cowen

Telecom Services: Data Center REITs

CyrusOne

Equity Research Earnings Update

www.cowen.com Please see addendum of this report for important disclosures.

February 19, 2015

Price: $30.16 (02/18/2015)

Price Target: $34.00 (Prior $32.00)

OUTPERFORM (1)

Solid 4Q14 Results; Substantial DividendIncrease

Colby [email protected]

Jonathan [email protected]

Gregory Williams, [email protected]

Key DataSymbol NYSE: CONE

52-Week Range: $31.02 - 19.52

Market Cap (MM): $1,968.0

Net Debt (MM): $636.7

Cash/Share: $6.77

Dil. Shares Out (MM): 38.7

Enterprise Value (MM): $2,604.7

ROIC: 4.2%

ROE (LTM): (1.7)%

BV/Share: $12.25

Dividend: $1.26

Yield: 4.18%

FY (Dec) 2014A 2015E 2016E

Funds From Operations

Q1 $0.42 $0.49 -

Prior Q1 - $0.46 -

Q2 $0.39 $0.49 -

Prior Q2 - - -

Q3 $0.44 $0.50 -

Prior Q3 - - -

Q4 $0.48 $0.53 -

Prior Q4 $0.42 $0.55 -

Year $1.73 $2.01 $2.39

Prior Year $1.67 $1.99

Revenue (MM)

Year $330.9 $376.7 $430.4

Prior Year $328.5 $386.3

EV/S 7.9x 6.9x 6.1x

The Cowen InsightCONE reported solid 4Q14 results including rev/FFO slightly ahead of expectationsand provided useful color as to why it doesn’t expect any material impact from loweroil prices. The company also increased its dividend by 50% which now implies a 4.2%yield and was meaningfully ahead expectations and provided initial 2015 guidancethat while slightly below estimates we view as conservative.

Conclusion

CONE reported solid 4Q14 results including revenue/FFO that beat expectationsdriven in part by higher installs than was expected. Mgmt. also provided an in-depthoverview as to why it doesn’t expect lower oil prices to have a material impact onits business despite meaningful concerns from investors heading into the quarter.To this point, its energy vertical has grown at a ~7% CAGR the past two years vs.~30% CAGR across its other verticals which points to the decreasing reliance on theenergy vertical for growth. Notably, the company also increased its dividend by 50% to$0.315/share which equates to an annual yield of 4.2% and was meaningfully aheadof expectations driven by its decision to increase its AFFO payout ratio to be morein-line with peers. We believe this also points to the company’s increasing focus onFFO growth and profitability vs. simply top-line growth which to date has been theprimary focus. While 2015 revenue/FFO guidance was slightly below expectations, weget the sense the company is simply trying to be conservative at this point in the yearand believe it is likely trending towards at least the mid-point given the solid trendscurrently being witnessed. Reiterate Outperform.

Results

Rev was $86.9MM vs. our $84.5MME and the Street’s $85.6MME and EBITDA was$44.6MM (51.3%) vs. our $41.9MME (49.6%) and the Street’s $42.9MM (50.1%).Normalized FFO was $0.48 vs. our $0.42E and the Street’s $0.42E. CONE leased 44KCSF vs. 33K CSF last quarter and 47K CSF a year ago. Churn declined to 1.7% from2.9% last quarter although it is expected to be ~3.0% in 1Q15 and to revert back tomore historical levels thereafter.

Guidance

For 2015, the company provided revenue of $370-385MM (Street Old: $380.3MME),EBITDA of $185-195MM (Street Old: $194.6MME), normalized FFO of $1.90-2.00(Street Old: $1.98), and capex of $215-240MM.

Valuation

CONE trades at 15.0x 2015E FFO vs. the comp at 16.0x. We believe CONE should tradeat a premium due to superior rev/FFO growth over the next few years. Using a 15.0xEBITDA exit multiple and a 9.1% WACC, our DCF valuation implies the stock is worth$34 (prior $32).

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At A GlanceOur Investment Thesis

CONE reported solid 4Q14 results including revenue/FFO that beat expectations.Mgmt. also provided an in-depth overview as to why it doesn’t expect lower oil pricesto have a material impact on its business despite meaningful concerns from investorsheading into the quarter. Notably, the company also increased its dividend by 50% to$0.315/share which equates to an annual yield of 4.2% and was meaningfully aheadof expectations driven by its decision to increase its AFFO payout ratio to be morein-line with peers. We believe this also points to the company’s increasing focus onFFO growth and profitability vs. simply top-line growth which to date has been theprimary focus. While 2015 revenue/FFO guidance was slightly below expectations, weget the sense the company is simply trying to be conservative at this point in the yearand believe it is likely trending towards at least the mid-point given the solid trendscurrently being witnessed.

Forthcoming Catalysts

■ 1Q15 earnings call in May 2015.

Base Case Assumptions

■ 2014E-2019E revenue CAGR of 11.8%■ EBITDA margin is 49.6% in 2019E■ Apply a 15.0x terminal EBITDA

multiple to our DCF

Upside Scenario

■ 2014E-2019E revenue CAGR of>11.8%

■ EBITDA margin is >49.6% in 2019E■ Stock trades at an implied value of

>15.0x terminal EBITDA multiple

Downside Scenario

■ 2014E-2019E revenue CAGR of<11.8%

■ EBITDA margin is <49.6% in 2019E■ Stock trades at an implied value of

<15.0x terminal EBITDA multiple

Price Performance

Feb-15Nov-14Aug-14May-14

$32

30

28

26

24

22

20

18

Source: Bloomberg

Company Description

Based in Dallas, Texas, CyrusOne is an owner, operator, and developer of carrier-neutral data centers with ~25 data centers in and around roughly eight cities withinthe U.S. as well as in London and Singapore. The company’s goal is to be the preferredglobal data center provider to the Fortune 1000 and it currently has ~600 customersincluding nine of the Fortune 20 and 135 of the Fortune 1000. It focuses on attractingcustomers who have not historically outsourced their data center needs and providescustomers with a flexible array of solutions ranging from a single rack to large 50K sq.ft. wholesale type deployments although with a differentiated focus on service.

Analyst Top Picks

Ticker Price (02/18/2015) Price Target RatingRackspace Hosting RAX $51.12 $75.00 OutperformLevel 3 Communications LVLT $53.31 $62.00 OutperformCogent Communications Group CCOI $39.50 $47.00 Outperform

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Equity ResearchCyrusOne

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CyrusOne 4Q14 Comparative Analysis

($mn)

4Q14 4Q14E Var iance % 4Q14 3Q14 Var iance % 4Q14 4Q13 Var iance %

Key Metrics

Total CSF Utilized (EOP) 1,077,690 1,106,116 (28,426) -2.6% 1,077,690 1,056,116 21,574 2.0% 1,077,690 894,361 183,330 20.5%

Net Adds 21,574 50,000 (28,426) -56.9% 21,574 29,156 (7,582) -26.0% 21,574 51,090 (29,516) -57.8%

Total Available CSF 1,224,648 1,232,132 (7,484) -0.6% 1,224,648 1,200,132 24,516 2.0% 1,224,648 1,052,189 172,459 16.4%

% Utilized 88.0% 89.8% -1.8% -2.0% 88.0% 88.0% 0.0% 0.0% 88.0% 85.0% 3.0% 3.5%

Total Annualized Rent (EOP) $326.1 $329.8 ($3.7) -1.1% $326.1 $317.7 $8.3 2.6% $326.1 $266.9 $59.2 22.2%

Tota l Book ings/Leasing ("CSF") 44 ,000 NA NA NA 44 ,000 33 ,000 11 ,000 33 .3% 44 ,000 47 ,000 (3 ,000) -6 .4%

Churn 1.7% NA NA NA 1.7% 2.9% -1.2% -41.4% 1.7% 1.1% 0.6% 54.5%

Tota l Revenue $86 .9 $84 .5 $2 .4 2 .8% $86 .9 $84 .8 $2 .1 2 .5% $86 .9 $72 .3 $14 .6 20 .2%

y/y growth 20.2% 16.9% 3.3% - 20.2% 25.6% -5.4% - 20.2% 24.7% -4.5% -

0.0%

Property operating expenses 32.0 32.9 (0.9) -2.7% 32.0 33.0 ($1.0) -3.0% 32.0 24.3 $7.7 31.7%

as % of revenue 36.8% 38.9% -2.1% - 36.8% 38.9% -2.1% - 36.8% 33.6% 3.2% -

Net Opera t ing Income (Company definit ion) 54 .9 51 .6 $3 .3 6 .3% 54 .9 51 .8 $3 .1 6 .0% 54 .9 48 .0 $6 .9 14 .4%

NOI Margin 63.2% 61.1% 2.1% - 63.2% 61.1% 2.1% - 63.2% 66.4% -3.2% -

S&M 2.3 2.5 ($0.2) -8.4% 2.3 2.4 ($0.1) -5.4% 2.3 2.2 $0.1 3.6%

as % of revenue 2.6% 3.0% -0.3% - 2.6% 2.9% -0.2% - 2.6% 3.1% -0.4% -

G&A 8.0 7.2 $0.8 11.2% 8.0 7.2 $0.8 11.6% 8.0 5.9 $2.1 36.0%

as % of revenue 9.2% 8.5% 0.7% - 9.2% 8.5% 0.8% - 9.2% 8.1% 1.1% -

Adjusted EBITDA 44 .6 41 .9 $2 .7 6 .4% 44 .6 42 .2 $2 .4 5 .7% 44 .6 39 .9 $4 .7 11 .8%

Contribution Margin 114.3% 95.4% 18.9% - 114.3% 45.2% 69.1% - 114.3% 70.8% 43.5% -

EBITDA Margin 51.3% 49.6% 1.7% - 51.3% 49.8% 1.6% - 51.3% 55.2% -3.9% -

y/y growth 11.8% 5.1% 6.7% - 11.8% 15.6% -3.8% - 11.8% 40.5% -28.7% -

Depreciation & Amortization 30.6 30.6 ($0.0) -0.2% 30.6 30.0 $0.6 2.0% 30.6 26.6 $4.0 15.0%

Stock-based compensation 2.7 2.7 ($0.0) -1.7% 2.7 2.6 $0.1 3.8% 2.7 1.3 $1.4 107.7%

Other 0.1 0.3 ($0.2) -60.0% 0.1 0.0 $0.1 NM 0.1 3.0 ($2.9) -96.7%

Total operating costs and expenses 75.7 76.2 ($0.5) -0.7% 75.7 75.2 $0.5 0.7% 75.7 63.3 $12.4 19.6%

EBIT 11 .2 8 .3 $2 .9 35 .3% 11 .2 9 .6 $1 .6 16 .7% 11 .2 9 .0 $2 .2 24 .4%

Other Income

Interest expense (9.1) (10.6) $1.5 NM (9.1) (9.0) ($0.1) NM (9.1) (11.5) $2.4 NM

Interest income 0.0 0.0 $0.0 NM 0.0 0.0 $0.0 NM 0.0 0.0 $0.0 NM

Net Income from continuing opera t ions (11 .8 ) (3 .3 ) ($8 .5 ) NM (11 .8) 0 .2 ($12 .0 ) NM (11 .8) (3 .6 ) ($8 .2 ) NM

Noncontrolling interest & other (4.8) (1.5) ($3.3) NM (4.8) 0.1 ($4.9) NM (4.8) (2.3) ($2.5) NM

Net income a ttr ibutable to CyrusOne (7 .0 ) (1 .8 ) ($5 .2 ) NM (7 .0) 0 .1 ($7 .1 ) NM (7 .0) (1 .3 ) ($5 .7 ) NM

Common shares 38.7 38.8 (0.1) -0.4% 38.7 38.7 (0.0) 0.0% 38.7 22.0 16.7 75.8%

Operating Partnership Units 26.6 26.6 0.0 0.0% 26.6 26.6 0.0 0.0% 26.6 42.6 (16.0) -37.5%

Tota l Share Equiva lents 65 .3 65 .4 ($0 .1 ) -0 .2% 65 .3 65 .3 ($0 .0 ) 0 .0% 65 .3 64 .6 $0 .7 1 .0%

EPS (Common) ($0 .18) ($0 .05) ($0 .14) NM ($0 .18) $0 .00 ($0 .18) NM ($0 .18) ($0 .06) ($0 .12) NM

Dividend Declared/shr $0.21 $0.21 $0.00 0.0% $0.21 $0.21 $0.00 0.0% $0.21 $0.16 $0.05 31.3%

AFFO Payout Ratio 46.0% 54.6% -8.6% - 46.0% 47.1% -1.1% - 46.0% 49.7% -3.7% -

Normalized FFO per share $0 .48 $0 .42 $0 .06 14 .9% $0 .48 $0 .44 $0 .04 8 .0% $0 .48 $0 .37 $0 .11 30 .8%

AFFO per share $0 .46 $0 .38 $0 .07 18 .7% $0 .46 $0 .45 $0 .01 2 .4% $0 .46 $0 .32 $0 .13 41 .8%

Capex 89.3 103.8 (14.5) -14.0% 89.3 78.0 11.3 14.5% 89.3 63.0 26.3 41.7%

Ac tua ls v. Est imates Compar ison Quar ter over Quar ter Compar ison Year over Year Compar ison

Source: Company data, Cowen and Company estimates

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Cowen New vs. Old Estimates

($mn) Mar . 1Q June 2Q Sept. 3Q Dec . 4Q

1Q15E 2Q15E 3Q15E 4Q15E 2015E 2016E 2017E 2018E 2019E

Cowen Old 90.6 94.6 98.6 102.6 386.3 446.4 510.9 569.9 623.0

Revenue Cowen New 88 .9 92 .6 95 .8 99 .4 376 .7 430 .4 486 .8 535 .9 577 .4

Delta -1.9% -2.1% -2.8% -3.1% -2.5% -3.6% -4.7% -6.0% -7.3%

Cowen Old 44.7 47.1 48.6 52.0 192.4 221.9 253.2 281.7 307.0

EBITDA Cowen New 46 .1 46 .4 47 .3 49 .5 189 .3 216 .0 243 .4 266 .9 286 .6

Delta 3.2% -1.6% -2.6% -4.8% -1.6% -2.7% -3.9% -5.2% -6.6%

Cowen Old $0.46 $0.49 $0.50 $0.55 $1.99 $2.30 $2.54 $2.77 $3.00

Normalized FFO/Share Cowen New $0 .49 $0 .49 $0 .50 $0 .53 $2 .01 $2 .39 $2 .67 $2 .94 $3 .18

Delta 7.6% 0.9% -0.4% -3.3% 0.9% 4.0% 5.1% 6.0% 5.8%

Cowen Old 76.8 64.4 64.5 64.6 270.2 317.8 274.9 232.0 188.9

Capex Cowen New 24 .3 28 .9 111 .4 65 .7 230 .3 214 .5 186 .2 157 .8 129 .2

Delta -68.4% -55.2% 72.8% 1.8% -14.8% -32.5% -32.3% -32.0% -31.6% Source: Cowen and Company estimates

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CyrusOne Income Statement

($mn) Mar . 1Q June 2Q Sept. 3Q Dec . 4Q Mar . 1Q June 2Q Sept. 3Q Dec . 4Q

2012 2013 1Q14 2Q14 3Q14 4Q14 2014 1Q15E 2Q15E 3Q15E 4Q15E 2015E 2016E 2017E 2018E 2019E

Tota l Revenue $220 .8 $263 .5 $77 .5 $81 .7 $84 .8 $86 .9 $330 .9 $88 .9 $92 .6 $95 .8 $99 .4 $376 .7 $430 .4 $486 .8 $535 .9 $577 .4

y/y growth 21.5% 19.3% 29.0% 28.5% 25.6% 20.2% 25.6% 14.7% 13.4% 12.9% 14.4% 13.8% 14.3% 13.1% 10.1% 7.8%

Property operating expenses 76.0 93.2 27.7 31.8 33.0 32.0 124.5 33.6 36.7 38.7 39.8 148.7 170.2 192.8 212.4 229.0

as % of revenue 34.4% 35.4% 35.7% 38.9% 38.9% 36.8% 37.6% 37.8% 39.6% 40.4% 40.0% 39.5% 39.5% 39.6% 39.6% 39.7%

Net Opera t ing Income (Company definit ion) 144 .8 170 .3 49 .8 49 .9 51 .8 54 .9 206 .4 55 .3 55 .9 57 .1 59 .7 228 .0 260 .2 294 .0 323 .5 348 .4

NOI Margin 65.6% 64.6% 64.3% 61.1% 61.1% 63.2% 62.4% 62.2% 60.4% 59.6% 60.0% 60.5% 60.5% 60.4% 60.4% 60.3%

S&M 8.7 8.7 2.3 2.7 2.4 2.3 9.7 2.5 2.5 2.5 2.5 10.0 10.8 12.2 13.4 14.4

as % of revenue 3.9% 3.3% 3.0% 3.3% 2.9% 2.6% 2.9% 2.8% 2.7% 2.6% 2.5% 2.7% 2.5% 2.5% 2.5% 2.5%

G&A 18.3 23.6 5.8 6.4 7.2 8.0 27.4 6.7 7.0 7.3 7.6 28.7 33.4 38.5 43.1 47.3

as % of revenue 8.3% 9.0% 7.4% 7.9% 8.5% 9.2% 8.3% 7.5% 7.6% 7.6% 7.7% 7.6% 7.8% 7.9% 8.0% 8.2%

Management fees charged by CBI 2.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other 0.0 (0.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Adjusted EBITDA 115 .3 138 .7 41 .7 40 .8 42 .2 44 .6 169 .3 46 .1 46 .4 47 .3 49 .5 189 .3 216 .0 243 .4 266 .9 286 .6

Contribution Margin 40.2% 54.8% 34.6% -21.4% 45.2% 114.3% 45.4% 74.6% 7.7% 29.6% 61.3% 43.7% 49.7% 48.5% 48.0% 47.4%

EBITDA Margin 52.2% 52.6% 53.8% 49.9% 49.8% 51.3% 51.2% 51.8% 50.1% 49.4% 49.8% 50.3% 50.2% 50.0% 49.8% 49.6%

y/y growth 15.8% 20.3% 32.4% 32.5% 15.6% 11.8% 22.1% 10.5% 13.6% 12.1% 11.1% 11.8% 14.1% 12.6% 9.7% 7.4%

Depreciation & Amortization 73.4 95.2 27.6 29.8 30.0 30.6 118.0 30.8 30.9 31.6 32.0 125.4 130.7 135.4 139.3 142.5

Stock-based compensation 3.4 6.3 2.2 2.8 2.6 2.7 10.3 3.1 3.2 3.4 3.5 13.2 12.9 13.4 13.4 14.4

Other 22.2 25.6 0.1 0.8 0.0 0.1 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total operating costs and expenses 204.5 251.9 65.7 74.3 75.2 75.7 290.9 76.7 80.4 83.5 85.4 325.9 358.0 392.2 421.6 447.8

EBIT 16 .3 11 .6 11 .8 7 .4 9 .6 11 .2 40 .0 12 .2 12 .2 12 .3 14 .0 50 .8 72 .4 94 .6 114 .2 129 .7

Other Income

Interest expense (41.8) (43.7) (10.7) (10.7) (9.0) (9.1) (39.5) (9.5) (9.5) (10.0) (10.0) (39.0) (41.4) (50.4) (56.4) (59.4)

Interest income 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other 0.0 (1.2) 0.0 0.0 0.0 (13.6) (13.6) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total other income (expense), net (41.8) (44.9) (10.7) (10.7) (9.0) (22.7) (53.1) (9.5) (9.5) (10.0) (10.0) (39.0) (41.4) (50.4) (56.4) (59.4)

EBT (25 .5 ) (33 .3 ) 1 .1 (3 .3 ) 0 .6 (11 .5 ) (13 .1 ) 2 .7 2 .7 2 .3 4 .0 11 .7 31 .0 44 .2 57 .8 70 .3

Income taxes (5.1) 2.3 0.4 0.3 0.4 0.3 1.4 0.3 0.3 0.3 0.3 1.2 2.0 2.0 2.0 2.0

Net Income from continuing opera t ions (20 .4 ) (35 .6 ) 0 .7 (3 .6 ) 0 .2 (11 .8 ) (14 .5 ) 2 .4 2 .4 2 .0 3 .7 10 .5 29 .0 42 .2 55 .8 68 .3

Noncontrolling interest & other (0.1) (30.3) 0.5 (2.5) 0.1 (4.8) (6.7) (1.5) (1.5) (1.5) (1.5) (6.0) (6.0) (6.0) (6.0) (6.0)

Net income a ttr ibutable to CyrusOne (20 .3 ) (5 .3 ) 0 .2 (1 .1 ) 0 .1 (7 .0 ) (7 .8 ) 3 .9 3 .9 3 .5 5 .2 16 .5 35 .0 48 .2 61 .8 74 .3

Common shares - 22.0 22.7 38.7 38.7 38.7 34.7 38.8 38.9 39.1 39.2 39.0 39.6 40.2 40.8 41.4

Operating Partnership Units - 42.6 42.6 26.6 26.6 26.6 30.6 26.6 26.6 26.6 26.6 26.6 26.6 26.6 26.6 26.6

Tota l Share Equiva lents - 64 .6 65 .3 65 .3 65 .3 65 .3 65 .3 65 .4 65 .5 65 .7 65 .8 65 .6 66 .2 66 .8 67 .4 68 .0

EPS (Common) - ($0 .24) $0 .01 ($0 .03) $0 .00 ($0 .18) ($0 .23) $0 .10 $0 .10 $0 .09 $0 .13 $0 .42 $0 .88 $1 .20 $1 .52 $1 .79

y/y growth - - -121.4% -72.6% -107.2% 206.4% -6.5% 1053.0% -453.9% 3349.6% -172.9% -288.4% 108.6% 35.7% 26.4% 18.3%

Dividend Declared/shr - $0.64 $0.21 $0.21 $0.21 $0.21 $0.84 $0.32 $0.32 $0.32 $0.32 $1.26 $1.46 $1.60 $1.74 $1.88

y/y growth - - 31.3% 31.3% 31.3% 31.3% 31.3% 50.0% 50.0% 50.0% 50.0% 50.0% 16.0% 9.8% 8.5% 7.9%

AFFO Payout Ratio - 57.1% 49.8% 54.2% 47.1% 46.0% 49.1% 66.4% 66.1% 65.6% 61.5% 64.8% 65.0% 65.0% 65.0% 65.0%

As a % of Revenue

NOI Margin 65.6% 64.6% 64.3% 61.1% 61.1% 63.2% 62.4% 62.2% 60.4% 59.6% 60.0% 60.5% 60.5% 60.4% 60.4% 60.3%

Operations and Support Expense 46.6% 47.6% 46.2% 50.1% 50.2% 48.7% 48.8% 48.2% 49.9% 50.6% 50.2% 49.7% 49.8% 50.0% 50.2% 50.4%

EBITDA Margin 52.2% 52.6% 53.8% 49.9% 49.8% 51.3% 51.2% 51.8% 50.1% 49.4% 49.8% 50.3% 50.2% 50.0% 49.8% 49.6%

Depreciation and Amortization 33.2% 36.1% 35.6% 36.5% 35.4% 35.2% 35.7% 34.6% 33.4% 33.0% 32.2% 33.3% 30.4% 27.8% 26.0% 24.7%

EBIT Margin 7.4% 4.4% 15.2% 9.1% 11.3% 12.9% 12.1% 13.7% 13.2% 12.9% 14.1% 13.5% 16.8% 19.4% 21.3% 22.5%

EBT Margin -11.5% -12.6% 1.4% -4.0% 0.7% -13.2% -4.0% 3.1% 2.9% 2.4% 4.0% 3.1% 7.2% 9.1% 10.8% 12.2%

Tax Rate 20.0% -6.9% 36.4% -9.1% 66.7% -2.6% -10.7% 10.9% 11.0% 13.1% 7.5% 10.2% 6.4% 4.5% 3.5% 2.8%

NI to common Margin -9.2% -2.0% 0.3% -1.3% 0.1% -8.1% -2.4% 4.4% 4.2% 3.6% 5.2% 4.4% 8.1% 9.9% 11.5% 12.9%


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CyrusOne Balance Sheet

($mn) Mar . 1Q June 2Q Sept. 3Q Dec . 4Q Mar . 1Q June 2Q Sept. 3Q Dec . 4Q


ASSETS

Net investment in r ea l esta te 706 .9 883 .8 924 .8 959 .1 1 ,016 .2 1 ,051 .4 1 ,051 .4 1 ,044 .9 1 ,042 .8 1 ,122 .6 1 ,156 .3 1 ,156 .3 1 ,240 .1 1 ,290 .9 1 ,309 .4 1 ,296 .1

Cash and cash equivalents 16.5 148.8 125.2 49.3 30.4 36.5 36.5 201.8 142.7 171.4 81.4 81.4 22.9 47.6 59.6 74.0

Rent and other receivables 33.2 41.2 42.4 61.5 59.1 60.9 60.9 46.5 54.7 57.4 63.2 63.2 68.4 77.3 85.1 91.7

Restricted cash 6.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Goodwill 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2 276.2

Intangible assets, net 102.6 85.9 81.7 77.4 73.2 68.9 68.9 64.9 60.9 56.9 52.9 52.9 36.9 20.9 4.9 (11.1)

Due from affiliates 2.2 0.6 0.9 0.5 1.3 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8

Other assets 67.0 70.3 76.9 82.1 81.6 91.8 91.8 89.0 92.8 93.8 100.9 100.9 109.2 123.4 135.9 146.4

Tota l assets 1 ,210 .9 1 ,506 .8 1 ,528 .1 1 ,506 .1 1 ,538 .0 1 ,586 .5 1 ,586 .5 1 ,724 .1 1 ,670 .9 1 ,779 .1 1 ,731 .6 1 ,731 .6 1 ,754 .4 1 ,837 .2 1 ,871 .9 1 ,874 .1

LIABILIT IES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses 37.1 66.8 88.8 83.9 100.2 69.9 69.9 112.0 89.2 108.8 92.6 92.6 99.5 113.0 124.9 135.0

Deferred revenue 52.8 55.9 64.8 66.7 66.1 65.7 65.7 66.5 67.2 68.0 68.7 68.7 71.7 74.7 77.7 80.7

Due to affiliates 2.9 8.5 10.8 7.4 7.4 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3

Capital lease obligations 32.2 16.7 15.5 15.0 14.2 13.4 13.4 13.4 13.4 13.4 13.4 13.4 13.4 13.4 13.4 13.4

Long-term debt 525.0 525.0 525.0 525.0 555.0 659.8 659.8 759.8 759.8 859.8 859.8 859.8 959.8 1,109.8 1,209.8 1,259.8

Related party notes payable 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0

Other financing arrangements 60.8 56.3 56.4 57.1 55.1 53.4 53.4 53.4 53.4 53.4 53.4 53.4 53.4 53.4 53.4 53.4

Tota l l iabilit ies 710 .8 729 .2 761 .3 755 .1 798 .0 869 .5 869 .5 1 ,012 .3 990 .3 1 ,110 .7 1 ,095 .2 1 ,095 .2 1 ,205 .1 1 ,371 .6 1 ,486 .5 1 ,550 .6

Tota l stockholders ' equity 500 .1 322 .0 319 .6 478 .8 473 .3 460 .7 460 .7 455 .4 424 .3 412 .1 380 .1 380 .1 293 .0 209 .3 129 .2 67 .2

Non-controlling interest 0.0 455.6 447.2 272.2 266.7 256.3 256.3 256.3 256.3 256.3 256.3 256.3 256.3 256.3 256.3 256.3

Tota l l iabilit ies and stockholders ' equity 1 ,210 .9 1 ,506 .8 1 ,528 .1 1 ,506 .1 1 ,538 .0 1 ,586 .5 1 ,586 .5 1 ,724 .1 1 ,670 .9 1 ,779 .1 1 ,731 .6 1 ,731 .6 1 ,754 .4 1 ,837 .2 1 ,871 .9 1 ,874 .1


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CyrusOne FFO

($thou) Mar . 1Q June 2Q Sept. 3Q Dec . 4Q Mar . 1Q June 2Q Sept. 3Q Dec . 4Q


Company Provided FFO

Net income (20.4) (35.8) 0.7 (3.6) 0.2 (11.8) (14.5) 2.4 2.4 2.0 3.7 10.5 29.0 42.2 55.8 68.3

Real estate depreciation and amortization 52.9 70.6 22.2 24.1 24.5 25.1 95.9 25.4 25.7 26.4 26.9 104.4 112.4 119.1 125.4 131.1

Amortization of customer relationship intangibles 16.0 16.8 4.2 4.3 4.2 4.2 16.9 4.2 4.2 4.2 4.2 16.8 16.8 16.8 16.8 16.8

Real estate impairments 11.7 2.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Customer relationship intangibles impairments 1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gain on sale of real estate improvements (0.1) 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

FFO 61 .6 54 .6 27 .1 24 .8 28 .9 17 .5 98 .3 32 .0 32 .3 32 .6 34 .8 131 .7 158 .2 178 .1 198 .0 216 .2

Transaction costs 5.7 1.4 0.1 0.8 0.0 0.1 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other 0.0 22.7 0.0 0.0 0.0 13.6 13.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Normalized FFO (Company definit ion) 67 .3 78 .7 27 .2 25 .6 28 .9 31 .2 112 .9 32 .0 32 .3 32 .6 34 .8 131 .7 158 .2 178 .1 198 .0 216 .2

y/y growth - 16.9% 58.1% 60.0% 32.0% 32.2% 43.5% 17.7% 26.2% 12.8% 11.5% 16.7% 20.1% 12.6% 11.2% 9.2%

Normalized FFO per share - $1 .22 $0 .42 $0 .39 $0 .44 $0 .48 $1 .73 $0 .49 $0 .49 $0 .50 $0 .53 $2 .01 $2 .39 $2 .67 $2 .94 $3 .18

y/y growth - - 56.2% 58.6% 30.8% 30.8% - 17.5% 25.6% 12.1% 10.5% 16.0% 19.1% 11.6% 10.2% 8.2%

Company Provided Adjusted FFO

Normalized FFO 67.3 78.7 27.2 25.6 28.9 31.2 112.9 32.0 32.3 32.6 34.8 131.7 158.2 178.1 198.0 216.2

Amortization of deferred financing costs 0.3 4.1 0.9 0.9 0.9 0.7 3.4 1.0 1.0 1.0 1.0 4.0 4.0 4.0 4.0 4.0

Stock-based compensation 3.4 6.3 2.2 2.8 2.6 2.7 10.3 3.1 3.2 3.4 3.5 13.2 12.9 13.4 13.4 14.4

Non-real estate depreciation 4.5 7.8 1.2 1.4 1.2 1.4 5.2 1.2 1.1 1.0 0.9 4.2 1.5 (0.6) (2.9) (5.4)

Deferred revenue/Straight-line rent adjustments (8.3) (13.9) (3.0) (3.7) (1.5) (2.3) (10.5) (2.5) (2.5) (2.5) (2.5) (10.0) (10.0) (10.0) (10.0) (10.0)

Leasing commissions (4.4) (6.8) (0.6) (1.4) (0.9) (2.9) (5.8) (2.0) (2.0) (2.0) (2.0) (8.0) (9.1) (10.3) (11.4) (12.3)

Recurring capital expenditures (3.9) (4.2) (0.4) (0.3) (2.1) (1.0) (3.8) (1.8) (1.9) (1.9) (2.0) (7.5) (8.6) (9.7) (10.7) (11.5)

Corporate income tax (benefit)/expense (5.8) 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0

AFFO 53 .1 72 .4 27 .5 25 .3 29 .1 29 .8 111 .7 31 .0 31 .2 31 .6 33 .7 127 .5 148 .9 164 .9 180 .5 196 .4

y/y growth - 36.3% 57.1% 70.9% 50.8% 43.3% 54.3% 12.8% 23.5% 8.4% 13.1% 14.2% 16.7% 10.7% 9.4% 8.9%

AFFO per share - $1 .12 $0 .42 $0 .39 $0 .45 $0 .46 $1 .71 $0 .47 $0 .48 $0 .48 $0 .51 $1 .94 $2 .25 $2 .47 $2 .68 $2 .89

y/y growth - - 55.2% 69.5% 49.5% 41.8% 52.8% 12.6% 23.0% 7.7% 12.1% 13.6% 15.7% 9.8% 8.5% 7.9%


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CyrusOne DCF

($mn) Term ina l

2014 2015E 2016E 2017E 2018E 2019E Va lue

Revenue $331 $377 $430 $487 $536 $577

EBITDA 169 189 216 243 267 287 4,300

CFO 111 151 153 168 187 221

Capex 284 230 214 186 158 129

Free Cash Flow (173) (79) (62) (18) 29 92

ADD BACK: Interest Expense 41 52 58 67 72 75

Unlevered Free Cash Flow (132) (28) (4) 48 102 167

Year 0.0 0.5 1.5 2.5 3.5 4.5 4.5

Present Value Discount Factor 1.00 1.04 1.14 1.24 1.36 1.48 1.48

Present Va lue of Free Cash Flow (132) (27) (4) 39 75 113 2,904

Today

Total PV of Free Cash Flow $197

Percentage of DCF 6.3%

Terminal Value $2,904

Percentage of DCF 93.7%

Sum of DCFs $3,101

Net Debt and Preferred Stock $637

Net Equity Value $2,464

Other/Cash $0

Private market value $2,464

less 10% public / private discount ($246)

Public market value $2,218

Shares Outstanding 65.3

Fa ir Va lue Pr ice $33.99

Current Price $30.16

WACC 9.1%

Terminal EBITDA Multiple 15.0

Risk Free Rate 2.5%

Beta 1.0

Equity Premium 10.2%

Cost of Debt 6.0%

Percentage of Capital 50.0%

Cost of Equity 12.2%

Percentage of Capital 50.0%

Valuation Summary

Terminal Multiple 11.0 12.0 13.0 14.0 15.0 16.0 17.0 18.0 19.0

Discount Rate 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1%

Sum of PV of Free Cash Flow $197 $197 $197 $197 $197 $197 $197 $197 $197

PV of Terminal Value $2,130 $2,323 $2,517 $2,710 $2,904 $3,098 $3,291 $3,485 $3,679

Sum of DCFs $2,327 $2,520 $2,714 $2,907 $3,101 $3,295 $3,488 $3,682 $3,875

less net debt $637 $637 $637 $637 $637 $637 $637 $637 $637

Net Equity Value $1,690 $1,883 $2,077 $2,271 $2,464 $2,658 $2,851 $3,045 $3,239

Other/Cash $0 $0 $0 $0 $0 $0 $0 $0 $0

Private market value $1,690 $1,883 $2,077 $2,271 $2,464 $2,658 $2,851 $3,045 $3,239

less 10% public / private discount ($169) ($188) ($208) ($227) ($246) ($266) ($285) ($305) ($324)

Public market value $1,521 $1,695 $1,869 $2,044 $2,218 $2,392 $2,566 $2,741 $2,915

Diluted Shares Outstanding 65 65 65 65 65 65 65 65 65

Per Share $23.31 $25.98 $28.65 $31.32 $33.99 $36.66 $39.33 $42.00 $44.67

Enterprise Value $2,158 $2,332 $2,506 $2,680 $2,855 $3,029 $3,203 $3,377 $3,552

EV / 2015E Revenue 5.7x 6.2x 6.7x 7.1x 7.6x 8.0x 8.5x 9.0x 9.4x

EV / 2015E EBITDA 11.4x 12.3x 13.2x 14.2x 15.1x 16.0x 16.9x 17.8x 18.8x


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Comparative Analysis – Data Services REITs

Div idend Div idend

C ompany Ticker Rat ing P rice Mkt C ap E V FFO /Sh Yield Pay out Total Debt / Net Debt / 2014 2015

2/18/2015 $ MM $ MM C 2015E C 2016E C 2015E C 2016E C 2015E C 2016E C 2015E C 2016E C 2015E C 2016E C 2015E C 2016E C 2015E C 2016E C 2015E (% of AFFO ) Total C ap E B ITDA YTD

Towers

American Tower AMT * 1 $96.20 38,662 53,595 4,627 5,086 2,949 3,254 $4.91 $5.55 $5.03 $5.77 18.2x 16.5x 19.6x 17.3x 19.1x 16.7x 12.7% 10.8% 14.6% 10.9% 1.8% 34.0% 79.3% 5.4x 23.8% -2.7%

Crown Castle CCI * 1 $88.20 30,352 41,949 3,753 3,849 2,157 2,245 $4.36 $4.56 $4.38 $4.85 19.5x 18.7x 20.2x 19.3x 20.1x 18.2x 1.7% 0.9% 7.2% 4.5% 3.7% 74.9% 67.5% 5.3x 7.2% 12.1%

SBA Coms. SBAC * 1 $122.17 15,824 23,757 1,686 1,763 1,108 1,196 $5.61 $6.31 $5.81 $6.55 21.4x 19.9x 21.8x 19.4x 21.0x 18.6x 11.1% 12.1% 22.8% 13.3% NA NA 101.8% 7.8x 23.3% 10.3%

Mean 19 .7x 18 .3x 20 .5x 18 .7x 20 .1x 17 .8x 8 .5% 7.9% 14 .9% 9.6% 2.7% 54 .5% 82 .9% 6.2x 18 .1% 6.6%

Median 19.5x 18.7x 20.2x 19.3x 20.1x 18.2x 11.1% 10.8% 14.6% 10.9% 2.7% 54.5% 79.3% 5.4x 23.3% 10.3%

REIT Co-lo

CoreSite COR * 2 $48.52 2,288 2,711 317 364 156 180 $2.59 $2.94 $2.24 $2.58 17.4x 15.0x 18.7x 16.5x 21.7x 18.8x 16.5% 17.1% 16.8% 26.7% 3.6% 77.8% 49.7% 2.1x 21.3% 24.3%

CyrusOne CONE * 1 $30.16 1,968 2,605 377 430 189 216 $2.01 $2.39 $1.94 $2.25 13.8x 12.1x 15.0x 12.6x 15.5x 13.4x 13.8% 11.8% 16.0% 13.6% 4.2% 64.8% 59.4% 3.6x NA 9.5%

Digital Realty Trust DLR * 2 $67.58 9,369 15,075 1,656 1,733 969 1,017 $5.03 $5.09 $3.74 $3.86 15.6x 14.8x 13.4x 13.3x 18.1x 17.5x 2.5% 3.5% 1.3% -1.5% 5.0% 89.9% 54.6% 4.7x 35.0% 1.9%

Dupont Fabros DFT * 1 $32.06 2,637 3,984 432 482 289 322 $2.51 $2.80 $2.64 $2.94 13.8x 12.4x 12.8x 11.4x 12.2x 10.9x 3.4% 5.1% 4.7% 5.0% 5.3% 64.9% 47.9% 3.5x 34.5% -3.5%

Equinix EQIX * 2 $228.91 13,104 16,549 2,638 2,925 1,221 1,361 $11.44 $13.59 $13.36 $15.48 13.5x 12.2x 20.0x 16.8x 17.1x 14.8x 8.4% 9.9% 8.1% -2.0% 1.7% 29.7% 58.0% 3.0x 32.8% 1.0%

QTS Realty Trust QTS NR $37.80 1,409 1,995 260 302 120 144 $2.32 $2.67 $2.31 $2.74 16.6x 13.9x 16.3x 14.2x 16.3x 13.8x 20.1% 25.1% 17.0% 16.9% 3.7% 60.9% 60.6% 0.6x NA 11.7%

Mean 15 .1x 13 .4x 16 .0x 14 .1x 16 .8x 14 .9x 8 .9% 9.5% 9.4% 8.3% 4.0% 65 .4% 53 .9% 3.4x 30 .9% 6.6%

Median 14.7x 13.6x 14.2x 12.9x 16.8x 15.5x 8.6% 8.5% 10.4% 9.3% 4.6% 71.3% 52.2% 3.5x 34.5% 5.7%

Market Indices

S&P 500 .SPX 2,100 1,168 1,159 220 233 NA NA NA NA 10.2x 9.3x NM NM NM NM 4.9% -81.9% NA NA 2.1% NA NA NA 11.4% 2.0%

1 = Outperform, 2 = Market Perform, 3 = Underperform, NR = Not Rated

* Cowen covered company

B ASIC INFO RMATIO N VAL UATIO N 2015E Growth

AFFO /ShP/FFOFFOE B ITDARev enue

B ASIC FINANC IAL S

AFFO

Performance

E V/E B ITDA P/AFFO

L ev erage (L Q A)

Sales E B ITDA

Source: Company data, Thomson One, Cowen and Company estimates

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Valuation Methodology And RisksValuation Methodology

Telecom Services:Our valuation methodology consists of an absolute and relative value approach.We arrive at a fair value utilizing a five-year discounted cash flow (DCF) and whenappropriate a segmented sum-of-parts (SOP) analysis. Our relative value approachtakes into account EV/EBITDA, P/FCF, and P/E and, when applicable, P/AFFO anddividend yield.

Investment Risks

Telecom Services:Risks Include: (1) many companies within Telecom Services are highly regulatedwhere a change in rules could lead to unfavorable conditions; (2) rapidly changing/disruptive technology, new product/service offerings, and evolving industry/technologystandards could have an impact on demand and/or pricing; and (3) deterioration inthe macro environment both domestically and internationally could lead to a reductionin demand and a consequent impact on valuation multiples.

Risks To The Price Target

Risks for CyrusOne include: 1) a likely secondary-offering by its largest shareholdermay limit near-term upside until its completed, 2) the co-location industry in whichCyrusOne operates is competitive with a growing number of competitors, and 3) thedata center stocks are particularly susceptible to fluctuations in interest rates in whichrising/falling rates may have a negative/positive impact on the stock price.

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AddendumAnalyst CertificationEach author of this research report hereby certifies that (i) the views expressed in the research report accurately reflect his or her personal views about any and all of the subjectsecurities or issuers, and (ii) no part of his or her compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views expressed in this report.

Important DisclosuresThis report constitutes a compendium report (covers six or more subject companies). As such, Cowen and Company, LLC chooses to provide specific disclosures for the companiesmentioned by reference. To access current disclosures for the all companies in this report, clients should refer to https://cowen.bluematrix.com/sellside/Disclosures.action orcontact your Cowen and Company, LLC representative for additional information.Cowen and Company, LLC compensates research analysts for activities and services intended to benefit the firm's investor clients. Individual compensation determinations forresearch analysts, including the author(s) of this report, are based on a variety of factors, including the overall profitability of the firm and the total revenue derived from all sources,including revenues from investment banking. Cowen and Company, LLC does not compensate research analysts based on specific investment banking transactions.

DisclaimerThis research is for our clients only. Our research is disseminated primarily electronically and, in some cases, in printed form. Research distributed electronically is availablesimultaneously to all Cowen and Company, LLC clients. All published research can be obtained on the Firm's client website, https://cowenlibrary.bluematrix.com/client/library.jsp.Further information on any of the above securities may be obtained from our offices. This report is published solely for information purposes, and is not to be construed as an offerto sell or the solicitation of an offer to buy any security in any state where such an offer or solicitation would be illegal. Other than disclosures relating to Cowen and Company, LLC,the information herein is based on sources we believe to be reliable but is not guaranteed by us and does not purport to be a complete statement or summary of the available data.Any opinions expressed herein are statements of our judgment on this date and are subject to change without notice.

For important disclosures regarding the companies that are the subject of this research report, please contact Compliance Department, Cowen and Company, LLC, 599 LexingtonAvenue, 20th Floor, New York, NY 10022. In addition, the same important disclosures, with the exception of the valuation methods and risks, are available on the Firm's disclosurewebsite at https://cowen.bluematrix.com/sellside/Disclosures.action.

Price Targets: Cowen and Company, LLC assigns price targets on all covered companies unless noted otherwise. The price target for an issuer's stock represents the value thatthe analyst reasonably expects the stock to reach over a performance period of twelve months. The price targets in this report should be considered in the context of all priorpublished Cowen and Company, LLC research reports (including the disclosures in any such report or on the Firm's disclosure website), which may or may not include pricetargets, as well as developments relating to the issuer, its industry and the financial markets. For price target valuation methodology and risks associated with the achievement ofany given price target, please see the analyst's research report publishing such targets.

Notice to UK Investors: This publication is produced by Cowen and Company, LLC which is regulated in the United States by FINRA. It is to be communicated only to personsof a kind described in Articles 19 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. It must not be further transmitted to any other personwithout our consent.

Copyright, User Agreement and other general information related to this report

© 2015 Cowen and Company, LLC. Member NYSE, FINRA and SIPC. All rights reserved. This research report is prepared for the exclusive use of Cowen clients and may not bereproduced, displayed, modified, distributed, transmitted or disclosed, in whole or in part, or in any form or manner, to others outside your organization without the express priorwritten consent of Cowen. Cowen research reports are distributed simultaneously to all clients eligible to receive such research reports. Any unauthorized use or disclosure isprohibited. Receipt and/or review of this research constitutes your agreement not to reproduce, display, modify, distribute, transmit, or disclose to others outside your organizationthe contents, opinions, conclusion, or information contained in this report (including any investment recommendations, estimates or price targets). All Cowen trademarks displayedin this report are owned by Cowen and may not be used without its prior written consent.

Cowen and Company, LLC. New York (646) 562-1000 Boston (617) 946-3700 San Francisco (415) 646-7200 Chicago (312) 577-2240 Cleveland (440) 331-3531 Atlanta(866) 544-7009 London (affiliate) 44-207-071-7500

COWEN AND COMPANY RATING DEFINITIONS

Cowen and Company Rating System effective May 25, 2013

Outperform (1): The stock is expected to achieve a total positive return of at least 15% over the next 12 months

Market Perform (2): The stock is expected to have a total return that falls between the parameters of an Outperform and Underperform over the next 12 months

Underperform (3): Stock is expected to achieve a total negative return of at least 10% over the next 12 months

Assumption: The expected total return calculation includes anticipated dividend yield

Cowen and Company Rating System until May 25, 2013

Outperform (1): Stock expected to outperform the S&P 500

Neutral (2): Stock expected to perform in line with the S&P 500

Underperform (3): Stock expected to underperform the S&P 500

Assumptions: Time horizon is 12 months; S&P 500 is flat over forecast period

Cowen Securities, formerly known as Dahlman Rose & Company, Rating System until May 25, 2013

Buy – The fundamentals/valuations of the subject company are improving and the investment return is expected to be 5 to 15 percentage points higher than the general marketreturn

Sell – The fundamentals/valuations of the subject company are deteriorating and the investment return is expected to be 5 to 15 percentage points lower than the general marketreturn

Hold – The fundamentals/valuations of the subject company are neither improving nor deteriorating and the investment return is expected to be in line with the general marketreturn

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https://cowen.bluematrix.com/sellside/Disclosures.action

https://cowenlibrary.bluematrix.com/client/library.jsp

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Cowen And Company Rating DefinitionsDistribution of Ratings/Investment Banking Services (IB) as of 12/31/14

Rating Count Ratings Distribution Count IB Services/Past 12 Months

Buy (a) 461 60.50% 109 23.64%

Hold (b) 288 37.80% 14 4.86%

Sell (c) 13 1.71% 0 0.00%

(a) Corresponds to "Outperform" rated stocks as defined in Cowen and Company, LLC's rating definitions. (b) Corresponds to "Market Perform" as defined in Cowen and Company,LLC's ratings definitions. (c) Corresponds to "Underperform" as defined in Cowen and Company, LLC's ratings definitions.

Note: "Buy", "Hold" and "Sell" are not terms that Cowen and Company, LLC uses in its ratings system and should not be construed as investment options. Rather, these ratingsterms are used illustratively to comply with FINRA and NYSE regulations.

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Points Of ContactAnalyst Profiles

Colby Synesael

New York

646.562.1355

[email protected]

Colby Synesael is a senior analystcovering telecom & data services. Hejoined Cowen in 2010 and has been onWall Street since 2001.

Jonathan Charbonneau

New York

646.562.1356

[email protected]

Jonathan Charbonneau is an associatecovering telecom & data services. Hepreviously worked at Kaufman Bros. andMerriman Curhan Ford.

Gregory Williams, CFA

New York

646.562.1367

[email protected]

Gregory Williams is an associatecovering telecom & data services. Heworked a combined twelve years atAT&T, J.P. Morgan and Sidoti & Co.

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