<font> <font> Wednesday, July 22, 2009 4:00:03 PM ET </font> </font>
<font> --Increased quarterly adjusted EBITDA to $99.5 million, a 9% increase over the previous quarter and a 44% increase over the same quarter last year </font>
<font> --Announces 2009 annual revenue guidance of $860.0 million to $875.0 million and raises adjusted EBITDA guidance to $380.0 million to $390.0 million </font>
<font> Equinix, Inc. ( EQIX ), a provider of global data center services, today reported results for the quarter ended June 30, 2009. </font>
<font> Revenues were $213.2 million for the quarter, a 7% increase over the previous quarter, and a 24% increase over the same quarter last year. Recurring revenues, consisting primarily of colocation, interconnection and managed services, were $205.3 million for the second quarter, a 7% increase over the previous quarter, and a 26% increase over the same quarter last year. Non-recurring revenues were $7.9 million in the quarter, consisting primarily of professional services and installation fees. </font>
<font> Cost of revenues was $118.5 million for the quarter, a 6% increase over the previous quarter and a 16% increase over the same quarter last year. Excluding depreciation, amortization, accretion and stock-based compensation expense of $43.3 million for the quarter, cost of revenues was $75.2 million for the quarter, which the Company refers to as cash cost of revenues, a 5% increase over the previous quarter, and a 14% increase over the same quarter last year. Cash gross margins, defined as gross profit less depreciation, amortization, accretion and stock-based compensation expense, divided by revenues, for the quarter were 65%, up from 64% the previous quarter and up from 62% the same quarter last year. </font>
<font> Selling, general and administrative expenses were $53.8 million for the quarter, a 9% increase from the previous quarter and a 5% decrease over the same quarter last year. Excluding depreciation, amortization and stock-based compensation expense of $15.3 million for the quarter, selling, general and administrative expenses were $38.5 million for the quarter, which the Company refers to as cash selling, general and administrative expenses, a 7% increase over the previous quarter, and a 4% increase over the same quarter last year. Interest and other expenses, net, was $12.6 million for the quarter, a 24% decrease over the previous quarter, and a 2% decrease over the same quarter last year. </font>
<font> Net income for the second quarter was $17.4 million as compared to net income of $15.5 million in the previous quarter and net income of $0.7 million in the same quarter last year. This represents a basic net income per share of $0.46 and diluted net income per share of $0.44 based on a weighted average share count of 38.2 million and 39.3 million, respectively, for the second quarter of 2009. </font>
<font> Adjusted EBITDA, defined as income or loss from operations plus depreciation, amortization, accretion, stock-based compensation expense and restructuring charges, for the quarter was $99.5 million, an increase of 9% from the previous quarter, and up 44% from the same quarter last year. </font>
<font> "Equinix delivered another solid quarter and is on the way to another year of significant growth in a difficult environment," said Steve Smith, president and CEO of Equinix. "While we continue to monitor our leading indicators, given the strong first half performance, and the targeted expansions in key markets, we are well-positioned to deliver strong returns from our expansion decisions." </font>
<font> As of June 30, 2009, the Company’s cash, cash equivalents and investments were $603.4 million, as compared to $307.9 million as of December 31, 2008. </font>
<font> Capital expenditures in the second quarter were $76.8 million, of which $13.4 million was attributed to ongoing capital expenditures and $63.4 million was attributed to expansion capital expenditures. </font>
<font> Company Metrics </font>
<font> -- To view Equinix’s Non-Financial Metrics, please visit the Investors section of Equinix’s web site at www.equinix.com/investors and click on View Equinix’s Non-Financial Metrics </font>
<font> Adoption of Recent Accounting Pronouncements </font>
<font> As a result of the Company’s adoption of FASB Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion" and FASB Staff Position No. EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" effective January 1, 2009, the Company adjusted its comparative condensed consolidated financial statements previously issued to reflect such changes in accounting principle. </font>
<font> Business Outlook </font>
<font> For the third quarter of 2009, the Company expects revenues to be in the range of $221.0 to $225.0 million. Cash gross margins are expected to range between 63% and 64% and include incremental costs from expansion IBX centers opening in the quarter. Cash selling, general and administrative expenses are expected to be approximately $43.0 million. Adjusted EBITDA for the quarter is expected to be between $96.0 and $100.0 million, and excludes any costs associated with the Company’s recently announced Chicago 4 (CH4) IBX Shared Suite, which the Company is currently reviewing for lease accounting treatment. Capital expenditures for the third quarter of 2009 are expected to be $140.0 to $150.0 million, comprised of approximately $15.0 million of ongoing capital expenditures and $125.0 to $135.0 million of expansion capital expenditures. </font>
<font> For the full year of 2009, total revenues are expected to be in the range of $860.0 to $875.0 million. Total year cash gross margins are expected to range between 63% and 64% and include incremental costs from our expansion IBX centers opening throughout the remainder of the year. Cash selling, general and administrative expenses are expected to range between $160.0 million and $170.0 million. Adjusted EBITDA for the year is expected to be between $380.0 and $390.0 million, and excludes any costs associated with the Company’s recently announced Chicago 4 (CH4) IBX Shared Suite, which the Company is currently reviewing for lease accounting treatment. Capital expenditures for 2009 are expected to be approximately $375.0 million, comprised of approximately $60.0 million of ongoing capital expenditures and $315.0 million of expansion capital expenditures. Expansion capital expenditures are for the announced expansions in the Amsterdam, Chicago, Frankfurt, Hong Kong, London, Los Angeles, New York, Paris, Singapore, Sydney and Zurich markets. </font>
<font> The Company will discuss its results and guidance on its quarterly conference call on Wednesday, July 22, 2009, at 5:30 p.m. ET (2:30 p.m. PT). To hear the conference call live, please dial 1-773-756-4788 (domestic and international) and reference the passcode (EQIX). A simultaneous live Webcast of the call will be available over the Internet at www.equinix.com/investors. </font>
<font> A replay of the call will be available beginning on Wednesday, July 22, 2009, at 7:30 p.m. (ET) through August 22, 2009 by dialing 1-203-369-1278 and referencing the passcode (3749). In addition, the Webcast will be available on the company’s Web site at www.equinix.com/investors. </font>
<font> About Equinix </font>
<font> Equinix, Inc. ( EQIX ) provides global data center services that ensure the vitality of the information-driven world. Global enterprises, content and financial companies, and network service providers rely upon Equinix’s insight and expertise to protect and connect their most valued information assets. Equinix operates 43 International Business Exchange(TM) (IBX(R)) data centers across 18 markets in North America, Europe and Asia-Pacific. </font>
<font> Important information about Equinix is routinely posted on the investor relations page of its website located at www.equinix.com/investors. We encourage you to check Equinix’s website regularly for the most up-to-date information. </font>
<font> 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. </font>
<font> Equinix and IBX are registered trademarks of Equinix, Inc. International Business Exchange is a trademark of Equinix, Inc. </font>
<font> Non-GAAP Financial Measures </font>
<font> 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 non-cash or non-recurring items that it believes are not good indicators of the Company’s current or future operating performance. These non-cash or non-recurring items are depreciation, amortization, accretion, stock-based compensation and restructuring charges. 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 non-cash or non-recurring 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 competitor base. </font>
<font> 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 ten 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. </font>
<font> 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 charge liabilities, 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 stock 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. Management believes such items as restructuring charges are unique transactions that are not expected to recur, and consequently, does not consider these items as a normal component of expenses or income related to current and ongoing operations. </font>
<font> 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. </font>
<font> 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. </font>
<font> Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, 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 three and six months ended June 30, 2009 and 2008, presented within this press release. </font>
<font> EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP
PRESENTATION
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
As Adjusted As Adjusted
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
Recurring revenues $ 205,313 $ 191,287 $ 163,395 $ 396,600 $ 313,754
Non-recurring revenues 7,855 7,944 8,649 15,799 16,508
Revenues 213,168 199,231 172,044 412,399 330,262
Cost of revenues 118,534 111,805 102,039 230,339 196,548
Gross profit 94,634 87,426 70,005 182,060 133,714
Operating expenses:
Sales and marketing 16,369 14,403 15,290 30,772 30,641
General and administrative 37,456 35,150 41,445 72,606 75,821
Restructuring charges (220 ) (5,833 ) - (6,053 ) -
Total operating expenses 53,605 43,720 56,735 97,325 106,462
Income from operations 41,029 43,706 13,270 84,735 27,252
Interest and other income (expense):
Interest income 680 916 2,411 1,596 5,852
Interest expense (15,912 ) (13,451 ) (14,313 ) (29,363 ) (29,508 )
Net impairment loss - (2,687 ) - (2,687 ) -
Other income (expense) 2,610 (1,419 ) (918 ) 1,191 1,122
Total interest and other, net (12,622 ) (16,641 ) (12,820 ) (29,263 ) (22,534 )
Net income before income taxes 28,407 27,065 450 55,472 4,718
Income tax benefit (expense) (10,967 ) (11,608 ) 258 (22,575 ) (213 )
Net income $ 17,440 $ 15,457 $ 708 $ 32,897 $ 4,505
Net income per share:
Basic net income per share $ 0.46 $ 0.41 $ 0.02 $ 0.87 $ 0.12
Diluted net income per share $ 0.44 $ 0.40 $ 0.02 $ 0.84 $ 0.12
Shares used in computing basic net income per share 38,152 37,861 36,964 38,007 36,827
Shares used in computing diluted net income per share 39,318 38,739 37,968 39,008 37,718
</font>
<font> EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP
PRESENTATION
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
As Adjusted As Adjusted
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
Recurring revenues $ 205,313 $ 191,287 $ 163,395 $ 396,600 $ 313,754
Non-recurring revenues 7,855 7,944 8,649 15,799 16,508
Revenues (1) 213,168 199,231 172,044 412,399 330,262
Cash cost of revenues (2) 75,177 71,939 66,088 147,116 127,849
Cash gross profit (3) 137,991 127,292 105,956 265,283 202,413
Cash operating expenses (4):
Cash sales and marketing expenses (5) 12,204 10,980 10,911 23,184 22,388
Cash general and administrative expenses (6) 26,253 24,934 25,911 51,187 48,622
Total cash operating expenses (7) 38,457 35,914 36,822 74,371 71,010
Adjusted EBITDA (8) $ 99,534 $ 91,378 $ 69,134 $ 190,912 $ 131,403
Cash gross margins (9) 65 % 64 % 62 % 64 % 61 %
Adjusted EBITDA margins (10) 47 % 46 % 40 % 46 % 40 %
Adjusted EBITDA flow-through rate (11) 59 % 85 % 50 % 79 % 50 %
(1) The geographic split of our revenues on a services basis is
presented below:
United States Revenues:
Colocation $ 104,337 $ 99,004 $ 83,053 $ 203,341 $ 158,350
Interconnection 21,956 21,516 20,106 43,472 39,125
Managed infrastructure 522 569 503 1,091 1,057
Rental 118 161 117 279 365
Recurring revenues 126,933 121,250 103,779 248,183 198,897
Non-recurring revenues 2,813 3,644 3,468 6,457 7,546
Revenues 129,746 124,894 107,247 254,640 206,443
Asia-Pacific Revenues:
Colocation 20,847 19,218 13,485 40,065 25,296
Interconnection 2,516 2,296 1,648 4,812 3,183
Managed infrastructure 3,590 3,535 3,525 7,125 7,187
Rental - - - - -
Recurring revenues 26,953 25,049 18,658 52,002 35,666
Non-recurring revenues 1,413 1,488 1,946 2,901 3,111
Revenues 28,366 26,537 20,604 54,903 38,777
Europe Revenues:
Colocation 46,625 40,227 36,436 86,852 70,677
Interconnection 1,425 1,385 1,062 2,810 2,055
Managed infrastructure 3,256 3,273 3,381 6,529 6,266
Rental 121 103 79 224 193
Recurring revenues 51,427 44,988 40,958 96,415 79,191
Non-recurring revenues 3,629 2,812 3,235 6,441 5,851
Revenues 55,056 47,800 44,193 102,856 85,042
Worldwide Revenues:
Colocation 171,809 158,449 132,974 330,258 254,323
Interconnection 25,897 25,197 22,816 51,094 44,363
Managed infrastructure 7,368 7,377 7,409 14,745 14,510
Rental 239 264 196 503 558
Recurring revenues 205,313 191,287 163,395 396,600 313,754
Non-recurring revenues 7,855 7,944 8,649 15,799 16,508
Revenues $ 213,168 $ 199,231 $ 172,044 $ 412,399 $ 330,262
(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 $ 118,534 $ 111,805 $ 102,039 $ 230,339 $ 196,548
Depreciation, amortization and accretion expense (41,899 ) (38,772 ) (34,743 ) (80,671 ) (66,521 )
Stock-based compensation expense (1,458 ) (1,094 ) (1,208 ) (2,552 ) (2,178 )
Cash cost of revenues $ 75,177 $ 71,939 $ 66,088 $ 147,116 $ 127,849
The geographic split of our cash cost of revenues is presented below:
U.S. cash cost of revenues $ 40,054 $ 38,601 $ 33,587 $ 78,655 $ 66,593
Asia-Pacific cash cost of revenues 10,451 9,811 8,872 20,262 16,641
Europe cash cost of revenues 24,672 23,527 23,629 48,199 44,615
Cash cost of revenues $ 75,177 $ 71,939 $ 66,088 $ 147,116 $ 127,849
(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 gains on asset sales. 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 $ 16,369 $ 14,403 $ 15,290 $ 30,772 $ 30,641
Depreciation and amortization expense (1,327 ) (1,243 ) (1,626 ) (2,570 ) (3,199 )
Stock-based compensation expense (2,838 ) (2,180 ) (2,753 ) (5,018 ) (5,054 )
Cash sales and marketing expenses $ 12,204 $ 10,980 $ 10,911 $ 23,184 $ 22,388
(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 $ 37,456 $ 35,150 $ 41,445 $ 72,606 $ 75,821
Depreciation and amortization expense (2,040 ) (1,952 ) (2,447 ) (3,992 ) (5,042 )
Stock-based compensation expense (9,163 ) (8,264 ) (13,087 ) (17,427 ) (22,157 )
Cash general and administrative expenses $ 26,253 $ 24,934 $ 25,911 $ 51,187 $ 48,622
(7) Our cash operating expenses, or cash SG&A, as defined above, is
presented below:
Cash sales and marketing expenses $ 12,204 $ 10,980 $ 10,911 $ 23,184 $ 22,388
Cash general and administrative expenses 26,253 24,934 25,911 51,187 48,622
Cash SG&A $ 38,457 $ 35,914 $ 36,822 $ 74,371 $ 71,010
The geographic split of our cash operating expenses, or cash SG&A,
is presented below:
U.S. cash SG&A $ 23,678 $ 23,330 $ 22,846 $ 47,008 $ 42,900
Asia-Pacific cash SG&A 4,996 4,690 4,686 9,686 9,720
Europe cash SG&A 9,783 7,894 9,290 17,677 18,390
Cash SG&A $ 38,457 $ 35,914 $ 36,822 $ 74,371 $ 71,010
(8) We define adjusted EBITDA as income from operations plus
depreciation, amortization, accretion, stock-based compensation
expense and restructuring charges as presented below:
Income from operations $ 41,029 $ 43,706 $ 13,270 $ 84,735 $ 27,252
Depreciation, amortization and accretion expense 45,266 41,967 38,816 87,233 74,762
Stock-based compensation expense 13,459 11,538 17,048 24,997 29,389
Restructuring charges (220 ) (5,833 ) - (6,053 ) -
Adjusted EBITDA $ 99,534 $ 91,378 $ 69,134 $ 190,912 $ 131,403
The geographic split of our adjusted EBITDA is presented below:
U.S. income from operations $ 28,748 $ 33,941 $ 15,279 $ 62,689 $ 28,534
U.S. depreciation, amortization and accretion expense 27,274 26,039 24,646 53,313 47,889
U.S. stock-based compensation expense 10,212 8,816 10,889 19,028 20,527
U.S. restructuring charges (220 ) (5,833 ) - (6,053 ) -
U.S. adjusted EBITDA 66,014 62,963 50,814 128,977 96,950
Asia-Pacific income from operations 4,394 4,339 1,138 8,733 1,813
Asia-Pacific depreciation, amortization and accretion expense 6,758 6,327 4,449 13,085 8,073
Asia-Pacific stock-based compensation expense 1,767 1,370 1,459 3,137 2,530
Asia-Pacific adjusted EBITDA 12,919 12,036 7,046 24,955 12,416
Europe income (loss) from operations 7,887 5,426 (3,147 ) 13,313 (3,095 )
Europe depreciation, amortization and accretion expense 11,234 9,601 9,721 20,835 18,800
Europe stock-based compensation expense 1,480 1,352 4,700 2,832 6,332
Europe adjusted EBITDA 20,601 16,379 11,274 36,980 22,037
Adjusted EBITDA $ 99,534 $ 91,378 $ 69,134 $ 190,912 $ 131,403
(9) We define cash gross margins as cash gross profit divided by
revenues.
Our cash gross margins by geographic region is presented below:
U.S. cash gross margins 69 % 69 % 69 % 69 % 68 %
Asia-Pacific cash gross margins 63 % 63 % 57 % 63 % 57 %
Europe cash gross margins 55 % 51 % 47 % 53 % 48 %
(10) We define adjusted EBITDA margins as adjusted EBITDA divided by
revenues.
U.S. adjusted EBITDA margins 51 % 50 % 47 % 51 % 47 %
Asia-Pacific adjusted EBITDA margins 46 % 45 % 34 % 45 % 32 %
Europe adjusted EBITDA margins 37 % 34 % 26 % 36 % 26 %
(11) We define adjusted EBITDA flow-through rate as incremental
adjusted EBITDA growth divided by incremental revenue growth as
follows:
Adjusted EBITDA - current period $ 99,534 $ 91,378 $ 69,134 $ 190,912 $ 131,403
Less adjusted EBITDA - prior period (91,378 ) (84,100 ) (62,269 ) (161,073 ) (87,701 )
Adjusted EBITDA growth $ 8,156 $ 7,278 $ 6,865 $ 29,839 $ 43,702
Revenues - current period $ 213,168 $ 199,231 $ 172,044 $ 412,399 $ 330,262
Less revenues - prior period (199,231 ) (190,683 ) (158,218 ) (374,418 ) (242,496 )
Revenue growth $ 13,937 $ 8,548 $ 13,826 $ 37,981 $ 87,766
Adjusted EBITDA flow-through rate 59 % 85 % 50 % 79 % 50 %
</font>
<font> EQUINIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
As Adjusted
Assets June 30, December 31,
2009 2008
Cash and cash equivalents $ 405,217 $ 220,207
Short-term investments 175,854 42,112
Accounts receivable, net 67,312 66,029
Deferred tax assets 18,996 35,936
Other current assets 22,081 15,227
Total current assets 689,460 379,511
Long-term investments 22,299 45,626
Property, plant and equipment, net 1,590,756 1,492,830
Goodwill 382,112 342,829
Intangible assets, net 54,619 50,918
Deferred tax assets 43,332 65,228
Other assets 60,787 57,794
Total assets $ 2,843,365 $ 2,434,736
Liabilities and Stockholders’ Equity
Accounts payable and accrued expenses $ 88,454 $ 74,317
Accrued property and equipment 59,773 89,518
Current portion of capital lease and other financing obligations 6,036 4,499
Current portion of mortgage and loans payable 52,113 52,054
Current portion of convertible debt - 19,150
Other current liabilities 46,259 50,455
Total current liabilities 252,635 289,993
Capital lease and other financing obligations, less current portion 138,532 133,031
Mortgage and loans payable, less current portion 372,491 386,446
Convertible debt, less current portion 883,131 608,510
Other liabilities 103,954 100,095
Total liabilities 1,750,743 1,518,075
Common stock 39 38
Additional paid-in capital 1,608,618 1,524,834
Accumulated other comprehensive income (loss) (93,521 ) (152,800 )
Accumulated deficit (422,514 ) (455,411 )
Total stockholders’ equity 1,092,622 916,661
Total liabilities and stockholders’ equity $ 2,843,365 $ 2,434,736
Ending headcount by geographic region is as follows:
U.S. headcount 680 646
Asia-pacific headcount 210 190
Europe headcount 314 279
Total headcount 1,204 1,115
</font>
<font> EQUINIX, INC.
SUMMARY OF DEBT OUTSTANDING
(in thousands)
(unaudited)
As Adjusted
June 30, December 31,
2009 2008
Capital lease and other financing obligations $ 144,568 $ 137,530
European financing 133,986 130,981
Chicago IBX financing 109,991 109,991
Mortgage payable 93,075 94,362
Asia-Pacific financing 76,848 87,009
Netherlands financing 5,779 6,485
Other note payable 4,925 9,672
Total mortgage and loans payable 424,604 438,500
Convertible debt, net of debt discount 883,131 627,660
Plus debt discount 136,605 37,476
Total convertible debt principal 1,019,736 665,136
Total debt outstanding $ 1,588,908 $ 1,241,166
</font>
<font> EQUINIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
As Adjusted As Adjusted
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
Cash flows from operating activities:
Net income $ 17,440 $ 15,457 $ 708 $ 32,897 $ 4,505
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization and accretion 45,266 41,967 38,816 87,233 74,762
Stock-based compensation 13,459 11,538 17,048 24,997 29,389
Debt issuance costs and debt discount 3,277 2,437 2,668 5,714 5,672
Restructuring charges (220 ) (5,833 ) - (6,053 ) -
Other reconciling items 921 2,774 (1,255 ) 3,695 (870 )
Changes in operating assets and liabilities:
Accounts receivable (5,838 ) 4,812 (4,037 ) (1,026 ) (1,531 )
Deferred tax assets, net 8,068 8,871 - 16,939 -
Accounts payable and accrued expenses 6,683 6,282 4,430 12,965 5,537
Other assets and liabilities (10,317 ) (1,601 ) 6,580 (11,918 ) 10,478
Net cash provided by operating activities 78,739 86,704 64,958 165,443 127,942
Cash flows from investing activities:
Purchases, sales and maturities of investments, net (136,157 ) 23,620 (107,849 ) (112,537 ) (78,931 )
Purchase of Virtu, less cash acquired - - - - (23,241 )
Purchases of other property and equipment (76,816 ) (74,969 ) (84,458 ) (151,785 ) (210,101 )
Accrued property and equipment 6,050 (33,872 ) (23,176 ) (27,822 ) (26,241 )
Other investing activities 2,863 7,336 (732 ) 10,199 (13,901 )
Net cash used in investing activities (204,060 ) (77,885 ) (216,215 ) (281,945 ) (352,415 )
Cash flows from financing activities:
Proceeds from employee equity awards 4,892 4,062 12,000 8,954 19,238
Proceeds from convertible debt 373,750 - - 373,750 -
Proceeds from mortgage and loans payable - 744 35,643 744 77,525
Repayment of capital lease and other financing obligations (1,369 ) (969 ) (952 ) (2,338 ) (1,918 )
Repayment of mortgage and loans payable (16,312 ) (7,210 ) (4,330 ) (23,522 ) (7,422 )
Capped call costs (49,664 ) - - (49,664 ) -
Convertible debt issuance costs (9,956 ) - - (9,956 ) -
Other financing activities - (252 ) (437 ) (252 ) (901 )
Net cash provided by (used in) financing activities 301,341 (3,625 ) 41,924 297,716 86,522
Effect of foreign currency exchange rates on cash and cash 7,148 (3,352 ) (374 ) 3,796 (1,555 )
equivalents
Net increase (decrease) in cash and cash equivalents 183,168 1,842 (109,707 ) 185,010 (139,506 )
Cash and cash equivalents at beginning of period 222,049 220,207 260,834 220,207 290,633
Cash and cash equivalents at end of period $ 405,217 $ 222,049 $ 151,127 $ 405,217 $ 151,127
Free cash flow (1) $ 10,836 $ (14,801 ) $ (43,408 ) $ (3,965 ) $ (224,473 )
Adjusted free cash flow (2) $ 10,836 $ (14,801 ) $ (43,408 ) $ (3,965 ) $ (201,232 )
(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 $ 78,739 $ 86,704 $ 64,958 $ 165,443 $ 127,942
Net cash used in investing activities as presented above (204,060 ) (77,885 ) (216,215 ) (281,945 ) (352,415 )
Purchases, sales and maturities of investments, net 136,157 (23,620 ) 107,849 112,537 78,931
Free cash flow (negative free cash flow) $ 10,836 $ (14,801 ) $ (43,408 ) $ (3,965 ) $ (224,473 )
(2) We define adjusted free cash flow as free cash flow (as defined
above) excluding any purchases or sales of real estate and
acquisitions and proceeds from asset sales as presented below:
Free cash flow (as defined above) $ 10,836 $ (14,801 ) $ (43,408 ) $ (3,965 ) $ (224,473 )
Less purchase of Virtu, less cash acquired - - - - 23,241
Adjusted free cash flow (negative adjusted free cash flow) $ 10,836 $ (14,801 ) $ (43,408 ) $ (3,965 ) $ (201,232 )
</font>
<font> SOURCE: Equinix, Inc. </font>
<font> K/F Communications, Inc.
David Fonkalsrud, 415-255-6506 (Media)
dave@kfcomm.com
or
Equinix, Inc.
Jason Starr, 650-513-7402 (Investor Relations)
jstarr@equinix.com
</font>
$77.59 (07/23/09)