Public Equity Performance and Valuation in Hosting As of 12/31/14

Public Equity Performance

• After reaching all time highs at the end of November and early December, both the S&P 500 and NASDAQ ended the month off 0.4% and 1.2%, respectively. That being said, since the end of last year, last quarter, and last month, the average colocation and hosting equity has outperformed both the S&P 500 and the NASDAQ.
• For 2014, DLR was been the best performing publicly traded colocation/hosting equity with a share price appreciation of 35.0% versus 26.2% for the average colocation/hosting equity, 11.4% for the S&P 500 and 13.4% for the NASDAQ.
• For the 4^th Quarter of 2014, RAX was the best performing publicly traded colocation/hosting equity with a share price appreciation of 22.0% versus 12.9% for the average colocation/hosting equity, 4.4% for the S&P 500, and 5.4% for the NASDAQ.
• For the Month of December, 2014, QTS was been the best performing publicly traded colocation/hosting equity with a share price appreciation of 4.1% versus 0.7% for the average colocation/hosting equity, -0.4% for the S&P 500 and -1.2% for the NASDAQ

Public Equity Valuations as of December 31, 2014

• Market Cap
  • As might be expected of the sector leader, EQIX had the highest market cap in our universe of publicly traded hosting and colocation equities.
• Enterprise Value (EV)
  • As might be expected of the company with the highest market cap, EQIX also had the highest Enterprise Value in our universe of publicly traded hosting and colocation equities.
• EV/Revenue
  • The companies in our coverage universe averaged an EV/LTM Revenue multiple of 6.9x and an EV/LQA Revenue of 6.3x.
  • The companies in our coverage universe had a median EV/LTM Revenue multiple of 7.4x and a median EV/LQA Revenue multiple of 6.8x.
  • With an EV/LTM Revenue multiple of 9.3x and an EV/LQA Revenue multiple of 9.0x, DLR was the most highly valued company in our coverage universe.
  • With an EV/LTM Revenue multiple of 2.4x and an EV/LQA Revenue multiple of 2.3x, INAP was the least valuable company in our coverage universe.
• EV/EBITDA
  • The companies in our coverage universe had an average EV/LTM EBITDA multiple of 14.2x and an EV/LQA EBITDA multiple of 13.4x.
  • The companies in our coverage universe had a median EV/LTM EBITDA multiple of 14.0x and a median EV/LQA EBITDA multiple of 13.5x.
  • With an EV/LTM EBITDA multiple of 18.3x and an EV/LQA EBITDA multiple of 17.3x, COR was the most highly valued company in our coverage universe.
  • With an EV/LTM EBITDA multiple of 10.8x and an EV/LQA EBITDA multiple of 9.8x, INAP was the least valuable company in our coverage universe.
• Leverage
  • The companies in our coverage universe averaged Total Debt/LTM EBITDA of 3.7x.
  • The companies in our coverage universe had a median Total Debt/LTM EBITDA of 3.8x.
  • With Total Debt/LTM EBIDA of 6.4x, COR was the most highly levered company in our coverage universe.
  • With Total Debt/LTM EBITDA of 0.2x, RAX was the least levered company in our coverage universe.

Note:

• EV = Equity Value + Total Debt – Cash
• Net Debt = Total Debt – Cash
• LTM – Last Twelve Months
• LQA – Last Quarter Annualized