CyrusOne Inc

Good morning, and welcome to the Cyrus One LLC third quarter 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would not like to turn the conference over to Michael Schaefer, SVP, Please go ahead.

Thank you, Anthony. Good morning, everyone, and welcome to Cyrus One's third quarter 2021 earnings call. Today, I am joined by Dave Ferdman, interim president and CEO, Catherine Modlock, CFO, and John Hayden, COO. Before we begin, I would like to remind you that our third quarter earnings release, along with the third quarter financial tables, are available on the investor relations section of our website at CyrusOne.com. I would also like to remind you that comments made on today's call and some of the responses to your questions deal with forward-looking statements related to CIRAS 1 and are subject to risks and uncertainties. Factors that may cause our actual results to differ from expectations are detailed in the company's filings with the SEC, which you may access on the SEC's website or on ciras1.com. We undertake no obligation to revise these statements following the date of this conference call, except as required by law. In addition, some of the company's remarks this morning contain non-GAAP financial measures. You can find reconciliations of those measures to the most comparable GAAP measures in the earnings release, which is posted on the investor section of the company's website. I would now like to turn the call over to our president and CEO, Dave Ferdman.

Thank you, Michael, and welcome to Cyrus One's third quarter earnings call. We have a number of positive things to discuss today, and we will move to the quarterly results and provide an update on guidance shortly. But I want to start with two key points. First, we delivered great results this quarter with strong financial and leasing performance, including a significant bookings contribution from Europe and healthy pricing across the deals. Having been in this seat for three months and had an opportunity to meet with many of our stakeholders, I cannot say I am even more excited about the outlook for this business. than I was on our first call. Over the last three months, I visited many of our markets, and I'm really impressed with this team. Their passion and commitment are second to none, and their willingness to jump through hoops to make customers happy is simply part of their DNA. Secondly, I want to directly acknowledge and address the recent speculation regarding the company. I am not going to comment on any market rumor. What I will say is that we are open-minded to all avenues and alternatives to maximizing our shareholder value. Our board and management team are committed to this. Our assessment of the best way to maximize value is to keep our shareholders' interests as our top priority. This is our guiding principle. In any case, we have to continue to execute. The strong results we posted this quarter show that we are focused on and succeeding in doing just that. Beginning with slide four, you can see our key financial metrics for the quarter, which Kathryn will discuss. We signed 20 megawatts, totaling approximately $38 million in annual GAAP revenue. As of the end of the quarter, our revenue backlog totaled approximately $106 million, positioning us well for growth next year and beyond. Turning to slide five, we brought 38 megawatts online during the quarter, most of which is leased capacity in the U.S. Our development pipeline as of the end of September consisted of 49 megawatts across London, Frankfort, and Northern Virginia. We also acquired parcels of land in Frankfort and San Antonio, each with estimated power capacity of 21 megawatts. Our balance sheet remained strong, and we had more than $2 billion in available liquidity as of the end of the quarter to fund our growth. Moving to slide six, annualized gap revenue signed during the quarter was 10 percent higher than the prior four-quarter average. MRR per KW signed was nearly $160, reflecting strong relative pricing on hyperscale deals in Europe and good enterprise demand in the U.S. The long-waited average lease term of nine years is in line with the average lease term for deals signed over the prior three quarters, extending the maturity profile of our portfolio. As the pie chart at the bottom of the slide shows, 55 percent of rent is from hyperscale customers, and we expect that percentage to continue to increase over time, given the significant growth in their footprints in both the U.S. and Europe. Moving to slide seven, our European markets continue to perform very well, accounting for $27 million in annualized gap revenue signed in the third quarter and $53 million through the first three quarters of the year, representing nearly half of our total year-to-date leasing. The site acquisition in Frankfurt gives us additional runway for growth in our strongest European market to accommodate demand from our hyperscale customers as they continue to scale. Taking into account the development projects underway in Frankfurt and London, we have a near-term European footprint of nearly 220 megawatts, which represents over 20 percent of the company's near-term footprint. Turning to slide eight, global supply chain concerns have been dominating the headlines in recent months. We continue to actively manage our supply chain and have not experienced any significant near-term headwinds. As we have discussed before, we have a robust and flexible supply chain that is designed to mitigate a lot of this risk. Our key vendors hold inventory until we need it, and we have forward purchase contracts on long lead time items with fixed rates to help protect against near-term pricing pressure. We have long-term relationships with key suppliers, and we benefit from having a standardized design. That standardization, combined with the significant development that we have across the portfolio, allows us to purchase at scale and achieve better pricing. We also have resiliency built through the supply chain with key components dual-sourced. Our internal teams are tightly integrated and work closely together to ensure accurate capacity planning and the ability to deliver our product when and where it is needed to meet demand from our customers. Overall, business has been minimally impacted by the broader inflation and supply chain disruption issues, and we are well positioned heading into next year. In closing, the outlook for the industry remains strong, and the team is working hard to ensure we are positioned to capitalize on opportunities in front of us and focused on maximizing shareholder value. We continue to see robust demand, and we're having productive discussions with our customers. And we have capacity across our markets, as well as liquidity to fund our growth. With that, Catherine will now provide more color on our financial performance for the quarter and an update on our guidance for the year. Catherine.