Cencora, Inc.

Greetings and welcome to CoreSite Realty's third quarter 2020 earnings call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your investor relations host, Kate Ruppe. Please go ahead.

Thank you. Good morning and welcome to CoreSite's third quarter 2020 earnings conference call. I'm joined today by Paul Zurich, President and CEO, Steve Smith, Chief Revenue Officer, and Jeff Finnan, Chief Financial Officer. Before we begin, I would like to remind everyone that our remarks on today's call may include forward-looking statements as defined by federal securities laws, including statements addressing projections, plans, or future expectations. These statements are subject to a number of risks and uncertainties that could cause actual results or facts to differ materially from such statements for a variety of reasons. We assume no obligation to update these forward-looking statements and can give no assurance that the expectations will be obtained. Detailed information about these risks is included in our filings with the SEC. Also, on this conference call, we refer to certain non-GAAP financial measures such as funds from operations. Reconciliations of these non-GAAP financial measures are available in the supplemental information that is part of our full earnings release, which can be found on the investor relations pages of our website at CoreSite.com. With that, I'll turn the call over to Paul.

Good morning, and thank you for joining us. I will cover our third quarter highlights, followed by Steve and Jeff's more in-depth discussions of sales and financial matters. Our Q3 highlights include new and expansion sales of $12.5 million of annualized gap rent, operating revenue of $154 million, representing year-over-year growth of 6.3%, FFO per share of $1.33, a year-over-year increase of 5 cents per share, or 3.9%, power and cooling uptime of 100% for the quarter, thereby sustaining seven nines of uptime year-to-date, Completion in October of LA3 Phase 1 and commencement of our previously announced 4.5 megawatt pre-lease and issuance of our third annual corporate sustainability report. The state of the economy in recent months appears to be leading more enterprises to raise the priority of their digital transformation initiatives. This dynamic seemed to help our new and expansion sales execution during the third quarter, leading to good new and expansion sales and good progress in building a robust sales pipeline for future quarters. Our sales, customer support, and data center operations teams have been extremely agile, helping our customers navigate these challenging times and plug into the value of our ecosystems as part of their hybrid cloud architectures. As discussed last quarter, we continue to see some elongated sales cycles for traditional enterprises due to the COVID-19 pandemic, but the overall size of our sales pipeline seems to compensate for this challenge. However, we ultimately have to execute on those opportunities and convert them into successful sales. Some activities are returning to normal. We resumed in-person data center tours, making sure they follow COVID-19 safety protocols. We have also seen more customers taking comfort in these protocols, which support the safety of our onsite staff and customers, leading to more normal volumes of customer visits in our data centers. At the same time, we continue to see increased remote hands activity and use of our customer portal. As I mentioned earlier, we recently published our third annual corporate sustainability report. Sustainability is an important ongoing goal for CoreSight as we focus holistically on a broad range of success measures that take into account all of our stakeholders. report summarizes our continued commitment to our customers, colleagues, and communities, including providing our customers with reliable and energy-efficient data centers, building a culture of fair and equal treatment, respect, responsibility, transparency, innovation, and operational excellence, and fostering communities of customers that work synergistically with each other. Turning to our property development, LA3 is our first ground-up data center in Los Angeles, so we are pleased to complete phase one on time in October, and equally pleased to commence our 4.5 megawatt pre-lease, with much runway to expand on the success of our Los Angeles campus. We also completed the NY2 power infrastructure project, adding an incremental four megawatts of power to support our existing space. The completion of LA3 phase one fulfills our multi-year plan commenced in 2017 to add four ground-up enterprise class data centers to our portfolio with the goal of restocking contiguous capacity to strategically support the expansion of our campuses and our existing customers and to bring new customers to join these communities. We realized some of the fruits of this plan this quarter through our ability to opportunistically win a modest and fast-moving hyperscale deployment. As important, We are making good progress on the permitting and entitlements for SV9, our next new data center on our Santa Clara campus. We continue to see a strong sales funnel for our new CH2 data center in Chicago. However, it primarily consists of enterprises with longer and less predictable decision timelines. And recently, we executed our Illinois Memorandum of Understanding, providing our participating customers with sales tax savings. Our increased capacity is crucial to meeting the customer demand we continue to see for edge capacity and edge cloud deployments in our major metro markets, especially for enterprises seeking the highest performance, cost-effective, secure, and reliable co-location solutions for multi and hybrid cloud IT architectures. In closing, our increased capacity is providing increased sales opportunities, driving our strong Q3 sales, And our network, cloud, and enterprise dense campuses and major metro markets are well positioned to benefit further from the secular tailwinds for data center space. With that, I will turn the call over to Steve.