Investment in CyrusOne

On January 24, 2013, we completed the IPO of CyrusOne, our former Data Center Colocation segment. As of that date, we no longer control CyrusOne's operations.

Commencing January 17, 2014, we are permitted to exchange the partnership units of CyrusOne LP into cash or shares of common stock of CyrusOne, as determined by CyrusOne, on a one-for-one basis based upon the fair value of a share of CyrusOne common stock, subject to certain limitations which restricted the volume of shares we are permitted to sell. The registration statement filed by CyrusOne on March 24, 2014 became effective on April 4, 2014 and eliminated all prior limitations restricting the volume of shares we are allowed to sell.

In the second quarter of 2014, we sold 16.0 million operating partnership units of CyrusOne LP to CyrusOne, Inc. at a price of $22.26 per unit. The sale generated proceeds of $355.9 million and resulted in a gain of $192.8 million.

In the second quarter of 2015, we sold 14.3 million operating partnership units of CyrusOne LP to CyrusOne, Inc. at a price of $29.88 per unit. The sale generated proceeds of $426.0 million and resulted in a gain of $295.2 million.

On July 1, 2015, we sold 6.0 million operating partnership units of CyrusOne LP to CyrusOne, Inc. at a price of $28.41 per unit. The sale generated proceeds of $170.3 million and resulted in a gain of $117.7 million that was recognized in the third quarter of 2015.

As of September 30, 2015, we effectively owned 11% of CyrusOne, which was held in the form of 1.9 million shares of registered common stock of CyrusOne Inc. and 6.3 million economically equivalent partnership units in CyrusOne LP. We account for this investment using the equity method. As of September 30, 2015, the fair value of this investment was $269.0 million based on the quoted market price of CyrusOne's common stock, which is considered a Level 1 measurement in the fair value hierarchy. For the three and nine months ended September 30, 2015, our equity method share of CyrusOne's net loss was $0.8 million and $5.2 million, respectively. For the three months ended September 30, 2014, our equity method share of CyrusOne's net income was nominal. For the nine months ended September 30, 2014, our equity method share of CyrusOne's net loss was $1.9 million.

Summarized financial information for CyrusOne is as follows:



	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(dollars in millions)	2015			2014		2015			2014
Revenue	$	111.2		$	84.8	$	286.0		$	244.0
Operating income	7.5			9.6		11.7			28.8
Net income (loss)	(5.3		)	0.2		(19.0		)	(2.7		)

Transactions with CyrusOne

Revenues - The Company records revenue from CyrusOne under contractual service arrangements which include, among others, providing services such as fiber transport, network support, service calls, monitoring and management, storage and back-up, and IT systems support.

Operating Expenses - We lease data center and office space from CyrusOne at certain locations in the Cincinnati area under operating leases and are also billed for other services provided by CyrusOne under contractual service arrangements. In the normal course of business, the Company also provides certain administrative services to CyrusOne which are billed based on agreed-upon rates.

Revenues and operating costs and expenses from transactions with CyrusOne were as follows:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(dollars in millions)	2015			2014			2015			2014
Revenue:
Services provided to CyrusOne	$	0.3		$	0.4		$	1.0		$	1.3

Operating costs and expenses:
Charges for services provided by CyrusOne	2.6			2.2			7.6			6.8
Administrative services provided to CyrusOne	(0.1		)	(0.1		)	(0.3		)	(0.3		)
Total operating costs and expenses	$	2.5		$	2.1		$	7.3		$	6.5

Dividends of $4.5 million were received in the third quarter of 2015. Additionally, on August 5, 2015, CyrusOne declared dividends of $0.315 per share payable on its common shares and CyrusOne LP partnership units. This dividend was paid on October 15, 2015 to holders of record as of September 25, 2015.

In addition to the agreements noted above, the Company entered into a tax sharing agreement with CyrusOne. Under the terms of the agreement, CyrusOne will reimburse the Company for the Texas Margin Tax liability that CyrusOne would have incurred if they filed a Texas Margin Tax return separate from the consolidated filing. The agreement will remain in effect until the Texas Margin Tax return for the period ending December 31, 2014 is filed. As of September 30, 2015 and December 31, 2014, the receivable related to this agreement totaled $0.7 million and $1.7 million, respectively. These balances are included in Receivable from CyrusOne.

At September 30, 2015 and December 31, 2014, amounts receivable from and payable to CyrusOne were as follows:



	September 30,		December 31,
(dollars in millions)	2015		2014
Accounts receivable	$	0.7	$	1.7
Dividends receivable	2.7		6.0
Receivable from CyrusOne	$	3.4	$	7.7

Accounts payable	$	1.6	$	0.4
Payable to CyrusOne	$	1.6	$	0.4