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Press release from Business Wire

Equinix Reports Third Quarter 2011 Results

<ul> <li class='bwlistitemmargb'> <b>Reported revenues of $417.6 million, a 6% increase over the previous quarter and a 26% increase over the same quarter last year</b> </li> <li class='bwlistitemmargb'> <b>Reported adjusted EBITDA of $191.6 million, a 6% increase over the previous quarter and a 31% increase over the same quarter last year</b> </li> <li class='bwlistitemmargb'> <b>Increased 2011 annual revenue guidance to greater than $1,600.0 million and increased 2011 adjusted EBITDA guidance to greater than $730.0 million</b> </li> <li class='bwlistitemmargb'> <b>Announced initial guidance for 2012 including annual revenues to be greater than $1,870.0 million, adjusted EBITDA to be greater than $850.0 million and total capital expenditures to be in the range of $700.0 to 800.0 million</b> </li> </ul>

Wednesday, October 26, 2011

Equinix Reports Third Quarter 2011 Results16:01 EDT Wednesday, October 26, 2011 REDWOOD CITY, Calif. (Business Wire) -- Equinix, Inc. (Nasdaq:EQIX), a provider of global data center services, today reported quarterly results for the quarter ended September 30, 2011. This quarter included the first full quarterly results from the acquisition of an indirect, controlling equity interest in ALOG Data Centers do Brasil S.A. from April 25, 2011, which is referred to as the ALOG acquisition. Revenues were $417.6 million for the third quarter, a 6% increase over the previous quarter and a 26% increase over the same quarter last year. This result included $17.9 million in revenues from ALOG for the quarter. Recurring revenues, consisting primarily of colocation, interconnection and managed services were $397.4 million for the third quarter, a 6% increase over the previous quarter and a 26% increase over the same quarter last year. Non-recurring revenues were $20.2 million in the quarter. “Equinix achieved strong results in all three regions and we are on target to surpass our 2011 financial objectives,” said Steve Smith, president and CEO of Equinix. “We plan to make additional investments in Platform Equinix so that we may continue to deliver value to our customers around the globe. Our goal is to generate over $3 billion in annual revenues in 2015, while creating significant returns for our shareholders from these investments.” Cost of revenues were $228.2 million for the third quarter, a 6% increase over the previous quarter and a 23% increase over the same quarter last year. Cost of revenues, excluding depreciation, amortization, accretion and stock-based compensation of $83.6 million, were $144.6 million for the third quarter, a 5% increase from the previous quarter and a 24% 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 the same quarter last year. Selling, general and administrative expenses were $109.0 million for the third quarter, a 6% increase over the previous quarter and a 21% increase over the same quarter last year. Selling, general and administrative expenses, excluding depreciation, amortization and stock-based compensation of $27.6 million, were $81.4 million for the third quarter, a 7% increase over the previous quarter and a 21% increase over the same quarter last year. Interest expense was $51.1 million for the third quarter, a 36% increase from the previous quarter and a 33% increase over the same quarter last year, primarily attributed to the $750.0 million 7.00% senior notes offering in July 2011. The Company recorded income tax expense of $5.3 million for the third quarter as compared to income tax expense of $8.1 million in the prior quarter and income tax expense of $4.6 million in the same quarter last year. Net income attributable to Equinix for the third quarter was $20.3 million. This represents a basic net income per share attributable to Equinix of $0.21 and a diluted net income per share attributable to Equinix of $0.20 based on a weighted average share count of 47.2 million and 47.9 million, respectively, for the third quarter of 2011. Adjusted EBITDA, defined as income or loss from operations before depreciation, amortization, accretion, stock-based compensation, restructuring charges and acquisition costs for the third quarter, was $191.6 million, an increase of 6% over the previous quarter and a 31% 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 $131.5 million, of which $104.9 million was attributed to expansion capital expenditures and $26.6 million was attributed to ongoing capital expenditures. The Company generated cash from operating activities of $141.9 million for the third quarter as compared to $140.3 million in the previous quarter and $113.3 million for the same quarter last year. Cash used in investing activities was $808.7 million in the third quarter as compared to cash used in investing activities of $209.7 million in the previous quarter and cash used in investing activities of $259.5 million for the same quarter last year. Cash provided by financing activities was $744.1 million for the third quarter, which was primarily related to the net proceeds from the $750.0 million 7.00% senior notes offering, the proceeds from employee equity awards and draw downs of certain loans payable. As of September 30, 2011, the Company's cash, cash equivalents and investments were $1.2 billion, as compared to $423.1 million as of June 30, 2011. Company Metricsand 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 web site at www.equinix.com/investors Business Outlook For the full year of 2011, total revenues are expected to be greater than $1,600.0 million. Total year cash gross margins are expected to range between 65% and 66%. Cash selling, general and administrative expenses are expected to approximate $320.0 million. Adjusted EBITDA for the year is expected to be greater than $730.0 million. Capital expenditures for 2011 are expected to be in the range of $645.0 to $665.0 million, comprised of approximately $115.0 million of ongoing capital expenditures and $530.0 to $550.0 million for expansion capital expenditures. For the full year of 2012, total revenues are expected to be greater than $1,870.0 million. Adjusted EBITDA for the year is expected to be greater than $850.0 million. Capital expenditures for 2012 are expected to be in the range of $700.0 to $800.0 million, comprised of approximately $120.0 million of ongoing capital expenditures and $580.0 to $680.0 million for expansion capital expenditures. The Company will discuss its results and guidance on its quarterly conference call on Wednesday, October 26, 2011, at 5:30 p.m. ET (2:30 p.m. PT). A presentation to accompany the call will be available on the Company's website at www.equinix.com/investors. To hear the conference call live, please dial 210-234-8004 (domestic and international) and reference the passcode (EQIX). A simultaneous live Webcast of the call will also be available at www.equinix.com/investors. A replay of the call will be available beginning on Wednesday, October 26, 2011, at 7:30 p.m. (ET) through November 26, 2011, by dialing 203-369-1814 (domestic and international) and reference the passcode (2011). In addition, the webcast will be available on the company's web site at www.equinix.com/investors over the same time period. No password is required for the replay or the webcast. About Equinix Equinix, Inc. (Nasdaq:EQIX) connects businesses with partners and customers around the world through a global platform of high performance data centers, containing dynamic ecosystems and the broadest choice of networks. Platform Equinix connects more than 4,000 enterprises, cloud, digital content and financial companies including more than 680 network service providers to help them grow their businesses, improve application performance and protect their vital digital assets. Equinix operates in 38 strategic markets across the Americas, EMEA and Asia-Pacific and continually invests in expanding its platform to power customer growth. http://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 stock-based compensation expense as it primarily 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 they were calculated for the periods presented within this press release. Forward Looking StatementsThis 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 EndedSeptember 30,2011   June 30,2011   September 30,2010September 30,2011   September 30,2010   Recurring revenues $ 397,351 $ 376,528 $ 314,727 $ 1,117,788 $ 834,080 Non-recurring revenues   20,250     18,372     15,620     57,742     41,010         Revenues417,601394,900330,3471,175,530875,090   Cost of revenues   228,153     215,572     185,476     638,301     481,108   Gross profit   189,448     179,328     144,871     537,229     393,982     Operating expenses: Sales and marketing 43,070 37,063 31,205 113,769 79,586 General and administrative 65,976 65,681 58,640 194,258 155,961 Restructuring charges 1,587 103 1,886 2,186 6,243 Acquisition costs   699     1,615     1,114     2,729     11,957   Total operating expenses   111,332     104,462     92,845     312,942     253,747     Income from operations   78,116     74,866     52,026     224,287     140,235     Interest and other income (expense): Interest income 679 632 310 1,526 1,307 Interest expense (51,114 ) (37,677 ) (38,363 ) (126,152 ) (101,653 ) Other-than-temporary impairment recovery on investments - - 206 - 3,626 Loss on debt extinguishment and interest rate swaps, net - - - - (4,831 ) Other income (expense)   (1,694 )   1,021     1,654     1,438     193   Total interest and other, net   (52,129)   (36,024)   (36,193)   (123,188)   (101,358)   Income before income taxes25,98738,84215,833101,09938,877   Income tax expense   (5,348 )   (8,109 )   (4,637 )   (24,582 )   (15,756 )   Net income20,63930,73311,19676,51723,121   Net income attributable to redeemable non-controlling interests (320 ) (3 ) - (323 ) -           Net income attributable to Equinix$20,319   $30,730   $11,196   $76,194   $23,121     Net income per share attributable to Equinix:   Basic net income per share (1) $ 0.21   $ 0.65   $ 0.24   $ 1.40   $ 0.54     Diluted net income per share (1) $ 0.20   $ 0.64   $ 0.24   $ 1.37   $ 0.53     Shares used in computing basic net income per share   47,202     46,924     45,745     46,861     42,961     Shares used in computing diluted net income per share   47,943     50,664     46,676     47,694     44,040                   (1)   The net income attributable to Equinix used in the computation of basic and diluted net income per share attributable to Equinix is presented below:   Net income $ 20,639 $ 30,733 $ 11,196 $ 76,517 $ 23,121 Adjustments attributable to redeemable non-controlling interests:   (10,959 )   -     -     (10,962 )   -   Net income attributable to Equinix, basic 9,680 30,733 11,196 65,555 23,121 Interest on convertible debt   -     1,746     -     -     -   Net income attributable to Equinix, diluted $ 9,680   $ 32,479   $ 11,196   $ 65,555   $ 23,121       EQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION(in thousands)(unaudited)       Three Months Ended   Nine Months Ended   September 30,2011   June 30,2011   September 30,2010September 30,2011   September 30,2010         Recurring revenues $ 397,351 $ 376,528 $ 314,727 $ 1,117,788 $ 834,080 Non-recurring revenues   20,250     18,372     15,620     57,742     41,010   Revenues (1)   417,601     394,900     330,347     1,175,530     875,090     Cash cost of revenues (2)   144,560     137,558     116,602     404,749     305,578   Cash gross profit (3)   273,041     257,342     213,745     770,781     569,512     Cash operating expenses (4): Cash sales and marketing expenses (5) 34,504 29,261 24,171 90,869 61,514 Cash general and administrative expenses (6)   46,909     46,753     43,113     139,680     112,110   Total cash operating expenses (7)   81,413     76,014     67,284     230,549     173,624     Adjusted EBITDA (8)$191,628   $181,328   $146,461   $540,232   $395,888     Cash gross margins (9)   65%   65%   65%   66%   65%   Adjusted EBITDA margins (10)   46%   46%   44%   46%   45%   Adjusted EBITDA flow-through rate (11)   45%   44%   42%   55%   41%                 (1) The geographic split of our revenues on a services basis is presented below:   Americas Revenues:   Colocation $ 193,317 $ 187,840 $ 164,653 $ 557,353 432,154 Interconnection 49,432 48,164 42,102 143,518 100,938 Managed infrastructure 15,966 8,706 821 25,439 2,106 Rental   550     489     520     1,543     1,109   Recurring revenues 259,265 245,199 208,096 727,853 536,307 Non-recurring revenues   9,589     8,690     7,229     27,417     19,220   Revenues   268,854     253,889     215,325     755,270     555,527     EMEA Revenues:   Colocation 77,709 74,645 60,970 220,554 171,310 Interconnection 3,446 3,203 2,305 9,461 6,254 Managed infrastructure 3,691 3,481 2,734 10,370 8,238 Rental   262     177     270     557     586   Recurring revenues 85,108 81,506 66,279 240,942 186,388 Non-recurring revenues   7,216     7,105     6,515     22,032     16,654   Revenues   92,324     88,611     72,794     262,974     203,042     Asia-Pacific Revenues:   Colocation 41,874 39,101 31,672 117,314 87,510 Interconnection 6,378 5,818 4,430 17,537 11,819 Managed infrastructure   4,726     4,904     4,250     14,142     12,056   Recurring revenues 52,978 49,823 40,352 148,993 111,385 Non-recurring revenues   3,445     2,577     1,876     8,293     5,136   Revenues   56,423     52,400     42,228     157,286     116,521     Worldwide Revenues:   Colocation 312,900 301,586 257,295 895,221 690,974 Interconnection 59,256 57,185 48,837 170,516 119,011 Managed infrastructure 24,383 17,091 7,805 49,951 22,400 Rental   812     666     790     2,100     1,695   Recurring revenues 397,351 376,528 314,727 1,117,788 834,080 Non-recurring revenues   20,250     18,372     15,620     57,742     41,010   Revenues $ 417,601   $ 394,900   $ 330,347   $ 1,175,530   $ 875,090     (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 $ 228,153 $ 215,572 $ 185,476 $ 638,301 $ 481,108 Depreciation, amortization and accretion expense (82,020 ) (76,515 ) (67,255 ) (229,135 ) (170,573 ) Stock-based compensation expense   (1,573 )   (1,499 )   (1,619 )   (4,417 )   (4,957 ) Cash cost of revenues $ 144,560   $ 137,558   $ 116,602   $ 404,749   $ 305,578     The geographic split of our cash cost of revenues is presented below:   Americas cash cost of revenues $ 86,503 $ 81,886 $ 71,879 $ 238,599 $ 177,247 EMEA cash cost of revenues 36,930 36,217 29,373 107,638 86,969 Asia-Pacific cash cost of revenues   21,127     19,455     15,350     58,512     41,362   Cash cost of revenues $ 144,560   $ 137,558   $ 116,602   $ 404,749   $ 305,578     (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 $ 43,070 $ 37,063 $ 31,205 $ 113,769 $ 79,586 Depreciation and amortization expense (4,413 ) (4,192 ) (3,407 ) (12,271 ) (7,756 ) Stock-based compensation expense   (4,153 )   (3,610 )   (3,627 )   (10,629 )   (10,316 ) Cash sales and marketing expenses $ 34,504   $ 29,261   $ 24,171   $ 90,869   $ 61,514     (6) We define cash general and administrative expenses as general and administrative expenses less depreciation, amortization and stock-based compensation as presented below:   General and administrative expenses $ 65,976 $ 65,681 $ 58,640 $ 194,258 $ 155,961 Depreciation and amortization expense (5,586 ) (5,719 ) (3,823 ) (16,564 ) (9,104 ) Stock-based compensation expense   (13,481 )   (13,209 )   (11,704 )   (38,014 )   (34,747 ) Cash general and administrative expenses $ 46,909   $ 46,753   $ 43,113   $ 139,680   $ 112,110     (7) Our cash operating expenses, or cash SG&A, as defined above, is presented below:   Cash sales and marketing expenses $ 34,504 $ 29,261 $ 24,171 $ 90,869 $ 61,514 Cash general and administrative expenses   46,909     46,753     43,113     139,680     112,110   Cash SG&A $ 81,413   $ 76,014   $ 67,284   $ 230,549   $ 173,624     The geographic split of our cash operating expenses, or cash SG&A, is presented below:   Americas cash SG&A $ 54,838 $ 49,499 $ 45,499 $ 153,149 $ 117,085 EMEA cash SG&A 17,427 17,545 14,365 51,908 38,122 Asia-Pacific cash SG&A   9,148     8,970     7,420     25,492     18,417   Cash SG&A $ 81,413   $ 76,014   $ 67,284   $ 230,549   $ 173,624     (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 $ 78,116 $ 74,866 $ 52,026 $ 224,287 $ 140,235 Depreciation, amortization and accretion expense 92,019 86,426 74,485 257,970 187,433 Stock-based compensation expense 19,207 18,318 16,950 53,060 50,020 Restructuring charges 1,587 103 1,886 2,186 6,243 Acquisition costs   699     1,615     1,114     2,729     11,957   Adjusted EBITDA $ 191,628   $ 181,328   $ 146,461   $ 540,232   $ 395,888     The geographic split of our adjusted EBITDA is presented below:   Americas income from operations $ 51,659 $ 49,072 $ 31,921 $ 148,050 $ 84,051 Americas depreciation, amortization and accretion expense 58,414 57,246 51,108 169,142 122,363 Americas stock-based compensation expense 15,176 14,527 12,683 41,545 37,346 Americas restructuring charges 1,587 103 1,886 2,186 6,243 Americas acquisition costs   677     1,556     349     2,599     11,192   Americas adjusted EBITDA   127,513     122,504     97,947     363,522     261,195     EMEA income from operations 16,305 14,178 10,258 41,954 26,251 EMEA depreciation, amortization and accretion expense 19,354 18,512 15,531 54,710 43,752 EMEA stock-based compensation expense 2,308 2,147 2,502 6,750 7,183 EMEA acquisition costs   -     12     765     14     765   EMEA adjusted EBITDA   37,967     34,849     29,056     103,428     77,951     Asia-Pacific income from operations 10,152 11,616 9,847 34,283 29,933 Asia-Pacific depreciation, amortization and accretion expense 14,251 10,668 7,846 34,118 21,318 Asia-Pacific stock-based compensation expense 1,723 1,644 1,765 4,765 5,491 Asia-Pacific acquisition costs   22     47     -     116     -   Asia-Pacific adjusted EBITDA   26,148     23,975     19,458     73,282     56,742     Adjusted EBITDA $ 191,628   $ 181,328   $ 146,461   $ 540,232   $ 395,888     (9) We define cash gross margins as cash gross profit divided by revenues.   Our cash gross margins by geographic region is presented below:   Americas cash gross margins   68 %   68 %   67 %   68 %   68 %   EMEA cash gross margins   60 %   59 %   60 %   59 %   57 %   Asia-Pacific cash gross margins   63 %   63 %   64 %   63 %   65 %   (10) We define adjusted EBITDA margins as adjusted EBITDA divided by revenues.   Americas adjusted EBITDA margins   47 %   48 %   45 %   48 %   47 %   EMEA adjusted EBITDA margins   41 %   39 %   40 %   39 %   38 %   Asia-Pacific adjusted EBITDA margins   46 %   46 %   46 %   47 %   49 %   (11) We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follows:     Adjusted EBITDA - current period $ 191,628 $ 181,328 $ 146,461 $ 540,232 $ 395,888 Less adjusted EBITDA - prior period   (181,328 )   (167,276 )   (132,155 )   (427,563 )   (317,230 ) Adjusted EBITDA growth $ 10,300   $ 14,052   $ 14,306   $ 112,669   $ 78,658     Revenues - current period $ 417,601 $ 394,900 $ 330,347 $ 1,175,530 $ 875,090 Less revenues - prior period   (394,900 )   (363,029 )   (296,094 )   (971,685 )   (683,278 ) Revenue growth $ 22,701   $ 31,871   $ 34,253   $ 203,845   $ 191,812     Adjusted EBITDA flow-through rate   45 %   44 %   42 %   55 %   41 %     EQUINIX, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)(unaudited)     AssetsSeptember 30,2011December 31,2010   Cash and cash equivalents $ 370,523 $ 442,841 Short-term investments 700,246 147,192 Accounts receivable, net 144,185 116,358 Other current assets   115,344     71,657     Total current assets1,330,298778,048 Long-term investments 99,419 2,806 Property, plant and equipment, net 3,122,094 2,650,953 Goodwill 867,280 774,365 Intangible assets, net 153,505 150,945 Other assets   158,091     90,892   Total assets$5,730,687   $4,448,009     Liabilities and Stockholders' Equity   Accounts payable and accrued expenses $ 181,093 $ 145,854 Accrued property and equipment 90,181 91,667 Current portion of capital lease and other financing obligations 11,367 7,988 Current portion of loans payable 74,652 19,978 Current portion of convertible debt 243,176 - Other current liabilities   55,687     52,628   Total current liabilities656,156318,115 Capital lease and other financing obligations, less current portion 376,848 253,945 Loans payable, less current portion 161,984 100,337 Senior notes 1,500,000 750,000 Convertible debt 691,520 916,337 Other liabilities   253,300     228,760   Total liabilities   3,639,808     2,567,494     Redeemable non-controlling interests   66,372     -     Common stock 47 46 Additional paid-in capital 2,417,781 2,341,586 Accumulated other comprehensive loss (120,416 ) (112,018 ) Accumulated deficit   (272,905 )   (349,099 ) Total stockholders' equity   2,024,507     1,880,515     Total liabilities, redeemable non-controlling interestsand stockholders' equity$5,730,687   $4,448,009                     Ending headcount by geographic region is as follows:   Americas headcount 1,750 1,156 EMEA headcount 552 482 Asia-Pacific headcount   371     283   Total headcount   2,673     1,921       EQUINIX, INC.SUMMARY OF DEBT OUTSTANDING(in thousands)(unaudited)     September 30,2011   December 31,2010     Capital lease and other financing obligations $ 388,215 $ 261,933   Paris IBX financing 40,054 - ALOG financing 11,738 - New Asia-Pacific financing 184,844 120,315 Total loans payable 236,636 120,315   Senior notes 1,500,000 750,000   Convertible debt, net of debt discount 934,696 916,337 Plus debt discount 85,040 103,399 Total convertible debt principal 1,019,736 1,019,736   Total debt outstanding $ 3,144,587 $ 2,151,984     EQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)       Three Months Ended   Nine Months EndedSeptember 30,2011   June 30,2011   September 30,2010September 30,2011   September 30,2010   Cash flows from operating activities:   Net income $ 20,639 $ 30,733 $ 11,196 $ 76,517 $ 23,121 Adjustments to reconcile net income to net cash provided by operating activities:   Depreciation, amortization and accretion 92,019 86,426 74,485 257,970 187,433 Stock-based compensation 19,207 18,318 16,950 53,060 50,020 Debt issuance costs and debt discount 8,207 8,325 7,160 23,816 19,403 Loss on debt extinguishment and interest rate swaps - - - - 4,831 Restructuring charges 1,587 103 1,886 2,186 6,243 Other reconciling items 711 3,074 894 5,348 2,162 Changes in operating assets and liabilities:   Accounts receivable (9,989 ) (19,409 ) (6,729 ) (26,299 ) (38,486 ) Deferred tax assets, net 1,760 (2,507 ) 3,442 4,893 7,721 Accounts payable and accrued expenses 32 4,082 (3,013 ) (9,492 ) 16,047 Other assets and liabilities   7,697     11,203     6,992     11,989     (8,514 ) Net cash provided by operating activities   141,870     140,348     113,263     399,988     269,981   Cash flows from investing activities: Purchases, sales and maturities of investments, net (677,229 ) 30,979 (115,554 ) (648,435 ) (68,256 ) Purchase of ALOG, less cash acquired - (41,954 ) - (41,954 ) - Purchase of Switch and Data, less cash acquired - - - - (113,289 ) Purchase of Frankfurt IBX property - (9,042 ) - (9,042 ) - Purchase of Paris IBX property - - - (14,951 ) - Purchases of other property and equipment (131,525 ) (188,875 ) (143,941 ) (495,515 ) (436,046 ) Other investing activities   61     (845 )   -     (94,922 )   (916 ) Net cash used in investing activities   (808,693)   (209,737)   (259,495)   (1,304,819)   (618,507) Cash flows from financing activities: Proceeds from employee equity awards 11,107 8,929 14,026 35,704 36,179 Proceeds from loans payable 12,718 55,264 16,853 90,635 115,811 Proceeds from senior notes 750,000 - - 750,000 750,000 Repayment of capital lease and other financing obligations (3,081 ) (2,355 ) (1,713 ) (7,404 ) (14,114 ) Repayment of mortgage and loans payable (11,171 ) - (11,049 ) (21,273 ) (469,077 ) Debt issuance costs   (15,426 )   -     (5 )   (15,551 )   (23,124 ) Net cash provided by financing activities   744,147     61,838     18,112     832,111     395,675   Effect of foreign currency exchange rates on cash and cash equivalents   (4,673 )   957     5,927     402     (4,056 ) Net increase (decrease) in cash and cash equivalents 72,651 (6,594 ) (122,193 ) (72,318 ) 43,093 Cash and cash equivalents at beginning of period   297,872     304,466     511,342     442,841     346,056   Cash and cash equivalents at end of period$370,523   $297,872   $389,149   $370,523   $389,149       Free cash flow (1)$10,406   $(100,368)$(30,678)$(256,396)$(280,270)   Adjusted free cash flow (2)$10,406   $(49,372)$(30,678)$(190,449)$(166,981)                 (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 $ 141,870 $ 140,348 $ 113,263 $ 399,988 $ 269,981 Net cash used in investing activities as presented above (808,693 ) (209,737 ) (259,495 ) (1,304,819 ) (618,507 ) Purchases, sales and maturities of investments, net   677,229     (30,979 )   115,554     648,435     68,256   Free cash flow (negative free cash flow) $ 10,406   $ (100,368 ) $ (30,678 ) $ (256,396 ) $ (280,270 )   (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) $ 10,406 $ (100,368 ) $ (30,678 ) $ (256,396 ) $ (280,270 ) Less purchase of ALOG, less cash acquired - 41,954 - 41,954 - Less purchase of Switch and Data, less cash acquired - - - - 113,289 Less purchase of Frankfurt IBX property - 9,042 - 9,042 - Less purchase of Paris IBX property   -     -     -     14,951     -   Adjusted free cash flow (negative adjusted free cash flow) $ 10,406   $ (49,372 ) $ (30,678 ) $ (190,449 ) $ (166,981 )   Equinix Investor Relations Contacts:Equinix, Inc.Katrina Rymill, 650-598-6583krymill@equinix.comJason Starr, 650-598-6020jstarr@equinix.comorEquinix Media Contact:LEWIS PRScott Blevins, 415-992-4400equinixlewisus@lewispr.com