinel"), establishing a presence in the Southeast and enhancing the diversification of the portfolio, with expected immediate accretion to Normalized FFO per diluted share

"CyrusOne had its strongest year since our IPO, including record revenue growth and bookings and high growth across all key metrics," said Gary Wojtaszek, president and chief executive officer of CyrusOne. "We are well positioned for continued growth in 2017 with a revenue backlog of nearly $60 million, a robust sales funnel consisting of cloud and enterprise customers, and enhanced growth from our recently announced acquisition of the Sentinel data centers. Our balance sheet is strong, and our development pipeline is 72% pre-leased, significantly de-risking our capital spend."

Fourth Quarter 2016 Financial Results

Net income was $0.8 million for the fourth quarter, compared to a net loss of $1.2 million in the same period in 2015. Normalized Funds From Operations (Normalized FFO)¹ was $56.4 million for the fourth quarter, compared to $44.2 million in the same period in 2015, an increase of 28%. Net income per diluted common share² was $0.01 in the fourth quarter of 2016, compared to a net loss of $0.02 per diluted common share or common share equivalent in the same period in 2015. Normalized FFO per diluted common share² was $0.68 in the fourth quarter of 2016, an increase of 11% over fourth quarter 2015.

Revenue was $137.4 million for the fourth quarter, compared to $113.3 million for the same period in 2015, an increase of 21%. The increase in revenue was driven primarily by a 32% increase in leased colocation square feet and additional interconnection services. Net operating income (NOI)³ was $89.6 million for the fourth quarter, compared to $71.9 million in the same period in 2015, an increase of 25%. Adjusted EBITDA⁴ was $73.0 million for the fourth quarter, compared to $60.5 million in the same period in 2015, an increase of 21%.

Leasing Activity

CyrusOne leased approximately 9 MW of power and 74,000 colocation square feet (CSF) in the fourth quarter, representing $1.6 million in monthly recurring rent inclusive of the monthly impact of installation charges, or approximately $19 million in annualized contracted GAAP revenue⁵ excluding estimates for pass-through power. The weighted average lease term of the new leases based on square footage is 63 months (5.3 years), and the weighted average remaining lease term of CyrusOne's portfolio is 56 months (taking into account the impact of the backlog and the Sentinel data center acquisition), double the weighted average remaining lease term of the portfolio at the time of the Company's initial public offering. Recurring rent churn⁶ for the fourth quarter was 2.2%, compared to 0.4% for the same period in 2015.

Portfolio Utilization and Development

In the fourth quarter, the Company completed construction on approximately 41,000 CSF and 12 MW of power capacity in Northern Virginia and Phoenix, increasing total CSF across 35 data centers to approximately 2,080,000 CSF. This represents an increase of 506,000 CSF, or 32%, from December 31, 2015. CSF utilization⁷ as of the end of the fourth quarter was 92% for stabilized properties⁸ and 85% overall. The Company has development projects underway in Phoenix, Northern Virginia, San Antonio and Chicago that will add approximately 494,000 CSF and 88 MW of power capacity. The Company has 825,000 square feet of powered shell available for development as well as 239 acres of land across its markets.

Balance Sheet and Liquidity

As of December 31, 2016, the Company had gross assets totaling approximately $3.4 billion, an increase of approximately 30% over total gross assets as of December 31, 2015. CyrusOne had $1,262.3 million of long term debt⁹, cash and cash equivalents of $14.6 million, and $757.9 million available under its unsecured revolving credit facility as of December 31, 2016. Net debt⁹ was $1,258.5 million as of December 31, 2016, approximately 25% of the Company's total enterprise value of $5.0 billion, or 4.3x Adjusted EBITDA for the last quarter annualized. Available liquidity¹⁰ was $772.5 million as of December 31, 2016.

Dividend

On October 31, 2016, the Company announced a dividend of $0.38 per share of common stock for the fourth quarter of 2016. The dividend was paid on January 13, 2017, to stockholders of record at the close of business on December 30, 2016.

Additionally, today the Company is announcing a dividend of $0.42 per share of common stock for the first quarter of 2017, an 11% increase in the quarterly dividend compared to 2016. The dividend will be paid on April 14, 2017, to stockholders of record at the close of business on March 31, 2017.

Guidance

CyrusOne is issuing guidance for full year 2017. The annual guidance provided below represents forward-looking statements, which are based on current economic conditions, internal assumptions about the Company's existing customer base and the supply and demand dynamics of the markets in which CyrusOne operates.

CyrusOne does not provide reconciliations for the non-GAAP financial measures included in the annual guidance provided below due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income (loss) and adjustments that could be made for transaction and acquisition integration costs, legal claim costs, lease exit costs, asset impairments and loss on disposals and other charges in its reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.

Acquisition of Two Data Centers from Sentinel

Subsequent to the end of the quarter, CyrusOne announced the execution of a definitive agreement to acquire two data centers (collectively, the "Facilities") located in Raleigh-Durham, North Carolina and Somerset, New Jersey from Sentinel. The total purchase price is $490 million, excluding transaction-related expenses. This represents a multiple of approximately 14.4 times pro forma run-rate annualized EBITDA of approximately $34 million.

In 2016, the Facilities generated revenue of nearly $50 million. As of December 31, 2016, the two properties consisted of more than 160,000 colocation square feet and approximately 21 MW of power capacity, with nearly 85% of the power capacity leased. Taking into account the impact of this transaction, the NOI contribution from facilities fully owned by CyrusOne will increase to nearly 80%.

The transaction is expected to provide additional benefits to CyrusOne, including the following:

• Enhanced Geographic Diversification: This transaction enhances CyrusOne's geographic diversification, establishing a presence in the Southeast, a previously stated strategic goal for the Company. In addition, the Raleigh-Durham market will represent the lowest power cost in CyrusOne's portfolio and one of the lowest in the United States. The Somerset, New Jersey data center further expands the Company's Northeast footprint, providing additional options for the combined customer base to deploy disaster recovery facilities across New Jersey using the Company's National IX product to link them together.
• Long-Term Leases with High Quality Customer Base: The weighted average remaining lease term of the Sentinel portfolio is more than 8 years, with only 3% of rent due for renewal through 2019. The Facilities consist of nearly 30 customers, more than two-thirds of which will be new to CyrusOne, including five new Fortune 1000 companies. Approximately 70% of the portfolio rent is generated from investment grade customers.
• Increased Penetration in Healthcare and Financial Services Verticals: Over 80% of rent from the Facilities is generated from customers in the Healthcare and Financial Services verticals. With respect to the Healthcare vertical, taking into account these new customers, the transaction is expected to more than double the contribution from this industry group to the combined CyrusOne portfolio.
• Growth Opportunity: There are approximately 34,000 colocation square feet and 8 MW of power capacity that are either currently available for lease or can be developed in the near term at a total cost of less than $15 million. CyrusOne also has the ability to add another 230,000 colocation square feet and 37 MW of power capacity at a cost expected to be in line with the Company's current build cost per MW, more than doubling the footprint of the two data centers. This additional capacity will enhance the overall value of the transaction to CyrusOne as the Company fully develops the facilities over time to meet customer demand.

The acquisition is expected to be immediately accretive to Normalized FFO per diluted share. CyrusOne also plans to develop additional capacity over time, which is expected to create incremental income accretion and long-term value creation.

CyrusOne intends to finance the acquisition with proceeds of approximately $211 million from early settlement of its forward equity sale entered last August 2016 and its recently expanded credit facility.

Upcoming Conferences and Events

• Deutsche Bank Media & Telecom Conference on March 6-8 in Palm Beach, Florida
• Citi Global Property CEO Conference on March 5-8 in Hollywood, Florida
• CyrusOne Design and Build Teach-In on March 7 in Hollywood, Florida

Conference Call Details

CyrusOne will host a conference call on February 23, 2017, at 11:00 AM Eastern Time (10:00 AM Central Time) to discuss its results for the fourth quarter of 2016. A live webcast of the conference call and the presentation to be made during the call will be available under the "Investor Relations" tab in the "Events and Presentations" section of the Company's website at http://investor.cyrusone.com/events.cfm. The U.S. conference call dial-in number is 1-844-492-3731, and the international dial-in number is 1-412-542-4121. A replay will be available one hour after the conclusion of the earnings call on February 23, 2017, through March 9, 2017. The U.S. toll-free replay dial-in number is 1-877-344-7529 and the international replay dial-in number is 1-412-317-0088. The replay access code is 10098910.

Safe Harbor

This release and the documents incorporated by reference herein contain forward-looking statements regarding future events and our future results that are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as "expects," "anticipates," "predicts," "projects," "intends," "plans," "believes," "seeks," "estimates," "continues," "endeavors," "strives," "may," variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned these forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially and adversely from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this release and those discussed in other documents we file with the Securities and Exchange Commission (SEC). More information on potential risks and uncertainties is available in our recent filings with the SEC, including CyrusOne's Form 10-K report, Form 10-Q reports, and Form 8-K reports. Actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.

Use of Non-GAAP Financial Measures

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

Management uses FFO, Normalized FFO, Adjusted EBITDA, NOI, and Adjusted NOI as supplemental performance measures because they provide performance measures that, when compared year over year, capture trends in occupancy rates, rental rates and operating costs. The Company also believes that, as widely recognized measures of the performance of real estate investment trusts (REITs) and other companies, these measures will be used by investors as a basis to compare its operating performance with that of other companies. Other companies may not calculate these measures in the same manner, and, as presented, they may not be comparable to others. Therefore, FFO, Normalized FFO, NOI, Adjusted NOI, and Adjusted EBITDA should be considered only as supplements to net income as measures of our performance. FFO, Normalized FFO, NOI, Adjusted NOI, and Adjusted EBITDA should not be used as measures of liquidity or as indicative of funds available to fund the Company's cash needs, including the ability to pay dividends. These measures also should not be used as substitutes for cash flow from operating activities computed in accordance with U.S. GAAP.

¹Normalized Funds From Operations (Normalized FFO) is defined as Funds From Operations (FFO) plus amortization of customer relationship intangibles, transaction and acquisition integration costs, legal claim costs and lease exit costs, and other special items including loss on extinguishment of debt and severance and management transition costs, as appropriate. FFO is net (loss) income computed in accordance with U.S. GAAP before real estate depreciation and amortization and Asset impairments and loss on disposal. Because the value of the customer relationship intangibles is inextricably connected to the real estate acquired, CyrusOne believes the amortization and impairments of such intangibles is analogous to real estate depreciation and impairments; therefore, the Company adds the customer relationship intangible amortization and impairments back for similar treatment with real estate depreciation and impairments. The Company believes its Normalized FFO calculation provides a comparable measure to that used by others in the industry. However, other REITs may not calculate Normalized FFO in the same manner. Accordingly, the Company's Normalized FFO may not be comparable to others.

²Net income / (loss) per diluted common share and Normalized FFO per diluted common share are defined as net income / (loss) and Normalized FFO, respectively, divided by the weighted average common shares outstanding for the period, which were 82,881,867 for the fourth quarter of 2016 and 78,988,266 for full year 2016.

³Net Operating Income (NOI) is defined as revenue less property operating expenses. Amortization of deferred leasing costs is presented in depreciation and amortization, which is excluded from NOI. CyrusOne has not historically incurred any tenant improvement costs. Our sales and marketing costs consist of salaries and benefits for our internal sales staff, travel and entertainment, office supplies, marketing and advertising costs. General and administrative costs include salaries and benefits of our senior management and support functions, legal and consulting costs, and other administrative costs. Marketing and advertising costs are not property-specific, rather these costs support our entire portfolio. As a result, we have excluded these marketing and advertising costs from our NOI calculation, consistent with the treatment of general and administrative costs, which also support our entire portfolio. From time to time, there may be non-recurring costs in property operating expenses, and as a result the Company may present Adjusted Net Operating Income (Adjusted NOI) to exclude the impacts of those costs.

⁴Adjusted EBITDA is defined as net income (loss) as defined by U.S. GAAP plus interest expense, income tax (benefit) expense, depreciation and amortization, stock-based compensation, transaction and integration costs, severance and management transition costs, asset impairments and (gain) loss on disposals, lease exit costs, legal claim costs and other special items. Other companies may not calculate Adjusted EBITDA in the same manner. Accordingly, the Company's Adjusted EBITDA as presented may not be comparable to others.

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

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

⁷Utilization is calculated by dividing CSF under signed leases for available space (whether or not the contract has commenced billing) by total CSF. CSF Utilized differs from CSF Leased presented in the Data Center Portfolio table because the utilization rate includes CSF for signed leases that have not commenced billing.

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

⁹Long term debt and net debt exclude adjustments for deferred financing costs. Net debt provides a useful measure of liquidity and financial health. The Company defines net debt as long-term debt and capital lease obligations, offset by cash, cash equivalents, and temporary cash investments.

¹⁰Liquidity is calculated as cash, cash equivalents, and temporary cash investments on hand, plus the undrawn capacity on CyrusOne's revolving credit facility.

About CyrusOne

CyrusOne (NASDAQ: CONE) is a high-growth real estate investment trust (REIT) specializing in highly reliable enterprise-class, carrier-neutral data center properties. The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for more than 945 customers, including 181 Fortune 1000 companies.

CyrusOne's data center offerings provide the flexibility, reliability, and security that enterprise and cloud customers require and are delivered through a tailored, customer service-focused platform designed to foster long-term relationships. CyrusOne is committed to full transparency in communication, management, and service delivery throughout its 35 data centers worldwide.

Company Profile

CyrusOne (NASDAQ: CONE) specializes in highly reliable enterprise-class, carrier-neutral data center properties. The Company provides mission-critical data center facilities that protect and ensure the continued operation of IT infrastructure for more than 945 customers, including 181 Fortune 1000 companies. CyrusOne's data center offerings provide the flexibility, reliability, and security that enterprise customers require and are delivered through a tailored, customer service-focused platform designed to foster long-term relationships. CyrusOne is committed to full transparency in communication, management, and service delivery throughout its 35 data centers worldwide.

• Best-in-Class Sales Force
• Flexible Solutions that Scale as Customers Grow
• Massively Modular® Engineering with Data Hall Builds in 12-16 Weeks
• Focus on Operational Excellence and Superior Customer Service
• Proven Leading-Edge Technology Delivering Power Densities up to 900 Watts per Square Foot
• National IX Replicates Enterprise Data Center Architecture

The annual guidance provided above represents forward-looking statements, which are based on current economic conditions, internal assumptions about the Company's existing customer base and the supply and demand dynamics of the markets in which CyrusOne operates.

CyrusOne does not provide reconciliations for the non-GAAP financial measures included in the annual guidance provided above due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income (loss) and adjustments that could be made for transaction and acquisition integration costs, legal claim costs, lease exit costs, asset impairments and loss on disposals and other charges in its reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.