Equinix, Inc. (Nasdaq:EQIX), a provider of global data center
services, today reported quarterly results for the quarter ended
September 30, 2010.
Revenues were $330.3 million for the third quarter, a 12%
increase over the previous quarter and a 45% increase over the same
quarter last year. This result included $57.5 million in revenues
from Switch and Data for the quarter. Recurring revenues,
consisting primarily of colocation, interconnection and managed
services were $314.7 million for the third quarter, a 12% increase
over the previous quarter and a 45% increase over the same quarter
last year. Non-recurring revenues were $15.6 million in the
quarter.
“Equinix continues to see solid demand for global data center
services and our investments in expansion capacity have us
well-positioned heading into 2011,” said Steve Smith, CEO and
President of Equinix. “The fundamentals of our business are
strong and we have a significant opportunity for growth in targeted
ecosystems including network, electronic trading, cloud and
mobility.”
Cost of revenues were $185.5 million for the third quarter, a
14% increase from the previous quarter and a 47% increase over the
same quarter last year. Cost of revenues, excluding depreciation,
amortization, accretion and stock-based compensation of $68.9
million, were $116.6 million for the third quarter, a 12% increase
over the previous quarter and a 42% increase over the same quarter
last year. Cash gross margins, defined as gross profit before
depreciation, amortization, accretion and stock-based compensation,
divided by revenues, for the quarter were 65%, unchanged from the
previous quarter and up from 64% for the same quarter last
year.
Selling, general and administrative expenses were $89.8 million
for the third quarter, an 8% increase over the previous quarter and
a 65% increase over the same quarter last year. Selling, general
and administrative expenses, excluding depreciation, amortization
and stock-based compensation of $22.5 million, were $67.3 million
for the third quarter, a 12% increase over the previous quarter and
a 70% increase over the same quarter last year.
Restructuring charges were $1.9 million for the third quarter,
which were primarily related to revised sublease assumptions
related to an excess space lease in the New York metro area the
Company previously decided to abandon.
Net income for the third quarter was $11.2 million. This
represents a basic and diluted net income per share of $0.24 based
on a weighted average share count of 45.7 million and 46.7 million,
respectively, for the third quarter of 2010.
Adjusted EBITDA, defined as income or loss from operations
before depreciation, amortization, accretion, stock-based
compensation, restructuring charges and acquisition costs for the
third quarter, was $146.5 million, an increase of 11% over the
previous quarter and a 38% increase over the same quarter last
year.
Capital expenditures, defined as gross capital expenditures less
the net change in accrued property, plant and equipment in the
third quarter, were $143.9 million, of which $103.2 million was
attributed to expansion capital expenditures and $40.7 million was
attributed to ongoing capital expenditures.
The Company generated cash from operating activities of $113.3
million for the third quarter as compared to $56.9 million in the
previous quarter and $107.5 million the same quarter last year.
Cash used in investing activities was $259.5 million in the third
quarter as compared to $327.5 million in the previous quarter and
$260.5 million for the same quarter last year. Cash provided by
financing activities was $18.1 million, which was primarily related
to the proceeds from employee equity awards and draw down of
certain loans payable.
As of September 30, 2010, the Company’s cash, cash equivalents
and investments were $715.4 million, as compared to $722.0 million
as of June 30, 2010.
Company Metrics and Q3 Results Presentation
- A presentation to accompany Equinix’s
Q3 Results conference call, as well as the Company’s Non-Financial
Metrics tracking sheet, have been posted on the Investors section
of Equinix’s website at www.equinix.com/investors
Business Outlook
For the full year of 2010, total revenues are expected to be in
the range of $1,216.0 to $1,218.0 million. Total year cash gross
margins are expected to be 65%. Cash selling, general and
administrative expenses are expected to approximate $250.0 million.
Adjusted EBITDA for the year is expected to be approximately $542.0
million. Capital expenditures for 2010 are expected to be in the
range of $560.0 to $580.0 million, comprised of approximately
$110.0 million of ongoing capital expenditures and $450.0 to $470.0
million for expansion capital expenditures.
For the full year of 2011, total revenues are expected to be
greater than $1,500.0 million. Adjusted EBITDA for the year is
expected to be greater than $675.0 million. Total capital
expenditures for 2011 are expected to be approximately $400.0
million.
The Company will discuss its results and guidance on its
quarterly conference call on Tuesday, October 26, 2010, at 5:30
p.m. ET (2:30 p.m. PT). A presentation to accompany the call will
be available on the Company’s website at www.equinix.com/investors
for thirty days. To hear the conference call live, please dial
210-234-8004 (domestic and international) and reference the
passcode (EQIX). A simultaneous live Webcast of the call will also
be available at www.equinix.com/investors
A replay of the call will be available beginning on Tuesday,
October 26, 2010 at 7:30 p.m. ET (4:30 p.m. PT) through November
26, 2010 by dialing 203-369-1262 and referencing the passcode
(2010). In addition, the webcast will be available on the company's
website at www.equinix.com/investors over the same time period. No
password is required for the webcast.
About Equinix
Equinix, Inc. (Nasdaq:EQIX) provides global data center services
that ensure the vitality of the information-driven world. Global
enterprises, cloud, content and financial companies, and more than
600 network service providers rely upon Equinix to protect and
connect their most valued information assets. Equinix operates 90
International Business Exchange™ (IBX®) and partner data centers
across 35 metro areas in North America, Europe and Asia-Pacific.
Learn more at: www.equinix.com
Non-GAAP Financial Measures
Equinix provides all information required in accordance with
generally accepted accounting principles (GAAP), but it believes
that evaluating its ongoing operating results may be difficult if
limited to reviewing only GAAP financial measures. Accordingly,
Equinix uses non-GAAP financial measures, such as adjusted EBITDA,
cash cost of revenues, cash gross margins, cash operating expenses
(also known as cash selling, general and administrative expenses or
cash SG&A), adjusted EBITDA margins, free cash flow and
adjusted free cash flow to evaluate its operations. In presenting
these non-GAAP financial measures, Equinix excludes certain items
that it believes are not good indicators of the Company's current
or future operating performance. These items are depreciation,
amortization, accretion of asset retirement obligations and accrued
restructuring charges, stock-based compensation, restructuring
charges and acquisition costs. Legislative and regulatory
requirements encourage use of and emphasis on GAAP financial
metrics and require companies to explain why non-GAAP financial
metrics are relevant to management and investors. Equinix excludes
these items in order for Equinix's lenders, investors, and industry
analysts who review and report on the Company, to better evaluate
the Company's operating performance and cash spending levels
relative to its industry sector and competitors.
Equinix excludes depreciation expense as these charges primarily
relate to the initial construction costs of our IBX centers and do
not reflect our current or future cash spending levels to support
our business. Our IBX centers are long-lived assets, and have an
economic life greater than 10 years. The construction costs of our
IBX centers do not recur and future capital expenditures remain
minor relative to our initial investment. This is a trend we expect
to continue. In addition, depreciation is also based on the
estimated useful lives of our IBX centers. These estimates could
vary from actual performance of the asset, are based on historic
costs incurred to build out our IBX centers, and are not indicative
of current or expected future capital expenditures. Therefore,
Equinix excludes depreciation from its operating results when
evaluating its operations.
In addition, in presenting the non-GAAP financial measures,
Equinix excludes amortization expense related to certain intangible
assets, as it represents a cost that may not recur and is not a
good indicator of the Company's current or future operating
performance. Equinix excludes accretion expense, both as it relates
to its asset retirement obligations as well as its accrued
restructuring charges, as these expenses represent costs which
Equinix believes are not meaningful in evaluating the Company's
current operations. Equinix excludes non-cash stock-based
compensation expense as it represents expense attributed to equity
awards that have no current or future cash obligations. As such,
we, and many investors and analysts, exclude this stock-based
compensation expense when assessing the cash generating performance
of our operations. Equinix excludes restructuring charges from its
non-GAAP financial measures. The restructuring charges relate to
the Company's decision to exit leases for excess space adjacent to
several of our IBX centers, which we did not intend to build out,
or our decision to reverse such restructuring charges or severance
charges related to the Switch and Data acquisition. Equinix
excludes acquisition costs from its non-GAAP financial measures.
The acquisition costs relate to costs the Company incurs in
connection with business combinations. Management believes such
items as restructuring charges and acquisition costs are non-core
transactions; however, these types of costs will or may occur in
future periods.
Our management does not itself, nor does it suggest that
investors should, consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. However, we have presented such
non-GAAP financial measures to provide investors with an additional
tool to evaluate our operating results in a manner that focuses on
what management believes to be our core, ongoing business
operations. Management believes that the inclusion of these
non-GAAP financial measures provides consistency and comparability
with past reports and provides a better understanding of the
overall performance of the business and its ability to perform in
subsequent periods. Equinix believes that if it did not provide
such non-GAAP financial information, investors would not have all
the necessary data to analyze Equinix effectively.
Investors should note, however, that the non-GAAP financial
measures used by Equinix may not be the same non-GAAP financial
measures, and may not be calculated in the same manner, as that of
other companies. In addition, whenever Equinix uses such non-GAAP
financial measures, it provides a reconciliation of non-GAAP
financial measures to the most closely applicable GAAP financial
measure. Investors are encouraged to review the related GAAP
financial measures and the reconciliation of these non-GAAP
financial measures to their most directly comparable GAAP financial
measure.
Equinix does not provide forward-looking guidance for certain
financial data, such as depreciation, amortization, accretion,
stock-based compensation, net income (loss) from operations, cash
generated from operating activities and cash used in investing
activities, and as a result, is not able to provide a
reconciliation of GAAP to non-GAAP financial measures for
forward-looking data. Equinix intends to calculate the various
non-GAAP financial measures in future periods consistent with how
it was calculated for the periods presented within this press
release.
Forward Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties. Actual results may differ
materially from expectations discussed in such forward-looking
statements. Factors that might cause such differences include, but
are not limited to, the challenges of acquiring, operating and
constructing IBX centers and developing, deploying and delivering
Equinix services; unanticipated costs or difficulties relating to
the integration of companies we have acquired or will acquire into
Equinix; a failure to receive significant revenue from customers in
recently built out or acquired data centers; failure to complete
any financing arrangements contemplated from time to time;
competition from existing and new competitors; the ability to
generate sufficient cash flow or otherwise obtain funds to repay
new or outstanding indebtedness; the loss or decline in business
from our key customers; and other risks described from time to time
in Equinix's filings with the Securities and Exchange Commission.
In particular, see Equinix's recent quarterly and annual reports
filed with the Securities and Exchange Commission, copies of which
are available upon request from Equinix. Equinix does not assume
any obligation to update the forward-looking information contained
in this press release.
Equinix and IBX are registered trademarks of Equinix, Inc.
International Business Exchange is a trademark of Equinix, Inc.
EQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS - GAAP PRESENTATION (in thousands, except per
share data) (unaudited)
Three Months Ended Nine
Months Ended September 30, June 30, September
30, September 30, September 30, 2010
2010 2009 2010 2009 Recurring
revenues $ 314,727 $ 282,117 $ 216,517 $ 834,080 $ 610,384
Non-recurring revenues 15,620 13,977
11,041 41,010 29,573
Revenues 330,347 296,094 227,558
875,090 639,957 Cost of revenues
185,476 162,582 126,007
481,108 356,346
Gross profit
144,871 133,512
101,551 393,982
283,611 Operating expenses: Sales and
marketing 31,205 28,913 15,543 79,586 46,315 General and
administrative 58,640 54,166 39,071 155,961 111,677 Restructuring
charges 1,886 4,357 - 6,243 (6,053 ) Acquisition costs 1,114
5,849 1,379 11,957
1,379
Total operating expenses
92,845 93,285
55,993 253,747
153,318 Income from operations
52,026 40,227
45,558 140,235
130,293 Interest and other income (expense):
Interest income 310 491 353 1,307 1,949 Interest expense (38,363 )
(37,615 ) (22,256 ) (101,653 ) (51,619 ) Other-than-temporary
impairment recovery (loss) on investments 206 - - 3,626 (2,687 )
Loss on debt extinguishment and interest rate swaps, net - (1,454 )
- (4,831 ) - Other income (expense) 1,654
(1,481 ) 2,484 193 3,675
Total interest and other, net (36,193 )
(40,059 ) (19,419 )
(101,358 ) (48,682 )
Income before income taxes 15,833 168
26,139 38,877 81,611 Income tax expense
(4,637 ) (2,442 ) (7,327 ) (15,756 ) (29,902 )
Net income (loss)
$ 11,196 $ (2,274 )
$ 18,812 $ 23,121
$ 51,709 Net income (loss) per
share: Basic net income (loss) per share $ 0.24 $
(0.05 ) $ 0.49 $ 0.54 $ 1.35 Diluted
net income (loss) per share $ 0.24 $ (0.05 ) $ 0.47 $
0.52 $ 1.32
Shares used in computing basic net income
(loss) per share
45,745 43,507 38,787
42,961 38,270
Shares used in computing diluted net
income (loss) per share
46,735 43,507 39,887
44,082 39,305
EQUINIX, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION (in
thousands) (unaudited) Three
Months Ended Nine Months Ended September 30,
June 30, September 30, September 30,
September 30, 2010 2010 2009
2010 2009 Recurring revenues $ 314,727 $
282,117 $ 216,517 $ 834,080 $ 610,384 Non-recurring revenues
15,620 13,977 11,041
41,010 29,573
Revenues (1)
330,347 296,094
227,558 875,090
639,957 Cash cost of revenues (2)
116,602 103,892 81,931
305,578 229,047
Cash gross profit (3)
213,745 192,202
145,627 569,512
410,910 Cash operating expenses (4):
Cash sales and marketing expenses (5)
24,171 22,158 11,453 61,514 34,637 Cash general and administrative
expenses (6) 43,113 37,889
28,138 112,110 79,325
Total
cash operating expenses (7) 67,284
60,047 39,591
173,624 113,962
Adjusted EBITDA (8) $ 146,461 $
132,155 $ 106,036 $
395,888 $ 296,948 Cash
gross margins (9) 65 % 65
% 64 % 65 %
64 % Adjusted EBITDA margins (10)
44 % 45 %
47 % 45 % 46
% Adjusted EBITDA flow-through rate (11)
42 % 31 %
45 % 41 % 71
% (1 ) The
geographic split of our revenues on a services basis is presented
below: North America Revenues: Colocation $ 164,653 $
148,569 $ 108,018 $ 432,154 $ 308,388 Interconnection 42,102 35,072
22,494 100,938 65,966 Managed infrastructure 821 746 529 2,106
1,620 Rental 520 407 123
1,109 402 Recurring revenues 208,096
184,794 131,164 536,307 376,376 Non-recurring revenues 7,229
6,852 5,170 19,220
14,598 Revenues 215,325 191,646
136,334 555,527 390,974
Asia-Pacific Revenues: Colocation 31,672
28,853 22,691 87,510 63,026 Interconnection 4,430 3,860 2,831
11,819 7,643 Managed infrastructure 4,250
3,946 3,515 12,056 10,640
Recurring revenues 40,352 36,659 29,037 111,385 81,309
Non-recurring revenues 1,876 1,705
1,381 5,136 4,012
Revenues 42,228 38,364 30,418
116,521 85,321 Europe
Revenues: Colocation 60,970 55,898 51,258 171,310 138,078
Interconnection 2,305 2,010 1,910 6,254 4,957 Managed
infrastructure 2,734 2,603 2,976 8,238 9,268 Rental 270
153 172 586
396 Recurring revenues 66,279 60,664 56,316 186,388 152,699
Non-recurring revenues 6,515 5,420
4,490 16,654 10,963
Revenues 72,794 66,084 60,806
203,042 163,662 Worldwide
Revenues: Colocation 257,295 233,320 181,967 690,974 509,492
Interconnection 48,837 40,942 27,235 119,011 78,566 Managed
infrastructure 7,805 7,295 7,020 22,400 21,528 Rental 790
560 295 1,695
798 Recurring revenues 314,727 282,117 216,517
834,080 610,384 Non-recurring revenues 15,620
13,977 11,041 41,010
29,573 Revenues $ 330,347 $ 296,094 $ 227,558
$ 875,090 $ 639,957 (2 )
We define cash cost of revenues as cost of
revenues less depreciation, amortization, accretion and stock-based
compensation as presented below:
Cost of revenues $ 185,476 $ 162,582 $ 126,007 $ 481,108 $
356,346 Depreciation, amortization and accretion expense (67,255 )
(56,946 ) (42,189 ) (170,573 ) (122,860 ) Stock-based compensation
expense (1,619 ) (1,744 ) (1,887 )
(4,957 ) (4,439 ) Cash cost of revenues $ 116,602 $
103,892 $ 81,931 $ 305,578 $ 229,047
The geographic split of our cash cost of revenues is
presented below: North America cash cost of revenues $
71,879 $ 61,220 $ 43,123 $ 177,247 $ 121,778 Asia-Pacific cash cost
of revenues 15,350 13,612 10,697 41,362 30,959 Europe cash cost of
revenues 29,373 29,060 28,111
86,969 76,310 Cash cost of
revenues $ 116,602 $ 103,892 $ 81,931 $
305,578 $ 229,047 (3 ) We define cash gross
profit as revenues less cash cost of revenues (as defined above).
(4 )
We define cash operating expenses as
operating expenses less depreciation, amortization, stock-based
compensation, restructuring charges and acquisition costs. We also
refer to cash operating expenses as cash selling, general and
administrative expenses or "cash SG&A".
(5 )
We define cash sales and marketing
expenses as sales and marketing expenses less depreciation,
amortization and stock-based compensation as presented below:
Sales and marketing expenses $ 31,205 $ 28,913 $ 15,543 $
79,586 $ 46,315 Depreciation and amortization expense (3,407 )
(2,997 ) (1,409 ) (7,756 ) (3,979 ) Stock-based compensation
expense (3,627 ) (3,758 ) (2,681 )
(10,316 ) (7,699 ) Cash sales and marketing expenses $
24,171 $ 22,158 $ 11,453 $ 61,514 $
34,637 (6 )
We define cash general and administrative
expenses as general and administrative expenses less depreciation,
amortization and stock-based compensation as presented below:
General and administrative expenses $ 58,640 $ 54,166 $
39,071 $ 155,961 $ 111,677 Depreciation and amortization expense
(3,823 ) (3,683 ) (1,468 ) (9,104 ) (5,460 ) Stock-based
compensation expense (11,704 ) (12,594 )
(9,465 ) (34,747 ) (26,892 ) Cash general and
administrative expenses $ 43,113 $ 37,889 $ 28,138
$ 112,110 $ 79,325 (7 ) Our cash
operating expenses, or cash SG&A, as defined above, is
presented below: Cash sales and marketing expenses $ 24,171
$ 22,158 $ 11,453 $ 61,514 $ 34,637 Cash general and administrative
expenses 43,113 37,889 28,138
112,110 79,325 Cash SG&A $
67,284 $ 60,047 $ 39,591 $ 173,624 $
113,962 The geographic split of our cash operating
expenses, or cash SG&A, is presented below: North
America cash SG&A $ 45,499 $ 40,960 $ 25,187 $ 117,085 $ 72,195
Asia-Pacific cash SG&A 7,420 6,003 5,023 18,417 14,709 Europe
cash SG&A 14,365 13,084
9,381 38,122 27,058 Cash
SG&A $ 67,284 $ 60,047 $ 39,591 $ 173,624
$ 113,962 (8 )
We define adjusted EBITDA as income from
operations plus depreciation, amortization, accretion, stock-based
compensation expense, restructuring charges and acquisition costs
as presented below:
Income from operations $ 52,026 $ 40,227 $ 45,558 $ 140,235
$ 130,293 Depreciation, amortization and accretion expense 74,485
63,626 45,066 187,433 132,299 Stock-based compensation expense
16,950 18,096 14,033 50,020 39,030 Restructuring charges 1,886
4,357 - 6,243 (6,053 ) Acquisition costs 1,114
5,849 1,379 11,957 1,379
Adjusted EBITDA $ 146,461 $ 132,155 $ 106,036
$ 395,888 $ 296,948 The geographic
split of our adjusted EBITDA is presented below: North
America income from operations $ 31,921 $ 22,529 $ 31,571 $ 84,051
$ 94,260 North America depreciation, amortization and accretion
expense 51,108 43,081 25,838 122,363 79,151 North America
stock-based compensation expense 12,683 13,650 10,295 37,346 29,323
North America restructuring charges 1,886 4,357 - 6,243 (6,053 )
North America acquisition costs 349 5,849
320 11,192 320
North America adjusted EBITDA 97,947 89,466
68,024 261,195 197,001
Asia-Pacific income from operations 9,847 10,026
6,892 29,933 15,625 Asia-Pacific depreciation, amortization and
accretion expense 7,846 6,808 5,612 21,318 18,697 Asia-Pacific
stock-based compensation expense 1,765 1,915
2,194 5,491 5,331
Asia-Pacific adjusted EBITDA 19,458 18,749
14,698 56,742 39,653
Europe income from operations 10,258 7,672 7,095
26,251 20,408 Europe depreciation, amortization and accretion
expense 15,531 13,737 13,616 43,752 34,451 Europe stock-based
compensation expense 2,502 2,531 1,544 7,183 4,376 Europe
acquisition costs 765 - 1,059
765 1,059 Europe adjusted EBITDA
29,056 23,940 23,314
77,951 60,294 Adjusted EBITDA $
146,461 $ 132,155 $ 106,036 $ 395,888 $
296,948 (9 ) We define cash gross margins as cash
gross profit divided by revenues. Our cash gross margins by
geographic region is presented below: North America cash
gross margins 67 % 68 % 68 % 68 %
69 % Asia-Pacific cash gross margins 64 %
65 % 65 % 65 % 64 % Europe cash
gross margins 60 % 56 % 54 % 57 %
53 % (10 ) We define adjusted EBITDA margins as
adjusted EBITDA divided by revenues. North America adjusted
EBITDA margins 45 % 47 % 50 % 47 %
50 % Asia-Pacific adjusted EBITDA margins 46 %
49 % 48 % 49 % 46 % Europe
adjusted EBITDA margins 40 % 36 % 38 %
38 % 37 % (11 )
We define adjusted EBITDA flow-through
rate as incremental adjusted EBITDA growth divided by incremental
revenue growth as follows:
Adjusted EBITDA - current period $ 146,461 $ 132,155 $
106,036 $ 395,888 $ 296,948 Less adjusted EBITDA - prior period
(132,155 ) (117,272 ) (99,534 )
(317,230 ) (230,207 ) Adjusted EBITDA growth $ 14,306
$ 14,883 $ 6,502 $ 78,658 $ 66,741
Revenues - current period $ 330,347 $ 296,094 $ 227,558 $
875,090 $ 639,957 Less revenues - prior period (296,094 )
(248,649 ) (213,168 ) (683,278 )
(546,462 ) Revenue growth $ 34,253 $ 47,445 $ 14,390
$ 191,812 $ 93,495 Adjusted EBITDA
flow-through rate 42 % 31 % 45 % 41 %
71 %
EQUINIX, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands)
(unaudited) Assets September 30,
December 31, 2010 2009 Cash and cash
equivalents $ 389,149 $ 346,056 Short-term investments 322,979
248,508 Accounts receivable, net 115,616 64,767 Other current
assets 64,067 68,556
Total current
assets 891,811 727,887 Long-term investments
3,223 9,803 Property, plant and equipment, net 2,582,890 1,808,115
Goodwill 778,258 381,050 Intangible assets, net 155,601 51,015
Other assets 69,108 60,280
Total
assets $ 4,480,891 $
3,038,150 Liabilities and Stockholders'
Equity Accounts payable and accrued expenses $ 134,091 $
99,053 Accrued property and equipment 97,012 109,876 Current
portion of capital lease and other financing obligations 7,624
6,452 Current portion of mortgage and loans payable 22,480 58,912
Other current liabilities 49,818 41,166
Total current liabilities 311,025 315,459
Capital lease and other financing obligations, less current portion
261,929 154,577 Mortgage and loans payable, less current portion
179,027 371,322 Senior notes 750,000 - Convertible debt 910,495
893,706 Other liabilities 214,442 120,603
Total liabilities 2,626,918
1,855,667 Common stock 46 39 Additional
paid-in capital 2,320,107 1,665,662 Accumulated other comprehensive
loss (103,321 ) (97,238 ) Accumulated deficit (362,859 )
(385,980 )
Total stockholders' equity
1,853,973 1,182,483
Total liabilities and stockholders' equity $
4,480,891 $ 3,038,150
Ending headcount
by geographic region is as follows: North America headcount
1,164 718 Asia-pacific headcount 275 236 Europe headcount
459 347 Total headcount 1,898
1,301
EQUINIX, INC.
SUMMARY OF DEBT OUTSTANDING (in thousands)
(unaudited) September 30, December 31,
2010 2009 Capital lease and other financing
obligations $ 269,553 $ 161,029 European financing - 130,058
Chicago IBX financing - 109,991 Mortgage payable 89,663 91,756
Asia-Pacific financing - 64,559 Singapore financing - 24,559
Netherlands financing - 9,311 New Asia-Pacific financing
111,844 - Total mortgage and loans payable 201,507
430,234 Senior notes 750,000 -
Convertible debt, net of debt discount 910,495 893,706 Plus debt
discount 109,241 126,030 Total convertible debt
principal 1,019,736 1,019,736 Total debt
outstanding $ 2,240,796 $ 1,610,999
EQUINIX, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
(unaudited) Three Months
Ended Nine Months Ended September 30, June
30, September 30, September 30, September
30, 2010 2010 2009 2010 2009
Cash flows from operating activities: Net income (loss) $
11,196 $ (2,274 ) $ 18,812 $ 23,121 $ 51,709
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation, amortization and accretion 74,485 63,626 45,066
187,433 132,299 Stock-based compensation 16,950 18,096 14,033
50,020 39,030 Debt issuance costs and debt discount 7,160 6,689
6,496 19,403 12,210 Loss on debt extinguishment and interest rate
swaps - 1,454 - 4,831 - Restructuring charges 1,886 4,357 - 6,243
(6,053 ) Other reconciling items 894 834 (426 ) 2,162 3,269 Changes
in operating assets and liabilities: Accounts receivable (6,729 )
(25,671 ) 1,003 (38,486 ) (23 ) Deferred tax assets, net 3,442 (723
) 3,811 7,721 20,750 Accounts payable and accrued expenses (3,013 )
3,174 5,714 16,047 18,248 Other assets and liabilities 6,992
(12,656 ) 13,030 (8,514 )
1,543
Net cash provided by operating activities
113,263 56,906
107,539 269,981
272,982 Cash flows from investing activities:
Purchases, sales and maturities of investments, net (115,554 )
(64,987 ) (146,045 ) (68,256 ) (258,582 ) Purchase of Switch and
Data, less cash acquired - (113,289 ) - (113,289 ) - Purchase of
Upminster, less cash acquired - - (28,176 ) - (28,176 ) Purchases
of property and equipment (143,941 ) (148,705 ) (88,195 ) (436,046
) (267,802 ) Other investing activities - (474
) 1,867 (916 ) 12,066
Net
cash used in investing activities (259,495
) (327,455 ) (260,549
) (618,507 ) (542,494
) Cash flows from financing activities: Proceeds from
employee equity awards 14,026 11,270 14,096 36,179 23,050 Proceeds
from convertible debt - - - - 373,750 Proceeds from mortgage and
loans payable 16,853 98,958 27,935 115,811 28,679 Proceeds from
senior notes - - - 750,000 - Repayment of capital lease and other
financing obligations (1,713 ) (10,847 ) (1,427 ) (14,114 ) (3,765
) Repayment of mortgage and loans payable (11,049 ) (343,688 )
(11,003 ) (469,077 ) (34,525 ) Capped call costs - - - - (49,664 )
Equity issuance costs - - (9 ) - (2,795 ) Debt issuance costs
(5 ) (7,926 ) (788 ) (23,124 )
(8,210 )
Net cash provided by (used in) financing activities
18,112 (252,233 )
28,804 395,675
326,520 Effect of foreign currency exchange rates on
cash and cash equivalents 5,927 (5,178 )
2,136 (4,056 ) 5,932 Net
increase (decrease) in cash and cash equivalents (122,193 )
(527,960 ) (122,070 ) 43,093 62,940 Cash and cash equivalents at
beginning of period 511,342 1,039,302
405,217 346,056 220,207
Cash and cash equivalents at end of period $
389,149 $ 511,342 $
283,147 $ 389,149 $
283,147 Free cash flow (1)
$ (30,678 ) $ (205,562 )
$ (6,965 ) $ (280,270 )
$ (10,930 ) Adjusted free cash flow
(2) $ (30,678 ) $ (92,273
) $ 21,211 $ (166,981
) $ 17,246
(1 )
We define free cash flow as net cash
provided by operating activities plus net cash used in investing
activities (excluding the net purchases, sales and maturities of
investments) as presented below:
Net cash provided by operating activities as presented above
$ 113,263 $ 56,906 $ 107,539 $ 269,981 $ 272,982 Net cash used in
investing activities as presented above (259,495 ) (327,455 )
(260,549 ) (618,507 ) (542,494 ) Purchases, sales and maturities of
investments, net 115,554 64,987
146,045 68,256 258,582 Free cash
flow (negative free cash flow) $ (30,678 ) $ (205,562 ) $ (6,965 )
$ (280,270 ) $ (10,930 ) (2 )
We define adjusted free cash flow as free
cash flow (as defined above) excluding any purchases or sales of
real estate and acquisitions as presented below:
Free cash flow (as defined above) $ (30,678 ) $ (205,562 ) $
(6,965 ) $ (280,270 ) $ (10,930 ) Less purchase of Switch and Data,
less cash acquired - 113,289 - 113,289 - Less purchase of
Upminster, less cash acquired - -
28,176 - 28,176 Adjusted
free cash flow (negative adjusted free cash flow) $ (30,678 ) $
(92,273 ) $ 21,211 $ (166,981 ) $ 17,246
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