EX-99.1 2 a6482935_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

Equinix Reports Third Quarter 2010 Results

  • Reported revenues of $330.3 million, a 12% increase over the previous quarter and a 45% increase over the same quarter last year
  • Reported adjusted EBITDA of $146.5 million, an 11% increase over the previous quarter and a 38% increase over the same quarter last year
  • Announced 2010 annual revenue guidance of $1,216.0 million to $1,218.0 million and increased 2010 adjusted EBITDA guidance to approximately $542.0 million
  • Announced initial guidance for 2011 including annual revenues to be greater than $1,500.0 million, adjusted EBITDA to be greater than $675.0 million and total capital expenditures to be approximately $400.0 million

FOSTER CITY, Calif.--(BUSINESS WIRE)--October 26, 2010--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  

CONTACT:
Equinix, Inc.
Joan Powell, 650-513-7098 (Media)
joanpowell@equinix.com
Jason Starr, 650-513-7402 (Investor Relations)
jstarr@equinix.com
or
LEWIS PR
Scott Blevins, 415-992–4400 (Media)
equinixlewisus@lewispr.com