Equinix, Inc. (Nasdaq:EQIX), a provider of global data center
services, today reported quarterly results for the quarter ended
June 30, 2011. This quarter included the results from the
acquisition of an indirect, controlling equity interest in ALOG
Data Centers do Brasil S.A. from April 25, 2011, which is referred
to as the ALOG acquisition.
Revenues were $394.9 million for the second quarter, a 9%
increase over the previous quarter and a 33% increase over the same
quarter last year. This result included $11.7 million in revenues
from ALOG for the quarter. Recurring revenues, consisting primarily
of colocation, interconnection and managed services were $376.5
million for the second quarter, a 9% increase over the previous
quarter and a 33% increase over the same quarter last year.
Non-recurring revenues were $18.4 million in the quarter.
“With outstanding first-half results, Equinix is on target to
surpass its original financial objectives for 2011. Solid
market fundamentals such as the growth of IP, mobile, video, cloud
and electronic trading combined with our global leadership position
set us up well for the long term,” said Steve Smith, president and
CEO of Equinix. “Our investments are paying off and we will
continue to carefully allocate capital to support our growth, while
generating attractive returns for our shareholders.”
Cost of revenues were $215.6 million for the second quarter, an
11% increase over the previous quarter and a 33% increase over the
same quarter last year. Cost of revenues, excluding depreciation,
amortization, accretion and stock-based compensation of $78.0
million, were $137.6 million for the second quarter, a 12% increase
from the previous quarter and a 32% 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%, down from 66% for
the previous quarter and unchanged from the same quarter last
year.
Selling, general and administrative expenses were $102.7 million
for the second quarter, a 7% increase over the previous quarter and
a 24% increase over the same quarter last year. Selling, general
and administrative expenses, excluding depreciation, amortization
and stock-based compensation of $26.7 million, were $76.0 million
for the second quarter, a 4% increase over the previous quarter and
a 27% increase over the same quarter last year.
Interest expense was $37.7 million for the second quarter, a 1%
increase from the previous quarter and essentially flat over the
same quarter last year. The Company recorded income tax expense of
$8.1 million for the second quarter as compared to an income tax
expense of $11.1 million in the prior quarter and income tax
expense of $2.4 million in the same quarter last year.
Net income attributable to Equinix for the second quarter was
$30.7 million. This represents a basic net income per share
attributable to Equinix of $0.65 and diluted net income per share
of $0.64 based on a weighted average share count of 46.9 million
and 50.7 million, respectively, for the second quarter of 2011.
Adjusted EBITDA, defined as income or loss from operations
before depreciation, amortization, accretion, stock-based
compensation, restructuring charges and acquisition costs for the
second quarter, was $181.3 million, an increase of 8% over the
previous quarter and a 37% 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
second quarter, were $188.9 million, of which $160.9 million was
attributed to expansion capital expenditures and $28.0 million was
attributed to ongoing capital expenditures.
The Company generated cash from operating activities of $140.3
million for the second quarter as compared to $117.8 million in the
previous quarter and $56.9 million for the same quarter last year.
Cash used in investing activities was $209.7 million in the second
quarter as compared to cash used in investing activities of $286.4
million in the previous quarter and cash used in investing
activities of $327.5 million for the same quarter last year. Cash
provided by financing activities was $61.8 million for the second
quarter, which was primarily related to the proceeds from employee
equity awards and draw downs of certain loans payable.
As of June 30, 2011, the Company’s cash, cash equivalents and
investments were $423.1 million, as compared to $456.7 million as
of March 31, 2011. In July 2011, the Company received net proceeds
from the 7.00% senior notes offering of approximately $735.6
million.
Company Metrics and Q2 Results Presentation
- A presentation to accompany Equinix’s
Q2 Results conference call, as well as the Company’s Non-Financial
Metrics tracking sheet, have been posted on the Investors section
of Equinix’s web site at www.equinix.com/investors
Business Outlook
For the third quarter of 2011, the Company expects revenues to
be in the range of $412.0 to $417.0 million. Cash gross margins are
expected to be approximately 65%. Cash selling, general and
administrative expenses are expected to be approximately $86.0
million. Adjusted EBITDA is expected to be between $180.0 and
$185.0 million. Capital expenditures are expected to be
approximately $160.0 and $180.0 million, comprised of approximately
$30.0 million of ongoing capital expenditures and $130.0 to $150.0
million of expansion capital expenditures.
For the full year of 2011, total revenues are expected to be
greater than $1,590.0 million. Total year cash gross margins are
expected to range between 65% and 66%. Cash selling, general and
administrative expenses are expected to approximate $320.0 million.
Adjusted EBITDA for the year is expected to be greater than $720.0
million. Capital expenditures for 2011 are expected to be in the
range of $645.0 to $665.0 million, comprised of approximately
$115.0 million of ongoing capital expenditures and $530.0 to $550.0
million for expansion capital expenditures.
The Company will discuss its results and guidance on its
quarterly conference call on Wednesday, July 27, 2011, 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. 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 Wednesday,
July 27, 2011, at 7:30 p.m. (ET) through August 28, 2011, by
dialing 203-369-1470. In addition, the webcast will be available on
the company's web site at www.equinix.com/investors over the same
time period. No password is required for the replay or the
webcast.
About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects businesses with partners
and customers around the world through a global platform of high
performance data centers, containing dynamic ecosystems and the
broadest choice of networks. Platform Equinix connects more than
4,000 enterprises, cloud, digital content and financial companies
including more than 675 network service providers to help them grow
their businesses, improve application performance and protect their
vital digital assets. Equinix operates in 38 strategic markets
across the Americas, EMEA and Asia-Pacific and continually invests
in expanding its platform to power customer growth.
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 Six Months
Ended June 30, March 31, June 30, June
30, June 30, 2011
2011 2010 2011
2010 Recurring revenues $
376,528 $ 343,909 $ 282,117 $ 720,437 $ 519,353 Non-recurring
revenues 18,372 19,120 13,977
37,492 25,390
Revenues
394,900 363,029 296,094 757,929
544,743 Cost of revenues 215,572
194,576 162,582 410,148
295,632
Gross profit 179,328
168,453 133,512
347,781 249,111 Operating
expenses: Sales and marketing 37,063 33,636 28,913 70,699 48,381
General and administrative 65,681 62,601 54,166 128,282 97,321
Restructuring charges 103 496 4,357 599 4,357 Acquisition costs
1,615 415 5,849
2,030 10,843
Total operating expenses
104,462 97,148
93,285 201,610
160,902 Income from operations
74,866 71,305
40,227 146,171
88,209 Interest and other income (expense):
Interest income 632 215 491 847 997 Interest expense (37,677 )
(37,361 ) (37,615 ) (75,038 ) (63,290 ) Other-than-temporary
impairment recovery on investments - - - - 3,420 Loss on debt
extinguishment and interest rate swaps, net - - (1,454 ) - (4,831 )
Other income (expense) 1,021 2,111
(1,481 ) 3,132 (1,461 )
Total
interest and other, net (36,024 )
(35,035 ) (40,059 )
(71,059 ) (65,165 )
Income before income taxes 38,842 36,270
168 75,112 23,044 Income tax expense
(8,109 ) (11,125 ) (2,442 ) (19,234 )
(11,119 )
Net income (loss) 30,733
25,145 (2,274 ) 55,878 11,925
Net (income) loss attributable to redeemable non-controlling
interests (3 ) - - (3 ) -
Net
income (loss) attributable to Equinix $ 30,730
$ 25,145 $ (2,274
) $ 55,875 $ 11,925
Net income (loss) per share attributable to
Equinix: Basic net income (loss) per share $ 0.65
$ 0.54 $ (0.05 ) $ 1.20 $ 0.29 Diluted
net income (loss) per share $ 0.64 $ 0.53 $ (0.05 ) $
1.18 $ 0.28
Shares used in computing basic net income
(loss) per share
46,924 46,451 43,507
46,688 41,546
Shares used in computing diluted net
income (loss) per share
50,664 47,219 43,507
50,454 42,694
EQUINIX,
INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS -
NON-GAAP PRESENTATION (in thousands) (unaudited)
Three
Months Ended Six Months Ended June 30, March
31, June 30, June 30, June 30,
2011 2011 2010
2011 2010
Recurring revenues $ 376,528 $ 343,909 $ 282,117 $ 720,437 $
519,353 Non-recurring revenues 18,372 19,120
13,977 37,492 25,390
Revenues (1) 394,900
363,029 296,094
757,929 544,743 Cash cost
of revenues (2) 137,558 122,631
103,892 260,189 188,976
Cash
gross profit (3) 257,342
240,398 192,202
497,740 355,767 Cash
operating expenses (4): Cash sales and marketing expenses (5)
29,261 27,104 22,158 56,365 37,343 Cash general and administrative
expenses (6) 46,753 46,018
37,889 92,771 68,997
Total
cash operating expenses (7) 76,014
73,122 60,047
149,136 106,340
Adjusted EBITDA (8) $ 181,328 $
167,276 $ 132,155 $
348,604 $ 249,427 Cash
gross margins (9) 65 % 66
% 65 % 66 %
65 % Adjusted EBITDA margins (10)
46 % 46 %
45 % 46 % 46
% Adjusted EBITDA flow-through rate (11)
44 % 103 %
31 % 65 % 43
% (1) The
geographic split of our revenues on a services basis is presented
below: Americas Revenues: Colocation $ 187,840 $
176,196 $ 148,569 $ 364,036 267,501 Interconnection 49,886 45,922
35,072 95,808 58,836 Managed infrastructure 6,984 767 746 7,751
1,285 Rental 489 504 407
993 589 Recurring revenues 245,199
223,389 184,794 468,588 328,211 Non-recurring revenues 8,690
9,138 6,852 17,828
11,991 Revenues 253,889 232,527
191,646 486,416 340,202
EMEA Revenues: Colocation 74,645 68,200 55,898
142,845 110,340 Interconnection 3,203 2,812 2,010 6,015 3,949
Managed infrastructure 3,481 3,198 2,603 6,679 5,504 Rental
177 118 153 295
316 Recurring revenues 81,506 74,328 60,664 155,834
120,109 Non-recurring revenues 7,105 7,711
5,420 14,816 10,139
Revenues 88,611 82,039
66,084 170,650 130,248
Asia-Pacific Revenues: Colocation 39,101 36,339 28,853
75,440 55,838 Interconnection 5,818 5,341 3,860 11,159 7,389
Managed infrastructure 4,904 4,512
3,946 9,416 7,806
Recurring revenues 49,823 46,192 36,659 96,015 71,033 Non-recurring
revenues 2,577 2,271 1,705
4,848 3,260 Revenues
52,400 48,463 38,364
100,863 74,293 Worldwide Revenues:
Colocation 301,586 280,735 233,320 582,321 433,679
Interconnection 58,907 54,075 40,942 112,982 70,174 Managed
infrastructure 15,369 8,477 7,295 23,846 14,595 Rental 666
622 560 1,288
905 Recurring revenues 376,528 343,909 282,117
720,437 519,353 Non-recurring revenues 18,372
19,120 13,977 37,492
25,390 Revenues $ 394,900 $ 363,029 $ 296,094
$ 757,929 $ 544,743 (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 $ 215,572 $ 194,576 $ 162,582 $ 410,148 $
295,632 Depreciation, amortization and accretion expense (76,515 )
(70,600 ) (56,946 ) (147,115 ) (103,318 ) Stock-based compensation
expense (1,499 ) (1,345 ) (1,744 )
(2,844 ) (3,338 ) Cash cost of revenues $ 137,558 $
122,631 $ 103,892 $ 260,189 $ 188,976
The geographic split of our cash cost of revenues is
presented below: Americas cash cost of revenues $ 81,886 $
70,210 $ 61,220 $ 152,096 $ 105,368 EMEA cash cost of revenues
36,217 34,491 29,060 70,708 57,596 Asia-Pacific cash cost of
revenues 19,455 17,930 13,612
37,385 26,012 Cash cost of
revenues $ 137,558 $ 122,631 $ 103,892 $
260,189 $ 188,976 (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 $ 37,063 $ 33,636 $ 28,913 $
70,699 $ 48,381 Depreciation and amortization expense (4,192 )
(3,666 ) (2,997 ) (7,858 ) (4,349 ) Stock-based compensation
expense (3,610 ) (2,866 ) (3,758 )
(6,476 ) (6,689 ) Cash sales and marketing expenses $ 29,261
$ 27,104 $ 22,158 $ 56,365 $ 37,343
(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 $ 65,681 $ 62,601 $
54,166 $ 128,282 $ 97,321 Depreciation and amortization expense
(5,719 ) (5,259 ) (3,683 ) (10,978 ) (5,281 ) Stock-based
compensation expense (13,209 ) (11,324 )
(12,594 ) (24,533 ) (23,043 ) Cash general and
administrative expenses $ 46,753 $ 46,018 $ 37,889
$ 92,771 $ 68,997 (7) Our cash
operating expenses, or cash SG&A, as defined above, is
presented below: Cash sales and marketing expenses $ 29,261
$ 27,104 $ 22,158 $ 56,365 $ 37,343 Cash general and administrative
expenses 46,753 46,018 37,889
92,771 68,997 Cash SG&A $
76,014 $ 73,122 $ 60,047 $ 149,136 $
106,340 The geographic split of our cash operating
expenses, or cash SG&A, is presented below: Americas
cash SG&A $ 49,499 $ 48,812 $ 40,960 $ 98,311 $ 71,586 EMEA
cash SG&A 17,545 16,936 13,084 34,481 23,757 Asia-Pacific cash
SG&A 8,970 7,374 6,003
16,344 10,997 Cash SG&A $
76,014 $ 73,122 $ 60,047 $ 149,136 $
106,340 (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 $ 74,866 $ 71,305 $ 40,227 $ 146,171
$ 88,209 Depreciation, amortization and accretion expense 86,426
79,525 63,626 165,951 112,948 Stock-based compensation expense
18,318 15,535 18,096 33,853 33,070 Restructuring charges 103 496
4,357 599 4,357 Acquisition costs 1,615 415
5,849 2,030 10,843
Adjusted EBITDA $ 181,328 $ 167,276 $ 132,155
$ 348,604 $ 249,427 The geographic split of
our adjusted EBITDA is presented below: Americas income from
operations $ 49,072 $ 47,319 $ 22,529 $ 96,391 $ 52,130 Americas
depreciation, amortization and accretion expense 57,246 53,482
43,081 110,728 71,255 Americas stock-based compensation expense
14,527 11,842 13,650 26,369 24,663 Americas restructuring charges
103 496 4,357 599 4,357 Americas acquisition costs 1,556
366 5,849 1,922
10,843 Americas adjusted EBITDA 122,504
113,505 89,466 236,009
163,248 EMEA income from operations 14,178
11,471 7,672 25,649 15,993 EMEA depreciation, amortization and
accretion expense 18,512 16,844 13,737 35,356 28,221 EMEA
stock-based compensation expense 2,147 2,295 2,531 4,442 4,681 EMEA
acquisition costs 12 2 -
14 - EMEA adjusted EBITDA 34,849
30,612 23,940 65,461
48,895 Asia-Pacific income from
operations 11,616 12,515 10,026 24,131 20,086 Asia-Pacific
depreciation, amortization and accretion expense 10,668 9,199 6,808
19,867 13,472 Asia-Pacific stock-based compensation expense 1,644
1,398 1,915 3,042 3,726 Asia-Pacific acquisition costs 47
47 - 94 -
Asia-Pacific adjusted EBITDA 23,975
23,159 18,749 47,134
37,284 Adjusted EBITDA $ 181,328 $ 167,276
$ 132,155 $ 348,604 $ 249,427
(9) We define cash gross margins as cash gross profit divided by
revenues. Our cash gross margins by geographic region is
presented below: Americas cash gross margins 68 %
70 % 68 % 69 % 69 % EMEA cash
gross margins 59 % 58 % 56 % 59 %
56 % Asia-Pacific cash gross margins 63 %
63 % 65 % 63 % 65 % (10) We
define adjusted EBITDA margins as adjusted EBITDA divided by
revenues. Americas adjusted EBITDA margins 48 %
49 % 47 % 49 % 48 % EMEA
adjusted EBITDA margins 39 % 37 % 36 %
38 % 38 % Asia-Pacific adjusted EBITDA margins
46 % 48 % 49 % 47 % 50 % (11)
We define adjusted EBITDA flow-through
rate as incremental adjusted EBITDA growth divided by incremental
revenue growth as follows:
Adjusted EBITDA - current period $ 181,328 $ 167,276 $
132,155 $ 348,604 $ 249,427 Less adjusted EBITDA - prior period
(167,276 ) (148,947 ) (117,272 )
(295,408 ) (217,696 ) Adjusted EBITDA growth $ 14,052
$ 18,329 $ 14,883 $ 53,196 $ 31,731
Revenues - current period $ 394,900 $ 363,029 $ 296,094 $
757,929 $ 544,743 Less revenues - prior period (363,029 )
(345,244 ) (248,649 ) (675,591 )
(470,110 ) Revenue growth $ 31,871 $ 17,785 $ 47,445
$ 82,338 $ 74,633 Adjusted EBITDA
flow-through rate 44 % 103 % 31 % 65 %
43 %
EQUINIX, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (in thousands) (unaudited)
Assets June 30, December 31,
2011 2010 Cash and
cash equivalents $ 297,872 $ 442,841 Short-term investments 94,246
147,192 Accounts receivable, net 140,316 116,358 Other current
assets 116,654 71,657
Total current
assets 649,088 778,048 Long-term investments
30,960 2,806 Property, plant and equipment, net 3,085,202 2,650,953
Goodwill 897,461 774,365 Intangible assets, net 163,771 150,945
Other assets 142,709 90,892
Total
assets $ 4,969,191 $
4,448,009 Liabilities and Stockholders'
Equity Accounts payable and accrued expenses $ 189,739 $
145,854 Accrued property and equipment 90,652 91,667 Current
portion of capital lease and other financing obligations 9,461
7,988 Current portion of loans payable 31,459 19,978 Current
portion of convertible debt 240,134 - Other current liabilities
59,006 52,628
Total current
liabilities 620,451 318,115 Capital lease and
other financing obligations, less current portion 337,274 253,945
Loans payable, less current portion 201,233 100,337 Senior notes
750,000 750,000 Convertible debt 688,300 916,337 Other liabilities
238,684 228,760
Total
liabilities 2,835,942
2,567,494 Redeemable non-controlling interests
69,050 - Common stock 47 46
Additional paid-in capital 2,399,055 2,341,586 Accumulated other
comprehensive loss (41,679 ) (112,018 ) Accumulated deficit
(293,224 ) (349,099 )
Total stockholders' equity
2,064,199 1,880,515
Total liabilities, redeemable
non-controlling interests and stockholders' equity
$ 4,969,191 $ 4,448,009
Ending
headcount by geographic region is as follows: Americas
headcount 1,672 1,156 EMEA headcount 526 482 Asia-Pacific headcount
341 283 Total headcount 2,539
1,921
EQUINIX, INC. SUMMARY
OF DEBT OUTSTANDING (in thousands) (unaudited)
June 30, December 31,
2011 2010 Capital lease and other financing
obligations $ 346,735 $ 261,933 Paris IBX financing 20,594 -
ALOG financing 19,254 - New Asia-Pacific financing 192,844
120,315 Total loans payable 232,692 120,315
Senior notes 750,000 750,000
Convertible debt, net of debt discount 928,434 916,337 Plus debt
discount 91,302 103,399 Total convertible debt
principal 1,019,736 1,019,736 Total debt
outstanding $ 2,349,163 $ 2,151,984
EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands) (unaudited)
Three Months Ended
Six Months Ended June 30, March 31, June
30, June 30, June 30, 2011
2011 2010
2011 2010 Cash flows from
operating activities: Net income (loss) $ 30,733 $ 25,145 $ (2,274
) $ 55,878 $ 11,925
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation, amortization and accretion 86,426 79,525 63,626
165,951 112,948 Stock-based compensation 18,318 15,535 18,096
33,853 33,070 Debt issuance costs and debt discount 8,325 7,284
6,689 15,609 12,243 Loss on debt extinguishment and interest rate
swaps - - 1,454 - 4,831 Restructuring charges 103 496 4,357 599
4,357 Other reconciling items 3,074 1,563 834 4,637 1,268 Changes
in operating assets and liabilities: Accounts receivable (19,409 )
3,099 (25,671 ) (16,310 ) (31,757 ) Deferred tax assets, net (2,507
) 5,640 (723 ) 3,133 4,279 Accounts payable and accrued expenses
4,082 (13,606 ) 3,174 (9,524 ) 19,060 Other assets and liabilities
11,203 (6,911 ) (12,656 ) 4,292
(15,506 )
Net cash provided by operating
activities 140,348 117,770
56,906 258,118
156,718 Cash flows from investing activities:
Purchases, sales and maturities of investments, net 30,979 (2,185 )
(64,987 ) 28,794 47,298 Purchase of ALOG, less cash acquired
(41,954 ) - - (41,954 ) - Purchase of Switch and Data, less cash
acquired - - (113,289 ) - (113,289 ) Purchase of Frankfurt IBX
property (9,042 ) - - (9,042 ) - Purchase of Paris IBX property -
(14,951 ) - (14,951 ) - Purchases of property and equipment
(188,875 ) (175,115 ) (148,705 ) (363,990 ) (292,105 ) Other
investing activities (845 ) (94,138 ) (474 )
(94,983 ) (916 )
Net cash used in investing
activities (209,737 )
(286,389 ) (327,455 )
(496,126 ) (359,012 ) Cash flows
from financing activities: Proceeds from employee equity awards
8,929 15,668 11,270 24,597 22,153 Proceeds from loans payable
55,264 22,653 98,958 77,917 98,958 Proceeds from senior notes - - -
- 750,000 Repayment of capital lease and other financing
obligations (2,355 ) (1,968 ) (10,847 ) (4,323 ) (12,401 )
Repayment of mortgage and loans payable - (10,102 ) (343,688 )
(10,102 ) (458,028 ) Debt issuance costs -
(125 ) (7,926 ) (125 ) (23,119 )
Net cash
provided by (used in) financing activities 61,838
26,126 (252,233 )
87,964 377,563 Effect of
foreign currency exchange rates on cash and cash equivalents
957 4,118 (5,178 ) 5,075
(9,983 ) Net increase (decrease) in cash and cash
equivalents (6,594 ) (138,375 ) (527,960 ) (144,969 ) 165,286 Cash
and cash equivalents at beginning of period 304,466
442,841 1,039,302 442,841
346,056
Cash and cash equivalents at end of
period $ 297,872 $ 304,466
$ 511,342 $ 297,872
$ 511,342 Free cash
flow (1) $ (100,368 ) $
(166,434 ) $ (205,562 ) $
(266,802 ) $ (249,592 )
Adjusted free cash flow (2) $ (49,372 )
$ (151,483 ) $ (92,273 )
$ (200,855 ) $ (136,303 )
(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
$ 140,348 $ 117,770 $ 56,906 $ 258,118 $ 156,718 Net cash used in
investing activities as presented above (209,737 ) (286,389 )
(327,455 ) (496,126 ) (359,012 ) Purchases, sales and maturities of
investments, net (30,979 ) 2,185 64,987
(28,794 ) (47,298 ) Free cash flow (negative
free cash flow) $ (100,368 ) $ (166,434 ) $ (205,562 ) $ (266,802 )
$ (249,592 ) (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) $ (100,368 ) $ (166,434 )
$ (205,562 ) $ (266,802 ) $ (249,592 ) Less purchase of ALOG, less
cash acquired 41,954 - - 41,954 - Less purchase of Switch and Data,
less cash acquired - - 113,289 - 113,289 Less purchase of Frankfurt
IBX property 9,042 - - 9,042 - Less purchase of Paris IBX property
- 14,951 - 14,951
- Adjusted free cash flow (negative adjusted
free cash flow) $ (49,372 ) $ (151,483 ) $ (92,273 ) $ (200,855 ) $
(136,303 )
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