REDWOOD CITY, Calif.,
May 4, 2016 /PRNewswire/ -- Equinix,
Inc. (Nasdaq: EQIX), a global interconnection and data center
company, today reported quarterly results for the quarter ended
March 31, 2016. The Company
uses certain non-GAAP financial measures, which are described
further below and reconciled to the most comparable GAAP financial
measures after the presentation of our GAAP financial
statements.
First Quarter 2016 Results Summary
- Revenues from continuing operations
- $844.2 million, a 16% increase
over the previous quarter
- Includes $34.2 million of
revenues from Bit-isle
- Includes $84.4 million of
revenues from Telecity
- Operating Income
- $112.7 million, a 17% decrease
from the previous quarter
- Adjusted EBITDA
- $380.7 million, a 45% adjusted
EBITDA margin
- Includes $11.6 million of
adjusted EBITDA from Bit-isle
- Includes $40.7 million of
adjusted EBITDA from Telecity
- Includes $13.3 million of
integration costs
- Net Loss from Continuing Operations
- AFFO
- $209.8 million, an 18% increase
over the previous quarter
- Includes $63.5 million of foreign
currency losses related to the Telecity transaction and
$13.3 million of integration
costs
2016 Annual Guidance Summary
- Revenues from continuing operations
- >$3,595.0 million, a 32%
increase over the previous year; an organic and constant currency
growth rate of greater than 13.4%
- Assumes $565.0 million in
revenues from Telecity and Bit-isle
- Adjusted EBITDA
- > $1,650.0 million or a 45.9%
adjusted EBITDA margin
- Assumes 100 basis point YoY improvement in adjusted EBITDA for
the Equinix organic business
- Assumes $255.0 million of
adjusted EBITDA from Telecity and Bit-isle
- Assumes $55.0 million of
integration costs for acquisitions
- AFFO
- > $1,015.0 million, a 22%
increase over the previous year
- Assumes a $63.5 million foreign
currency loss related to the Telecity acquisition
- Assumes $55.0 million of
integration costs for acquisitions
This quarter includes the quarterly results of Bit-isle and
Telecity, which were acquired by the Company in November 2015 and January
2016, respectively. In addition, in order to obtain the
approval of the European Commission for the acquisition of
Telecity, the Company and Telecity agreed to divest certain data
centers, including Equinix's London 2 International Business Exchange™
(IBX®) in London, UK ("LD2") and
certain Telecity data centers. The financial results include
results from Equinix's London 2 in
continuing operations; however, the data centers in Telecity that
are to be divested are reported as discontinued operations.
Revenues from continuing operations were $844.2 million for the first quarter, a 16%
increase over the previous quarter and a 31% increase over the same
quarter last year. This result includes $118.6 million of revenues from the acquisitions
of Bit-isle and Telecity. Recurring revenues, consisting primarily
of colocation, interconnection and managed services, were
$797.1 million for the first quarter,
a 16% increase over the previous quarter and a 31% increase over
the same quarter last year. Non-recurring revenues were
$47.1 million in the quarter.
MRR churn for the first quarter was 2.2% as compared to 2.3%
in the previous quarter.
"2016 is off to a strong start with both revenue and adjusted
EBITDA above the top end of our guidance ranges for the first
quarter," said Steve Smith,
president and CEO of Equinix. "We continue to see strength in
all three regions as the scale of our global platform addresses the
growing demand for businesses as they move to distributed
infrastructure environments and re-architect their IT delivery
to better interconnect people, locations, clouds and data.
With the integration of Telecity and Bit-isle, our reach now spans
21 countries, 40 metros and 145 IBX centers, enabling customers to
reach all of the world's top business markets. This global
scale provides a critical source of differentiation for the company
and a strong platform for continued growth."
Cost of revenues was $427.7
million for the first quarter, a 22% increase from the
previous quarter and a 43% increase from the same quarter last
year. Cost of revenues, excluding depreciation, amortization,
accretion and stock-based compensation of $156.6 million for the quarter, which we refer to
as cash cost of revenues, was $271.1
million for the quarter, a 19% increase over the previous
quarter and a 41% increase over the same quarter last year.
Gross margins for the quarter were 49%, as compared to 52%
for the previous quarter and 54% for the same quarter last year.
Cash gross margins, defined as gross profit before depreciation,
amortization, accretion and stock-based compensation, divided by
revenues, were 68% for the quarter, 69% for the previous quarter
and 70% for the same quarter last year.
Selling, general and administrative expenses were $272.5 million for the first quarter, a 21%
increase over the previous quarter and a 42% increase over the same
quarter last year. Selling, general and administrative expenses,
excluding depreciation, amortization, accretion and stock-based
compensation of $80.1 million for the
quarter, which we refer to as cash selling, general and
administrative expenses, were $192.4
million for the quarter, a 14% increase from the previous
quarter and a 32% increase over the same quarter last
year.
Interest expense was $100.9
million for the first quarter, a 27% increase from the
previous quarter and a 47% increase from the same quarter last
year, primarily attributed to the debt financings in November 2015 and other financings such as
various capital lease and other financing obligations related to
the Telecity and Bit-isle acquisitions.
The Company recorded an income tax benefit from continuing
operations of $10.6 million for the
first quarter as compared to an income tax benefit of $2.1 million for the previous quarter and income
tax expense from continuing operations of $6.2 million for the same quarter last year.
Net income from discontinued operations was $6.2 million for the first quarter.
Net loss from continuing operations was $37.3 million for the first quarter. This
represents a basic and diluted net loss per share from continuing
operations of $0.55 for the first
quarter based on a weighted average basic and diluted share count
of 68.1 million shares. Basic and diluted net income per share from
discontinued operations was $0.09 per
share.
Income from continuing operations was $112.7 million for the first quarter, a 17%
decrease from the previous quarter and a 26% decrease over the same
quarter last year. Adjusted EBITDA, as defined below, for the
first quarter was $380.7 million, a
14% increase over the previous quarter and a 24% increase over the
same quarter last year. Adjusted EBITDA includes $52.3 million from the acquisitions of Bit-isle
and Telecity.
Adjusted funds from operations ("AFFO"), as defined below, were
$209.8 million for the first quarter,
an 18% increase from the previous quarter and a 5% decrease over
the same quarter last year. This represents a basic AFFO per share
attributable to the Company of $3.08
for the first quarter and a diluted AFFO per share attributable to
the Company of $2.98 for the first
quarter. AFFO for the first quarter includes a foreign currency
exchange loss of $63.5 million
primarily attributed to the Telecity acquisition, and $13.3 million of integration costs.
Capital expenditures, defined as gross capital expenditures less
the net change in accrued property, plant and equipment in the
first quarter, were $197.7 million,
as compared to capital expenditures of $280.6 million for the previous quarter and
$150.1 million for the same quarter
last year.
The Company generated cash from operating activities of
$104.3 million for the first quarter
as compared to cash generated from operating activities of
$235.1 million in the previous
quarter. Cash used in investing activities was $1.3 billion in the first quarter, primarily
attributable to the Telecity acquisition, as compared to cash used
in investing activities of $529.0
million in the previous quarter. Cash used in financing
activities was $376.4 million for the
first quarter as compared to cash from financing activities of
$2.2 billion in the previous
quarter.
As of March 31, 2016, the
Company's cash, cash equivalents and investments were $650.1 million, as compared to $2,246.3 million as of December 31, 2015.
Business Outlook
Equinix guidance includes forecasted results for Telecity from
January 15, 2016 and Bit-isle for the
full year of 2016. As previously announced, Equinix expects
to divest eight assets, seven from Telecity along with Equinix's
London 2 IBX center (LD2), as part
of regulatory clearance for the transaction received on
November 13, 2015. The Company
expects to complete these divestitures by mid-2016. The
Company's guidance does not include the seven Telecity assets,
which will be treated as discontinued operations, but does assume 6
months, or $6.2 million in revenues,
from LD2, which is under a different accounting treatment that
requires results to be reported as continuing operations until
completion of the sale.
For the second quarter of 2016, the Company expects revenues to
range between $893.0 and $899.0
million, or a normalized and constant currency growth
rate of 2.5% quarter over quarter. This guidance includes a
positive foreign currency impact of $12.6
million when compared to the average FX rates in Q1 2016.
Cash gross margins are expected to approximate 67-68%.
Cash selling, general and administrative expenses are expected to
range between $195.0 and $201.0
million. Adjusted EBITDA is expected to range between
$403.0 and $409.0 million, which
includes a $6.8 million positive
foreign currency impact when compared to the average FX rates in Q1
2016 and $15.2 million in integration
costs from the two acquisitions. Capital expenditures are expected
to range between $322.0 and $342.0
million, which includes approximately $42.0 million of recurring capital expenditures
and $280.0 to $300.0 million of
non-recurring capital expenditures.
For the full year of 2016, total revenues are expected to be
greater than $3,595.0 million, an
organic and constant currency growth rate of greater than 13.4%
year over year. This guidance includes a positive foreign
currency impact of $42.4 million on
revenues when compared to prior Equinix guidance rates, and
includes an expected $565.0 million
in revenues from the Telecity and Bit-isle acquisitions.
Total year cash gross margins are expected to approximate
67-68%. Cash selling, general and administrative
expenses are expected to range between $775.0 and $795.0 million. Adjusted EBITDA
is expected to be greater than $1,650.0
million, or a year over year organic and constant currency
growth rate of 16.2%. This guidance includes $16.4 million of positive foreign currency impact
on adjusted EBITDA when compared to prior Equinix guidance rates,
an expected $255.0 million in
adjusted EBITDA from the Telecity and Bit-isle acquisitions, as
well as $55.0 million in integration
costs for these two acquisitions. AFFO is expected to be
greater than $1,015.0 million,
including integration costs and $63.5 million foreign currency
loss attributed to the Telecity acquisition. Capital
expenditures are expected to range between $900.0 and $1,000.0 million, including
approximately $145.0 million of
recurring capital expenditures and $755.0 to
$855.0 million of non-recurring capital
expenditures.
The U.S. dollar exchange rates used for 2016 guidance, taking
into consideration the impact of our foreign currency hedges, have
been updated to $1.13 to the Euro,
$1.49 to the Pound, S$1.36 to the U.S. dollar, ¥110.0 to the
U.S. dollar and R$3.67 to the U.S.
dollar. The 2016 global revenue breakdown by currency for the Euro,
Pound, Japanese Yen, Singapore Dollar and Brazilian Real is 17%,
11%, 7%, 6% and 2%, respectively.
The guidance provided above is forward-looking and includes the
impact of the Company's acquisition of Telecity, which closed on
January 15, 2016. The adjusted
EBITDA guidance is based on the revenue guidance less our
expectations of cash cost of revenues and cash operating
expenses. The AFFO guidance is based on the adjusted EBITDA
guidance less our expectations of net interest expense, an
installation revenue adjustment, a straight-line rent expense
adjustment, amortization of deferred financing costs, gains
(losses) on debt extinguishment, an income tax expense adjustment,
recurring capital expenditures and adjustments for unconsolidated
joint ventures' and non-controlling interests' share of these
items.
Q1 Results Conference Call and Replay Information
The Company will discuss its quarterly results for the period
ended March 31, 2016, along with its
future outlook, in its quarterly conference call on Wednesday, May 4, 2016, at 5:30 p.m. ET (2:30 p.m.
PT). A simultaneous live webcast of the call will be
available on the Company's Investor Relations website at
www.equinix.com/investors. To hear the conference call live, please
dial 1-210-234-8004 (domestic and international) and reference the
passcode EQIX.
A replay of the call will be available one hour after the call,
through Friday, July 22, 2016, by
dialing 1-203-369-1542 and referencing the passcode 2016. In
addition, the webcast will be available at
www.equinix.com/investors. No password is required for the
webcast.
Investor Presentation and Supplemental Financial
Information
The Company has made available on its website a presentation
designed to accompany the discussion of the Company's results and
future outlook, along with certain supplemental financial
information and other data. Interested parties may access this
information through the Company's Investor Relations website at
www.equinix.com/investors.
Additional Resources
- Q1 2016 financial earnings press release (PDF)
- Q1 2016 financial tables (PDF)
About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects the world's leading
businesses to their customers, employees and partners inside the
most interconnected data centers. In 40 markets across five
continents, Equinix is where companies come together to realize new
opportunities and accelerate their business, IT and cloud
strategies.
Non-GAAP Financial Measures
The Company 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, the Company uses non-GAAP financial measures to
evaluate its operations.
In presenting 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, the Company 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, impairment charges,
acquisition costs, and gains on asset sales. The Company
excludes these items in order for its lenders, investors, and the
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.
The Company excludes depreciation expense as these charges
primarily relate to the initial construction costs of an IBX
center, and do not reflect its current or future cash spending
levels to support its business. Its IBX centers are
long-lived assets, and have an economic life greater than 10 years.
The construction costs of an IBX center do not recur with respect
to such data center, although the Company may incur initial
construction costs in future periods with respect to additional IBX
centers, and future capital expenditures remain minor relative to
the initial investment. This is a trend it expects to
continue. In addition, depreciation is also based on the
estimated useful lives of the 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, the Company excludes depreciation
from its operating results when evaluating its operations.
In addition, in presenting the non-GAAP financial measures, the
Company also excludes amortization expense related to certain
intangible assets, as it is not meaningful in evaluating the
Company's current or future operating performance. The Company
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 the Company also
believes are not meaningful in evaluating the Company's current
operations. The Company excludes stock-based compensation expense
as it represents expense attributed to equity awards that have no
current or future cash obligations. As such, the Company, and
many investors and analysts, exclude this stock-based compensation
expense when assessing the cash generating performance of our
operations. The Company 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 its IBX centers, which it did not intend to build out,
or its decision to reverse such restructuring charges. The
Company also excludes impairment charges related to certain
long-lived assets. The impairment charges are related to expense
recognized whenever events or changes in circumstances indicate
that the carrying amount of long-lived assets are not recoverable.
The Company also excludes gains on asset sales as it represents
profit that may not recur and is not meaningful in evaluating the
current or future operating performance. Finally, the Company
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 items such as restructuring charges, impairment charges,
acquisition costs, and gains on asset sales are non-core
transactions; however, these types of costs may occur in future
periods.
The Company presents adjusted EBITDA, which is a non-GAAP
financial measure. Adjusted EBITDA represents income or loss from
operations plus depreciation, amortization, accretion, stock-based
compensation expense, restructuring charges, impairment charges,
acquisition costs and gains on asset sales.
The Company also presents funds from operations ("FFO") and
adjusted funds from operations ("AFFO"), which are non-GAAP
financial measures commonly used in the REIT industry. FFO is
calculated in accordance with the definition established by the
National Association of Real Estate Investment Trusts ("NAREIT").
FFO represents net income (loss), excluding gains (losses) from the
disposition of real estate assets, depreciation and amortization on
real estate assets and adjustments for unconsolidated joint
ventures' and non-controlling interests' share of these
items. AFFO represents FFO, excluding depreciation and
amortization expense on non-real estate assets, accretion,
stock-based compensation, restructuring charges, impairment
charges, acquisition costs, an installation revenue adjustment, a
straight-line rent expense adjustment, amortization of deferred
financing costs, gains (losses) on debt extinguishment, an income
tax expense adjustment, recurring capital expenditures, net income
from discontinued operations, net of tax and adjustments from FFO
to AFFO for unconsolidated joint ventures' and non-controlling
interests' share of these items. Equinix excludes depreciation
expense, amortization expense, accretion, stock-based compensation,
restructuring charges, impairment charges and acquisition charges
for the same reasons that they are excluded from the other non-GAAP
financial measures mentioned above.
The Company includes an adjustment for revenue from installation
fees, since installation fees are deferred and recognized ratably
over the expected life of the installation, although the fees are
generally paid in a lump sum upon installation. The Company
includes an adjustment for straight-line rent expense on its
operating leases, since the total minimum lease payments are
recognized ratably over the lease term, although the lease payments
generally increase over the lease term. The adjustments for
both installation revenue and straight-line rent expense are
intended to isolate the cash activity included within the
straight-lined or amortized results in the consolidated statement
of operations. The Company excludes the amortization of deferred
financing costs as these expenses relate to the initial costs
incurred in connection with its debt financings that have no
current or future cash obligations. The Company excludes gains
(losses) on debt extinguishment since it represents a cost that may
not recur and is not a good indicator of the Company's current or
future operating performance. The Company includes an income tax
expense adjustment, which represents changes in its income tax
reserves and valuation allowances that may not recur or may not
relate to the current year's operations. The Company also excludes
recurring capital expenditures, which represent expenditures to
extend the useful life of its IBX centers or other assets that are
required to support current revenues. The Company also excludes net
income from discontinued operations, net of tax, which represents
profit that may not recur and is not a good indicator of our
current or future operating performance.
Non-GAAP financial measures are not a substitute for financial
information prepared in accordance with GAAP. Non-GAAP
financial measures should not be considered in isolation, but
should be considered together with the most directly comparable
GAAP financial measures and the reconciliation of the non-GAAP
financial measures to the most directly comparable GAPP financials
measures. The Company presents 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 its 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. The
Company believes that if it did not provide such non-GAAP financial
information, investors would not have all the necessary data to
analyze the Company effectively.
Investors should note that the non-GAAP financial measures used
by the Company may not be the same non-GAAP financial measures, and
may not be calculated in the same manner, as those of other
companies. Investors should, therefore, exercise caution when
comparing non-GAAP financial measures used by us to similarly
titled non-GAAP financial measures of other companies. 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. The Company
intends to calculate the various non-GAAP financial measures in
future periods consistent with how they were 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
|
(in thousands,
except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
|
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
$ 797,094
|
|
$
686,072
|
|
$
609,657
|
|
Non-recurring
revenues
|
|
47,062
|
|
44,390
|
|
33,517
|
|
|
Revenues
|
|
844,156
|
|
730,462
|
|
643,174
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
427,680
|
|
351,968
|
|
298,313
|
|
|
|
Gross
profit
|
416,476
|
|
378,494
|
|
344,861
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
106,590
|
|
88,439
|
|
78,616
|
|
|
General and
administrative
|
165,904
|
|
136,829
|
|
113,640
|
|
|
Acquisition
costs
|
36,536
|
|
17,349
|
|
1,156
|
|
|
Gains on asset
sales
|
(5,242)
|
|
-
|
|
-
|
|
|
|
Total operating
expenses
|
303,788
|
|
242,617
|
|
193,412
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
112,688
|
|
135,877
|
|
151,449
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income (expense):
|
|
|
|
|
|
|
|
Interest
income
|
|
925
|
|
1,206
|
|
520
|
|
|
Interest
expense
|
(100,863)
|
|
(79,499)
|
|
(68,791)
|
|
|
Loss on debt
extinguishment
|
-
|
|
(289)
|
|
-
|
|
|
Other
expense
|
|
(60,710)
|
|
(48,617)
|
|
(514)
|
|
|
|
Total interest and
other, net
|
(160,648)
|
|
(127,199)
|
|
(68,785)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
(47,960)
|
|
8,678
|
|
82,664
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
10,633
|
|
2,053
|
|
(6,212)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations
|
(37,327)
|
|
10,731
|
|
76,452
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
discontinued operations, net of tax
|
6,216
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
(31,111)
|
|
$
10,731
|
|
$
76,452
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share from continuing operations
|
$
(0.55)
|
|
$
0.18
|
|
$
1.35
|
|
|
Basic net income
(loss) per share from discontinued operations
|
0.09
|
|
-
|
|
-
|
|
|
Basic net income
(loss) per share
|
$
(0.46)
|
|
$
0.18
|
|
$
1.35
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share from continuing operations
|
$
(0.55)
|
|
$
0.18
|
|
$
1.34
|
|
|
Diluted net income
(loss) per share from discontinued operations
|
0.09
|
|
-
|
|
-
|
|
|
Diluted net income
(loss) per share
|
$
(0.46)
|
|
$
0.18
|
|
$
1.34
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic net income (loss) per share
|
68,132
|
|
60,393
|
|
56,661
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing diluted net income (loss) per share
|
68,132
|
|
60,943
|
|
57,227
|
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
(31,111)
|
|
$
10,731
|
|
$
76,452
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
|
|
Foreign
currency translation adjustment ("CTA") gain
(loss)
|
111,415
|
|
(37,217)
|
|
(146,311)
|
|
Unrealized gain
(loss) on available-for-sale securities
|
(304)
|
|
(139)
|
|
103
|
|
Unrealized gain
(loss) on cash flow hedges
|
(6,784)
|
|
4,975
|
|
10,556
|
|
Net investment
hedge CTA gain (loss)
|
(11,828)
|
|
10,447
|
|
-
|
|
Net actuarial
gain on defined benefit plans
|
6
|
|
887
|
|
59
|
Other
comprehensive income (loss), net of tax:
|
92,505
|
|
(21,047)
|
|
(135,593)
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss), net of
tax
|
61,394
|
|
(10,316)
|
|
(59,141)
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Assets
|
March
31,
|
|
December
31,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
633,758
|
|
$ 2,228,838
|
Short-term
investments
|
12,353
|
|
12,875
|
Accounts receivable,
net
|
326,440
|
|
291,964
|
Current portion of
restricted cash
|
3,420
|
|
479,417
|
Other current
assets
|
236,466
|
|
212,929
|
Assets held for
sale
|
955,904
|
|
33,257
|
|
Total current
assets
|
2,168,341
|
|
3,259,280
|
Long-term
investments
|
3,969
|
|
4,584
|
Property, plant and
equipment, net
|
6,888,232
|
|
5,606,436
|
Goodwill
|
|
|
3,336,968
|
|
1,063,200
|
Intangible assets,
net
|
867,536
|
|
224,565
|
Other
assets
|
|
230,789
|
|
198,630
|
|
Total
assets
|
$
13,495,835
|
|
$ 10,356,695
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
475,343
|
|
$
400,948
|
Accrued property and
equipment
|
124,684
|
|
103,107
|
Current portion of
capital lease and other financing obligations
|
48,325
|
|
40,121
|
Current portion of
mortgage and loans payable
|
487,065
|
|
770,236
|
Current portion of
convertible debt
|
148,282
|
|
146,121
|
Other current
liabilities
|
171,925
|
|
192,286
|
Liabilities held for
sale
|
124,571
|
|
3,535
|
|
Total current
liabilities
|
1,580,195
|
|
1,656,354
|
Capital lease and
other financing obligations, less current portion
|
1,552,145
|
|
1,287,139
|
Mortgage and loans
payable, less current portion
|
1,139,807
|
|
472,769
|
Senior
notes
|
|
3,806,167
|
|
3,804,634
|
Other
liabilities
|
|
598,416
|
|
390,413
|
|
Total
liabilities
|
8,676,730
|
|
7,611,309
|
|
|
|
|
|
|
|
Common
stock
|
|
69
|
|
62
|
Additional paid-in
capital
|
6,973,460
|
|
4,838,444
|
Treasury
stock
|
|
(6,635)
|
|
(7,373)
|
Accumulated
dividends
|
(1,591,908)
|
|
(1,468,472)
|
Accumulated other
comprehensive loss
|
(416,554)
|
|
(509,059)
|
Accumulated
deficit
|
(139,327)
|
|
(108,216)
|
|
Total
stockholders' equity
|
4,819,105
|
|
2,745,386
|
|
Total liabilities
and stockholders' equity
|
$
13,495,835
|
|
$ 10,356,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending headcount by
geographic region is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Americas
headcount
|
2,371
|
|
2,329
|
|
EMEA
headcount
|
2,019
|
|
1,188
|
|
Asia-Pacific
headcount
|
1,326
|
|
1,525
|
|
|
Total
headcount
|
5,716
|
|
5,042
|
EQUINIX,
INC.
|
SUMMARY OF DEBT
PRINCIPAL OUTSTANDING
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Capital lease and
other financing obligations
|
$
1,600,470
|
|
$
1,327,260
|
|
|
|
|
|
|
|
Term loan, net of
debt discount and debt issuance costs
|
1,124,490
|
|
454,503
|
Brazil financings,
net of debt issuance costs
|
28,473
|
|
26,668
|
Mortgage payable and
other loans payable
|
473,909
|
|
436,212
|
Revolving credit
facility borrowings
|
-
|
|
325,622
|
Plus: debt discount,
debt issuance costs and premium, net
|
13,830
|
|
694
|
|
Total mortgage and
loans payable principal
|
1,640,702
|
|
1,243,699
|
|
|
|
|
|
|
|
Senior notes, net of
debt issuance costs
|
3,806,167
|
|
3,804,634
|
Plus: debt issuance
costs
|
43,833
|
|
45,366
|
|
Total senior notes
principal
|
3,850,000
|
|
3,850,000
|
|
|
|
|
|
|
|
Convertible debt, net
of debt discount and debt issuance costs
|
148,282
|
|
146,121
|
Plus: debt discount
and debt issuance costs
|
1,800
|
|
3,961
|
|
Total convertible
debt principal
|
150,082
|
|
150,082
|
|
|
|
|
|
|
|
Total debt principal
outstanding
|
$
7,241,254
|
|
$
6,571,041
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
|
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
(loss)
|
$
(31,111)
|
|
$
10,731
|
|
$
76,452
|
|
Adjustments to
reconcile net income (loss) to net cash
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation,
amortization and accretion
|
202,153
|
|
144,861
|
|
122,530
|
|
|
Stock-based
compensation
|
34,061
|
|
33,868
|
|
30,613
|
|
|
Amortization of debt
issuance costs and debt discounts
|
5,508
|
|
4,493
|
|
3,774
|
|
|
Gains on asset
sales
|
(5,242)
|
|
-
|
|
-
|
|
|
Other
items
|
4,871
|
|
5,741
|
|
4,162
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(11,312)
|
|
(2,581)
|
|
(30,791)
|
|
|
|
Income taxes,
net
|
(28,656)
|
|
(25,056)
|
|
(12,555)
|
|
|
|
Accounts payable and
accrued expenses
|
(40,217)
|
|
33,906
|
|
29,693
|
|
|
|
Other assets and
liabilities
|
(25,785)
|
|
29,155
|
|
8,933
|
|
|
|
|
Net cash provided
by operating activities
|
104,270
|
|
235,118
|
|
232,811
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Purchases, sales and
maturities of investments, net
|
3,419
|
|
(9,369)
|
|
(4,706)
|
|
Business
acquisitions, net of cash acquired
|
(1,601,627)
|
|
(235,306)
|
|
(10,247)
|
|
Purchases of real
estate
|
(16,408)
|
|
-
|
|
(38,282)
|
|
Purchases of other
property, plant and equipment
|
(197,700)
|
|
(280,612)
|
|
(150,120)
|
|
Proceeds from asset
sales
|
22,825
|
|
-
|
|
-
|
|
Other investing
activities
|
466,704
|
|
(3,709)
|
|
3,521
|
|
|
|
|
Net cash used in
investing activities
|
(1,322,787)
|
|
(528,996)
|
|
(199,834)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Proceeds from
employee equity awards
|
16,304
|
|
185
|
|
16,384
|
|
Payment of dividend
distributions
|
(124,836)
|
|
(230,452)
|
|
(96,619)
|
|
Proceeds from public
offering of common stock, net of issuance costs
|
-
|
|
829,496
|
|
-
|
|
Proceeds from loans
payable
|
701,250
|
|
707,108
|
|
-
|
|
Proceeds from senior
notes
|
-
|
|
1,100,000
|
|
-
|
|
Repayment of capital
lease and other financing obligations
|
(33,232)
|
|
(8,450)
|
|
(5,296)
|
|
Repayment of mortgage
and loans payable
|
(936,353)
|
|
(185,823)
|
|
(13,361)
|
|
Other financing
activities
|
499
|
|
(19,114)
|
|
98
|
|
|
|
|
Net cash provided
by (used in) financing activities
|
(376,368)
|
|
2,192,950
|
|
(98,794)
|
Effect of foreign
currency exchange rates on cash and cash equivalents
|
(195)
|
|
(5,703)
|
|
(8,391)
|
Net increase
(decrease) in cash and cash equivalents
|
(1,595,080)
|
|
1,893,369
|
|
(74,208)
|
Cash and cash
equivalents at beginning of period
|
2,228,838
|
|
335,469
|
|
610,917
|
Cash and cash
equivalents at end of period
|
$
633,758
|
|
$ 2,228,838
|
|
$
536,709
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
Cash paid for
taxes
|
$
19,215
|
|
$
29,165
|
|
$
14,538
|
|
|
Cash paid for
interest
|
$
74,540
|
|
$
73,044
|
|
$
23,976
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(1)
|
$
(1,221,936)
|
|
$
(284,509)
|
|
$
37,683
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash
flow (2)
|
$
396,663
|
|
$
(33,081)
|
|
$
87,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We define free cash
flow as net cash provided by operating activities plus net cash
provided by (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
|
$
104,270
|
|
$
235,118
|
|
$
232,811
|
|
Net cash used in
investing activities as presented above
|
(1,322,787)
|
|
(528,996)
|
|
(199,834)
|
|
Purchases, sales and
maturities of investments, net
|
(3,419)
|
|
9,369
|
|
4,706
|
|
|
Free cash flow
(negative free cash flow)
|
$
(1,221,936)
|
|
$ (284,509)
|
|
$
37,683
|
|
|
|
|
|
|
|
|
|
|
(2)
|
We define adjusted
free cash flow as free cash flow (as defined above) excluding any
purchases of real estate, acquisitions,
|
|
|
|
any excess tax
benefits from employee equity awards, cash paid for taxes
associated with reclassifying our assets for
|
|
|
|
tax purposes
triggered by our conversion into a real estate investment trust
("REIT") and costs related to the
|
|
|
|
REIT conversion, as
presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (as
defined above)
|
$
(1,221,936)
|
|
$ (284,509)
|
|
$
37,683
|
|
Less business
acquisitions, net of cash
|
1,601,627
|
|
235,306
|
|
10,247
|
|
Less purchases of
real estate
|
16,408
|
|
-
|
|
38,282
|
|
Less excess tax
benefits from employee equity awards
|
564
|
|
(1,633)
|
|
708
|
|
Less cash paid for
taxes resulting from the REIT conversion
|
-
|
|
17,306
|
|
-
|
|
Less costs related to
the REIT conversion
|
-
|
|
449
|
|
746
|
|
|
Adjusted free cash
flow
|
$
396,663
|
|
$
(33,081)
|
|
$
87,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We categorize our
cash paid for taxes into cash paid for taxes resulting from the
REIT conversion (as defined above) and
|
|
|
|
other cash taxes
paid.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for taxes
resulting from the REIT conversion
|
$
-
|
|
$
17,306
|
|
$
-
|
|
Other cash taxes
paid
|
19,215
|
|
11,859
|
|
14,538
|
|
|
Total cash paid for
taxes
|
$
19,215
|
|
$
29,165
|
|
$
14,538
|
EQUINIX,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS FROM CONTINUING OPERATIONS -
NON-GAAP PRESENTATION
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
|
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
revenues
|
|
|
$
797,094
|
|
$
686,072
|
|
$
609,657
|
|
Non-recurring
revenues
|
|
47,062
|
|
44,390
|
|
33,517
|
|
|
Revenues
(1)
|
|
844,156
|
|
730,462
|
|
643,174
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost of revenues
(2)
|
271,100
|
|
227,956
|
|
192,130
|
|
|
|
|
Cash gross profit
(3)
|
573,056
|
|
502,506
|
|
451,044
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating
expenses (4):
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses (5)
|
79,692
|
|
72,069
|
|
63,820
|
|
|
Cash general and
administrative expenses (6)
|
112,714
|
|
97,292
|
|
81,476
|
|
|
|
|
Total cash
operating expenses (7)
|
192,406
|
|
169,361
|
|
145,296
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(8)
|
$
380,650
|
|
$
333,145
|
|
$
305,748
|
|
|
|
|
|
|
|
|
|
|
|
Cash gross margins
(9)
|
68%
|
|
69%
|
|
70%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margins (10)
|
45%
|
|
46%
|
|
48%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate (11)
|
42%
|
|
27%
|
|
225%
|
|
|
|
|
|
|
|
|
|
|
|
FFO
(12)
|
|
|
$
115,875
|
|
$
131,483
|
|
$
179,190
|
|
|
|
|
|
|
|
|
|
|
|
AFFO
(13)
|
|
|
$
209,846
|
|
$
178,293
|
|
$
221,756
|
|
|
|
|
|
|
|
|
|
|
|
Basic FFO per
share (14)
|
$
1.70
|
|
$
2.18
|
|
$
3.16
|
|
|
|
|
|
|
|
|
|
|
|
Diluted FFO per
share (14)
|
$
1.68
|
|
$
2.14
|
|
$
3.09
|
|
|
|
|
|
|
|
|
|
|
|
Basic AFFO per
share (15)
|
$
3.08
|
|
$
2.95
|
|
$
3.91
|
|
|
|
|
|
|
|
|
|
|
|
Diluted AFFO per
share (15)
|
$
2.98
|
|
$
2.85
|
|
$
3.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The geographic split
of our revenues on a services basis is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
$
282,321
|
|
$
275,779
|
|
$
257,932
|
|
|
Interconnection
|
85,936
|
|
83,168
|
|
75,086
|
|
|
Managed
infrastructure
|
11,170
|
|
10,974
|
|
13,295
|
|
|
Other
|
|
|
729
|
|
817
|
|
741
|
|
|
|
Recurring
revenues
|
380,156
|
|
370,738
|
|
347,054
|
|
|
Non-recurring
revenues
|
24,238
|
|
23,751
|
|
16,915
|
|
|
|
Revenues
|
404,394
|
|
394,489
|
|
363,969
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
214,178
|
|
146,879
|
|
132,735
|
|
|
Interconnection
|
19,700
|
|
16,775
|
|
13,048
|
|
|
Managed
infrastructure
|
18,560
|
|
7,619
|
|
5,783
|
|
|
Other
|
|
|
943
|
|
862
|
|
1,858
|
|
|
|
Recurring
revenues
|
253,381
|
|
172,135
|
|
153,424
|
|
|
Non-recurring
revenues
|
14,475
|
|
10,519
|
|
11,199
|
|
|
|
Revenues
|
267,856
|
|
182,654
|
|
164,623
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
123,394
|
|
112,498
|
|
90,878
|
|
|
Interconnection
|
21,569
|
|
18,979
|
|
13,524
|
|
|
Managed
infrastructure
|
15,006
|
|
9,447
|
|
4,777
|
|
|
Other
|
|
|
3,588
|
|
2,275
|
|
-
|
|
|
|
Recurring
revenues
|
163,557
|
|
143,199
|
|
109,179
|
|
|
Non-recurring
revenues
|
8,349
|
|
10,120
|
|
5,403
|
|
|
|
Revenues
|
171,906
|
|
153,319
|
|
114,582
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colocation
|
|
619,893
|
|
535,156
|
|
481,545
|
|
|
Interconnection
|
127,205
|
|
118,922
|
|
101,658
|
|
|
Managed
infrastructure
|
44,736
|
|
28,040
|
|
23,855
|
|
|
Other
|
|
|
5,260
|
|
3,954
|
|
2,599
|
|
|
|
Recurring
revenues
|
797,094
|
|
686,072
|
|
609,657
|
|
|
Non-recurring
revenues
|
47,062
|
|
44,390
|
|
33,517
|
|
|
|
Revenues
|
$
844,156
|
|
$
730,462
|
|
$
643,174
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
427,680
|
|
$
351,968
|
|
$
298,313
|
|
|
Depreciation,
amortization and accretion expense
|
(153,583)
|
|
(121,505)
|
|
(103,877)
|
|
|
Stock-based
compensation expense
|
(2,997)
|
|
(2,507)
|
|
(2,306)
|
|
|
|
Cash cost of
revenues
|
$
271,100
|
|
$
227,956
|
|
$
192,130
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our cash cost of revenues is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash cost of
revenues
|
$
109,020
|
|
$
107,640
|
|
$
95,162
|
|
|
EMEA cash cost of
revenues
|
101,509
|
|
64,089
|
|
58,494
|
|
|
Asia-Pacific cash
cost of revenues
|
60,571
|
|
56,227
|
|
38,474
|
|
|
|
Cash cost of
revenues
|
$
271,100
|
|
$
227,956
|
|
$
192,130
|
|
|
|
|
|
|
|
|
|
|
|
(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 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
|
$
106,590
|
|
$
88,439
|
|
$
78,616
|
|
|
Depreciation and
amortization expense
|
(17,127)
|
|
(7,329)
|
|
(6,085)
|
|
|
Stock-based
compensation expense
|
(9,771)
|
|
(9,041)
|
|
(8,711)
|
|
|
|
Cash sales and
marketing expenses
|
$
79,692
|
|
$
72,069
|
|
$
63,820
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
$
165,904
|
|
$
136,829
|
|
$
113,640
|
|
|
Depreciation and
amortization expense
|
(31,443)
|
|
(16,027)
|
|
(12,568)
|
|
|
Stock-based
compensation expense
|
(21,747)
|
|
(23,510)
|
|
(19,596)
|
|
|
|
Cash general and
administrative expenses
|
$
112,714
|
|
$
97,292
|
|
$
81,476
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
Our cash operating
expenses, or cash SG&A, as defined above, is presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash sales and
marketing expenses
|
$
79,692
|
|
$
72,069
|
|
$
63,820
|
|
|
Cash general and
administrative expenses
|
112,714
|
|
97,292
|
|
81,476
|
|
|
|
Cash
SG&A
|
$
192,406
|
|
$
169,361
|
|
$
145,296
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our cash operating expenses, or cash SG&A, is presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas cash
SG&A
|
$
110,914
|
|
$
106,035
|
|
$
96,073
|
|
|
EMEA cash
SG&A
|
54,858
|
|
36,971
|
|
30,098
|
|
|
Asia-Pacific cash
SG&A
|
26,634
|
|
26,355
|
|
19,125
|
|
|
|
Cash
SG&A
|
$
192,406
|
|
$
169,361
|
|
$
145,296
|
|
|
|
|
|
|
|
|
|
|
|
(8)
|
We define adjusted
EBITDA as income from continuning operations plus depreciation,
amortization, accretion, stock-based compensation expense, acquisition costs and gains on
asset sales as presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
112,688
|
|
$
135,877
|
|
$
151,449
|
|
|
Depreciation,
amortization and accretion expense
|
202,153
|
|
144,861
|
|
122,530
|
|
|
Stock-based
compensation expense
|
34,515
|
|
35,058
|
|
30,613
|
|
|
Acquisition
costs
|
36,536
|
|
17,349
|
|
1,156
|
|
|
Gains on asset
sales
|
(5,242)
|
|
-
|
|
-
|
|
|
|
Adjusted
EBITDA
|
$
380,650
|
|
$
333,145
|
|
$
305,748
|
|
|
|
|
|
|
|
|
|
|
|
|
The geographic split
of our adjusted EBITDA is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas income from
continuing operations
|
$
88,539
|
|
$
83,425
|
|
$
81,466
|
|
|
Americas
depreciation, amortization and accretion expense
|
76,720
|
|
73,023
|
|
66,811
|
|
|
Americas stock-based
compensation expense
|
24,329
|
|
25,576
|
|
23,491
|
|
|
Americas acquisition
costs
|
114
|
|
(1,210)
|
|
966
|
|
|
Americas gains on
asset sales
|
(5,242)
|
|
-
|
|
-
|
|
|
|
Americas adjusted
EBITDA
|
184,460
|
|
180,814
|
|
172,734
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA income from
continuing operations
|
(7,419)
|
|
34,011
|
|
45,541
|
|
|
EMEA depreciation,
amortization and accretion expense
|
76,488
|
|
30,434
|
|
26,693
|
|
|
EMEA stock-based
compensation expense
|
6,235
|
|
4,348
|
|
3,607
|
|
|
EMEA acquisition
costs
|
36,185
|
|
12,801
|
|
190
|
|
|
|
EMEA adjusted
EBITDA
|
111,489
|
|
81,594
|
|
76,031
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific income
from continuing operations
|
31,568
|
|
18,441
|
|
24,442
|
|
|
Asia-Pacific
depreciation, amortization and accretion expense
|
48,945
|
|
41,404
|
|
29,026
|
|
|
Asia-Pacific
stock-based compensation expense
|
3,951
|
|
5,134
|
|
3,515
|
|
|
Asia-Pacific
acquisition costs
|
237
|
|
5,758
|
|
-
|
|
|
|
Asia-Pacific adjusted
EBITDA
|
84,701
|
|
70,737
|
|
56,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
380,650
|
|
$
333,145
|
|
$
305,748
|
|
(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
|
73%
|
|
73%
|
|
74%
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA cash gross
margins
|
62%
|
|
65%
|
|
64%
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific cash
gross margins
|
65%
|
|
63%
|
|
66%
|
|
|
|
|
|
|
|
|
|
|
|
(10)
|
We define adjusted
EBITDA margins as adjusted EBITDA divided by revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas adjusted
EBITDA margins
|
46%
|
|
46%
|
|
47%
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA adjusted EBITDA
margins
|
42%
|
|
45%
|
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific adjusted
EBITDA margins
|
49%
|
|
46%
|
|
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
|
$
380,650
|
|
$
333,145
|
|
$
305,748
|
|
|
Less adjusted EBITDA
- prior period
|
(333,145)
|
|
(321,472)
|
|
(294,365)
|
|
|
|
Adjusted EBITDA
growth
|
$
47,505
|
|
$
11,673
|
|
$
11,383
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - current
period
|
$
844,156
|
|
$
730,462
|
|
$
643,174
|
|
|
Less revenues - prior
period
|
(730,462)
|
|
(686,649)
|
|
(638,121)
|
|
|
|
Revenue
growth
|
$
113,694
|
|
$
43,813
|
|
$
5,053
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
flow-through rate
|
42%
|
|
27%
|
|
225%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12)
|
FFO is defined as net
income (loss), excluding gains (losses) from the disposition of
real estate assets, depreciation and
amortization on real estate assets and adjustments for
unconsolidated joint ventures' and
non-controlling interests' share of
these items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(31,111)
|
|
$
10,731
|
|
$
76,452
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Real estate
depreciation and amortization
|
150,995
|
|
120,144
|
|
102,648
|
|
|
|
Gain/loss on
disposition of real estate property
|
(4,037)
|
|
579
|
|
62
|
|
|
|
Adjustments for FFO
from unconsolidated joint ventures
|
28
|
|
29
|
|
28
|
|
|
|
FFO
|
$
115,875
|
|
$
131,483
|
|
$
179,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13)
|
AFFO is defined as
FFO, excluding depreciation and amortization expense on non-real
estate assets, accretion, stock-based compensation, restructuring charges,
impairment charges, acquisition costs, an installation revenue
adjustment, a straight-line rent expense
adjustment, amortization of deferred financing costs, gains
(losses) on debt extinguishment, an
income tax expense adjustment, net income from discontined
operations, net of tax, recurring capital expenditures and
adjustments from FFO to AFFO for unconsolidated joint ventures' and non-controlling
interests' share of these
items.
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
|
$
115,875
|
|
$
131,483
|
|
$
179,190
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Installation revenue
adjustment
|
3,354
|
|
5,843
|
|
8,654
|
|
|
|
Straight-line rent
expense adjustment
|
1,133
|
|
1,462
|
|
3,201
|
|
|
|
Amortization of
deferred financing costs
|
5,508
|
|
4,495
|
|
3,858
|
|
|
|
Stock-based
compensation expense
|
34,515
|
|
35,058
|
|
30,613
|
|
|
|
Non-real estate
depreciation expense
|
21,387
|
|
15,921
|
|
12,693
|
|
|
|
Amortization
expense
|
28,152
|
|
8,100
|
|
6,295
|
|
|
|
Accretion
expense
|
1,619
|
|
696
|
|
894
|
|
|
|
Recurring capital
expenditures
|
(31,815)
|
|
(44,668)
|
|
(22,373)
|
|
|
|
Loss on debt
extinguishment
|
-
|
|
289
|
|
-
|
|
|
|
Acquisition
costs
|
36,536
|
|
17,349
|
|
1,156
|
|
|
|
Income tax expense
adjustment
|
(190)
|
|
2,279
|
|
(2,408)
|
|
|
|
Net Income from
discontinued operations, net of tax
|
(6,216)
|
|
-
|
|
-
|
|
|
|
Adjustments for AFFO
from unconsolidated joint ventures
|
(12)
|
|
(14)
|
|
(17)
|
|
|
|
AFFO
|
$
209,846
|
|
$
178,293
|
|
$
221,756
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
The FFO used in the
computation of basic and diluted FFO per share attributable to
Equinix is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, basic
|
|
$
115,875
|
|
$
131,483
|
|
$
179,190
|
|
|
|
Interest on
convertible debt
|
3,226
|
|
3,442
|
|
3,362
|
|
|
FFO,
diluted
|
|
$
119,101
|
|
$
134,925
|
|
$
182,552
|
|
|
|
|
|
|
|
|
|
|
|
|
The shares used in
the computation of basic and diluted FFO per share attributable to
Equinix is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic net income per share and FFO per
share
|
68,132
|
|
60,393
|
|
56,661
|
|
|
Effect of
dilutive securities:
|
|
|
|
|
|
|
|
|
Convertible
debt
|
1,969
|
|
2,041
|
|
1,942
|
|
|
|
Employee equity
awards
|
585
|
|
612
|
|
566
|
|
|
Shares used in
computing diluted FFO per share
|
70,686
|
|
63,046
|
|
59,169
|
|
|
|
|
|
|
|
|
|
|
|
(15)
|
The AFFO used in the
computation of basic and diluted AFFO per share attributable to
Equinix is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO,
basic
|
|
$
209,846
|
|
$
178,293
|
|
$
221,756
|
|
|
|
Interest on
convertible debt
|
1,062
|
|
1,557
|
|
1,554
|
|
|
AFFO,
diluted
|
|
$
210,908
|
|
$
179,850
|
|
$
223,310
|
|
|
|
|
|
|
|
|
|
|
|
|
The shares used in
the computation of basic and diluted AFFO per share attributable to
Equinix is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic net income per share and AFFO per
share
|
68,132
|
|
60,393
|
|
56,661
|
|
|
Effect of
dilutive securities:
|
|
|
|
|
|
|
|
|
Convertible
debt
|
1,969
|
|
2,041
|
|
1,942
|
|
|
|
Employee equity
awards
|
585
|
|
612
|
|
566
|
|
|
Shares used in
computing diluted AFFO per share
|
70,686
|
|
63,046
|
|
59,169
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/equinix-reports-first-quarter-2016-results-300262916.html
SOURCE Equinix, Inc.