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18:14 Uhr
AKTIEN IM FOKUS 2: Defensive Werbekunden belasten Medienkonzerne und Ströer

Equinix Reports Fourth Quarter And Full Year 2016 Results

Mittwoch, 15.02.2017 22:10 von

PR Newswire

REDWOOD CITY, Calif., Feb. 15, 2017 /PRNewswire/ --

  • Record quarterly bookings with particular strength in the enterprise vertical
  • Added seven Fortune 500 customers and 11 Forbes Global 2000 customers
  • Customer deployments across multiple metros represent 82% of total recurring revenue, demonstrating the strength of Equinix's global platform
  • Company announces $175 million in new expansions in Amsterdam, Chicago, Dubai, Rio de Janeiro and Toronto

Equinix, Inc. (Nasdaq: EQIX), the global interconnection and data center company, today reported quarterly and annual results for the quarter and the year ended December 31, 2016. Equinix 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.

2016 Results Summary

  • Revenues from continuing operations
    • $3,612 million, a 33% increase over the previous year; an organic and constant currency growth rate of greater than 14%
    • Includes $400 million of revenues from Telecity
    • Includes $149 million of revenues from Bit-isle
  • Operating Income
    • $619 million, a 9% increase over the previous year
  • Adjusted EBITDA
    • $1,657 million, a 46% adjusted EBITDA margin
    • Includes $187 million of adjusted EBITDA from Telecity
    • Includes $50 million of adjusted EBITDA from Bit-isle
    • Includes $58 million of integration costs for acquisitions
  • Net Income from Continuing Operations
    • $114 million
  • AFFO
    • $1,078 million, a 30% increase from the previous year
    • Assumes $58 million of integration costs for acquisitions

2017 Annual Guidance Summary

  • Revenues from continuing operations
    • >$3,933 million, a 9% increase over the previous year; a normalized and constant currency growth rate of greater than 11%
  • Adjusted EBITDA
    • >$1,842 million or a 47% adjusted EBITDA margin
    • Assumes $30 million of integration costs for acquisitions
  • AFFO
    • >$1,249 million, a 16% increase over the previous year
    • Assumes $30 million of integration costs for acquisitions

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 without unreasonable effort. The impact of such adjustments could be significant.

Quote

Steve Smith, President and CEO, Equinix:

"2016 was a pivotal year for Equinix. We continued to capture the shift to the cloud, expand our global reach and scale, grow interconnection, and deliver record bookings and increasing shareholder returns. We are operating at the intersection of some of the greatest technology trends in our lifetime, and the digital transformation driven by cloud services is shifting compute, storage and networking to the edge, which plays into our dense ecosystems and global scale. We look forward to a busy 2017 as we integrate our acquisitions, grow our global platform, enhance our portfolio of services and increase our reach and relevance to the cloud-enabled enterprise."

Business Highlights

  • Equinix continues to invest and expand the reach of its global platform with $1.1 billion in capital expenditures in 2016 and 19 announced expansion projects currently underway. Today Equinix announced new expansions in Amsterdam, Chicago, Dubai, Rio de Janeiro and Toronto totaling more than $175 million of capital expenditures.  The global reach of Equinix continues to attract companies seeking to locate their infrastructure closer to the digital edge, and in Q4 2016, customer deployments across multiple regions of Platform Equinix (Americas, EMEA or Asia-Pacific) represented 70% of total recurring revenue.
  • Equinix achieved record bookings from enterprise customers in Q4 2016, as businesses re-architect their infrastructure to directly and securely interconnect their people, locations, clouds and data.
    • Wins/expansions included Philips, a global 400 manufacturer connecting to AWS, Microsoft Azure and IBM SoftLayer in multiple locations, and Walmart, which is further investing in e-commerce by optimizing its network topology connecting to Microsoft Azure via Equinix Cloud Exchange.
    • Equinix has now penetrated more than one-third of the Fortune 500, and a quarter of the Forbes Global 2000 companies.
  • Equinix continues to deliver growth in the cloud and IT services vertical led by the EMEA region. Major Infrastructure-as-a-Service players, such as AWS, Microsoft Azure, IBM SoftLayer, Google Cloud Platform and Oracle on average have a presence across 15 markets with Equinix, and they continue to grow.  Software-as-a-Service providers are joining the Equinix Cloud Exchange to provide the performance and security benefits of private interconnection to their customers, with Salesforce.com, SAP and ServiceNow deploying across multiple markets in 2017.
  • Interconnection revenue in Q4 2016 grew 21% year over year on an organic and constant currency basis, as companies continue to adopt an Interconnection Oriented Architecture (IOA) that leverages Equinix's global platform and ecosystems.  With the Telecity acquisition, Equinix now provides more than 230,000 cross-connects between the company's more than 8,500 customers.
  • Equinix further strengthened the reach of its global platform with the announcement of a $3.6 billion definitive agreement to purchase 29 data centers from Verizon across 15 metro areas in North and South America.  The deal, which includes the addition of strategic facilities and customers and is expected to close in mid-2017, will increase capacity in key markets; expand our presence to three new markets - Bogotá, Culpeper and Houston; enhance Equinix's interconnection density; and accelerate relationships in the government and energy sectors. Upon closing of this transaction, the global reach of Platform Equinix will span 179 data centers, 44 metros and 22 countries. With this acquisition, Equinix will have invested more than $17 billion in capital in building out the global footprint of Platform Equinix since the company was founded.

Business Outlook

For the first quarter of 2017, the Company expects revenues to range between $940 and $946 million, or a constant currency growth rate of 2% quarter over quarter.  This guidance includes a negative foreign currency impact of $18 million when compared to the average FX rates in Q4 2016.  Cash gross margins are expected to approximate 67-68%.  Cash selling, general and administrative expenses are expected to range between $208 and $214 million. Adjusted EBITDA is expected to range between $421 and $427 million, which includes a $10 million negative foreign currency impact when compared to the average FX rates in Q4 2016, $14 million of integration costs from acquisitions and $18 million of seasonally adjusted costs. Capital expenditures are expected to range between $280 and $300 million, which includes approximately $30 million of recurring capital expenditures.

For the full year of 2017, total revenues are expected to be greater than $3,933 million, a normalized and constant currency growth rate of greater than 11% year over year. This guidance includes a negative foreign currency impact of $88 million when compared to prior Equinix guidance rates, and has been normalized for the Telecity January 15th close impact and other acquisition related activities. Total year cash gross margins are expected to approximate 67-68%.  Cash selling, general and administrative expenses are expected to range between $805 and $825 million.  Adjusted EBITDA is expected to be greater than $1,842 million, a normalized and constant currency growth rate of greater than 11% year over year.  This guidance includes $37 million of negative foreign currency impact on adjusted EBITDA when compared to prior Equinix guidance rates and an expected $30 million in integration costs.  AFFO is expected to be greater than $1,249 million. Capital expenditures are expected to range between $1,100 and $1,200 million, including approximately $160 - $165 million of recurring capital expenditures and $940 - $1,035 million of non-recurring capital expenditures. 

The U.S. dollar exchange rates used for 2017 guidance, taking into consideration the impact of our foreign currency hedges, have been updated to $1.08 to the Euro, $1.40 to the Pound, S$1.45 to the U.S. dollar,  ¥117.65 to the U.S. dollar and R$3.26 to the U.S. dollar. The 2017 global revenue breakdown by currency for the Euro, Pound, Singapore Dollar, Japanese Yen and Brazilian Real is 19%, 9%, 6%, 7% and 3%, respectively.

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.

Q4 2016 Results Conference Call and Replay Information

Equinix will discuss its quarterly results for the period ended December 31, 2016, along with its future outlook, in its quarterly conference call on Wednesday, February 15, 2017, at 5:30 p.m. ET (2:30 p.m. PT). A simultaneous live webcast of the call will be available on Equinix'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 Tuesday, May 16, 2017, by dialing 1-402-220-6419 and referencing the passcode 2017. 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

Equinix has made available on its website a presentation designed to accompany the discussion of Equinix's results and future outlook, along with certain supplemental financial information and other data. Interested parties may access this information through Equinix's Investor Relations website at www.equinix.com/investors.

Additional Resources

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 41 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

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 to evaluate its operations.

Equinix 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.

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, Equinix excludes certain items that it believes are not good indicators of Equinix'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.  Equinix excludes these items in order for its lenders, investors and the industry analysts who review and report on Equinix to better evaluate Equinix'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 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 Equinix 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, Equinix excludes depreciation from its operating results when evaluating its operations.

In addition, in presenting the non-GAAP financial measures, Equinix also excludes amortization expense related to acquired intangible assets. Amortization expense is significantly affected by the timing and magnitude of acquisitions and these charges may vary in amount from period to period. We exclude amortization expense to facilitate a more meaningful evaluation of our current operating performance and comparisons to our prior periods. 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 also believes are not meaningful in evaluating Equinix's current operations. Equinix excludes stock-based compensation expense, as it can vary significantly from period to period based on share price, the timing, size and nature of equity awards. As such, Equinix and many investors and analysts, exclude this stock-based compensation expense to compare its operating results with those of other companies. Equinix excludes restructuring charges from its non-GAAP financial measures. The restructuring charges relate to Equinix'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.  Equinix 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. Equinix also excludes gains on asset sales as it represents profit that is not meaningful in evaluating the current or future operating performance. Finally, Equinix excludes acquisition costs from its non-GAAP financial measures to allow more comparable comparisons of the financial results to the historical operations. The acquisition costs relate to costs Equinix incurs in connection with business combinations. Such charges generally are not relevant to assessing the long-term performance of Equinix. In addition, the frequency and amount of such charges vary significantly based on the size and timing of the acquisitions. 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.

Equinix 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 (loss) 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 costs for the same reasons that they are excluded from the other non-GAAP financial measures mentioned above. 

Equinix 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. Equinix 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. Equinix 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. Equinix excludes gains (losses) on debt extinguishment since it represents a cost that is not a good indicator of Equinix's current or future operating performance. Equinix includes an income tax expense adjustment, which represents the non-cash tax impact due to changes in valuation allowances and uncertain tax positions that do not relate to the current period's operations. Equinix 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. Equinix also excludes net income (loss) from discontinued operations, net of tax, which represents results that are not a good indicator of our current or future operating performance.

Equinix presents constant currency results of operations, which is a non-GAAP financial measure and is not meant to be considered in isolation or as an alternative to GAAP results of operations. However, Equinix has presented this non-GAAP financial measure to provide investors with an additional tool to evaluate its operating results without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of Equinix's business performance. To present this information, Equinix's current and comparative prior period revenues and certain operating expenses from entities with functional currencies other than the U.S. dollar are converted into U.S. dollars at a consistent exchange rate for purposes of each result being compared.

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 GAAP financials measures. Equinix presents such non-GAAP financial measures to provide investors with an additional tool to evaluate its 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. 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 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 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 without unreasonable effort. The impact of such adjustments could be significant. 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 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


Twelve Months Ended




December 31,


September 30,


December 31,


December 31,


December 31,




2016


2016


2015


2016


2015













Recurring revenues

$       892,442


$        877,006


$       686,072


$    3,417,374


$    2,569,141

Non-recurring revenues

50,205


47,670


44,390


194,615


156,726


Revenues

942,647


924,676


730,462


3,611,989


2,725,867













Cost of revenues

465,921


470,302


351,968


1,820,870


1,291,506



Gross profit

476,726


454,374


378,494


1,791,119


1,434,361













Operating expenses:











Sales and marketing

113,384


110,936


88,439


438,742


332,012


General and administrative

178,956


181,239


136,829


694,561


493,284


Impairment charges

-


7,698


-


7,698


-


Acquisition costs

(440)


12,505


17,349


64,195


41,723


(Gain) loss on asset sales

371


(27,945)


-


(32,816)


-



Total operating expenses

292,271


284,433


242,617


1,172,380


867,019













Income from continuing operations

184,455


169,941


135,877


618,739


567,342













Interest and other income (expense):











Interest income

948


762


1,206


3,476


3,581


Interest expense

(98,761)


(92,200)


(79,499)


(392,156)


(299,055)


Other income (expense)

(1,707)


2,938


(48,617)


(57,924)


(60,581)


Loss on debt extinguishment 

(1,777)


(9,894)


(289)


(12,276)


(289)



Total interest and other, net

(101,297)


(98,394)


(127,199)


(458,880)


(356,344)













Income from continuing operations before income taxes

83,158


71,547


8,678


159,859


210,998














Income tax benefit (expense)

(19,494)


(22,778)


2,053


(45,451)


(23,224)













Net income from continuing operations

63,664


48,769


10,731


114,408


187,774














Net income (loss) from discontinued operations, net of tax

(1,914)


2,681


-


12,392


-













Net income


$         61,750


$          51,450


$         10,731


$       126,800


$       187,774













Net income per share:























Basic net income per share from continuing operations

$            0.89


$             0.69


$            0.18


$            1.63


$            3.25


Basic net income (loss) per share from discontinued operations

(0.03)


0.04


-


0.18


-


Basic net income per share

$            0.86


$             0.73


$            0.18


$            1.81


$            3.25














Diluted net income per share from continuing operations

$            0.88


$             0.68


$            0.18


$            1.62


$            3.21


Diluted net income (loss) per share from discontinued operations

(0.02)


0.04


-


0.17


-


Diluted net income per share

$            0.86


$             0.72


$            0.18


$            1.79


$            3.21














Shares used in computing basic net income per share

71,389


71,190


60,393


70,117


57,790














Shares used in computing diluted net income per share

71,959


71,908


60,943


70,816


58,483




EQUINIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)














Three Months Ended


Twelve Months Ended



December 31,


September 30,


December 31,


December 31,


December 31,



2016


2016


2015


2016


2015












Net income

$         61,750


$          51,450


$         10,731


$       126,800


$       187,774












Other comprehensive loss, net of tax:











Foreign currency translation adjustment ("CTA") loss 

(292,355)


(32,603)


(37,217)


(507,420)


(186,763)


Unrealized gain (loss) on available-for-sale securities 

(133)


1,487


(139)


2,249


(40)


Unrealized gain (loss) on cash flow hedges 

15,762


(4,153)


4,975


19,551


4,550


Net investment hedge CTA gain (loss) 

41,342


(34,721)


10,447


45,505


4,484


Net actuarial gain on defined benefit plans 

11


7


887


32


1,153

Other comprehensive loss, net of tax: 

(235,373)


(69,983)


(21,047)


(440,083)


(176,616)












Comprehensive income (loss), net of tax 

$      (173,623)


$         (18,533)


$        (10,316)


$      (313,283)


$         11,158




EQUINIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)







Assets

December 31,


 December 31, 




2016


2015







Cash and cash equivalents

$       748,476


$      2,228,838

Short-term investments

3,409


12,875

Accounts receivable, net

396,245


291,964

Current portion of restricted cash

15,065


479,417

Other current assets

304,331


212,929

Assets held for sale

-


33,257


Total current assets

1,467,526


3,259,280

Long-term investments

10,042


4,584

Property, plant and equipment, net

7,199,210


5,606,436

Goodwill


2,986,064


1,063,200

Intangible assets, net

719,231


224,565

Other assets

226,298


198,630


Total assets

$  12,608,371


$    10,356,695







Liabilities and Stockholders' Equity










Accounts payable and accrued expenses

$       581,739


$         400,948

Accrued property, plant and equipment

144,842


103,107

Current portion of capital lease and other financing obligations

101,046


40,121

Current portion of mortgage and loans payable

67,928


770,236

Convertible debt

-


146,121

Other current liabilities

133,140


192,286

Liabilities held for sale

-


3,535


Total current liabilities

1,028,695


1,656,354

Capital lease and other financing obligations, less current portion

1,410,742


1,287,139

Mortgage and loans payable, less current portion

1,369,087


472,769

Senior notes

3,810,770


3,804,634

Other liabilities

623,248


390,413


Total liabilities

8,242,542


7,611,309







Common stock

72


62

Additional paid-in capital

7,413,519


4,838,444

Treasury stock

(147,559)


(7,373)

Accumulated dividends

(1,969,645)


(1,468,472)

Accumulated other comprehensive loss

(949,142)


(509,059)

Retained earnings (accumulated deficit)

18,584


(108,216)


Total stockholders' equity

4,365,829


2,745,386


Total liabilities and stockholders' equity

$  12,608,371


$    10,356,695



















Ending headcount by geographic region is as follows:











Americas headcount

2,510


2,329


EMEA headcount

2,063


1,188


Asia-Pacific headcount

1,420


1,525



Total headcount

5,993


5,042




EQUINIX, INC.

SUMMARY OF DEBT PRINCIPAL OUTSTANDING

(in thousands)

(unaudited)








December 31,


December 31,



2016


2015






Capital lease and other financing obligations

$    1,511,788


$    1,327,260






Term loans, net of debt discount and debt issuance costs

993,572


454,503

Japanese Yen term loan, net of debt issuance costs

397,199


-

Brazil financings, net of debt issuance costs

-


26,668

Mortgage payable and other loans payable

46,244


436,212

Revolving credit facility borrowings

-


325,622

Plus: debt discount, debt issuance costs and premium, net

20,949


694


Total mortgage and loans payable principal

1,457,964


1,243,699






Senior notes, net of debt issuance costs

3,810,770


3,804,634

Plus: debt issuance costs

39,230


45,366


Total senior notes principal

3,850,000


3,850,000






Convertible debt, net of debt discount and debt issuance costs

-


146,121

Plus: debt discount and debt issuance costs

-


3,961


Total convertible debt principal

-


150,082






Total debt principal outstanding

$    6,819,752


$    6,571,041




EQUINIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)




















Three Months Ended


Twelve Months Ended



December 31,


September 30,


December 31,


December 31,


December 31,






2016


2016


2015


2016


2015















Cash flows from operating activities:











Net income


$         61,750


$          51,450


$         10,731


$       126,800


$       187,774


Adjustments to reconcile net income to net cash











provided by operating activities:












Depreciation, amortization and accretion

212,268


215,370


144,861


843,510


528,929



Stock-based compensation

39,837


42,346


33,868


155,567


132,443



Amortization of debt issuance costs and debt discounts

5,428


2,684


4,493


19,137


16,050



Loss on debt extinguishment 

1,777


10,181


289


12,276


289



Impairment charges

-


7,698


-


7,698


-



(Gain) loss on asset sales

371


(27,945)


-


(32,816)


-



(Gain) loss on sale of discontinued operations

1,891


(4,242)


-


(2,351)


-



Other items

3,706


3,905


5,452


19,793


18,148



Changes in operating assets and liabilities:













Accounts receivable

(27,423)


(30,440)


(2,581)


(100,230)


(44,583)




Income taxes, net

27,999


24,776


(25,056)


29,020


(109,579)




Accounts payable and accrued expenses

73,091


(901)


33,906


61,565


109,125




Other assets and liabilities

(101,385)


39,290


29,155


(123,389)


56,197





Net cash provided by operating activities

299,310


334,172


235,118


1,016,580


894,793

Cash flows from investing activities:











Purchases, sales and maturities of investments, net

779


(2,123)


(9,369)


10,839


514,108


Business acquisitions, net of cash acquired

621


(165,901)


(235,306)


(1,766,907)


(245,553)


Purchases of real estate

-


-


-


(28,118)


(38,282)


Purchases of other property, plant and equipment

(386,321)


(279,477)


(280,612)


(1,113,365)


(868,120)


Proceeds from asset sales

23,385


805,372


-


851,582


-


Other investing activities

9,078


(21,851)


(3,709)


453,814


(497,080)





Net cash provided by (used in) investing activities

(352,458)


336,020


(528,996)


(1,592,155)


(1,134,927)

Cash flows from financing activities:











Proceeds from employee equity awards

36


16,504


185


34,179


30,040


Payments of dividend distributions

(125,312)


(127,457)


(230,452)


(499,463)


(521,461)


Proceeds from public offering of common stock, net of issuance costs

-


-


829,496


-


829,496


Proceeds from loans payable

457,900


9,154


707,108


1,168,304


1,197,108


Proceeds from senior notes

-


-


1,100,000


-


1,100,000


Repayment of capital lease and other financing obligations

(13,522)


(55,528)


(8,450)


(114,385)


(28,663)


Repayments of mortgage and loans payable and convertible debt

(476,474)


(13,354)


(185,823)


(1,462,939)


(715,270)


Debt extinguishment costs

(1,199)


(10,181)


-


(11,380)


-


Debt issuance costs

370


(11,709)


(17,481)


(11,381)


(18,098)


Other financing activities

1,308


1,465


(1,633)


2,773


30





Net cash provided by (used in) financing activities

(156,893)


(191,106)


2,192,950


(894,292)


1,873,182

Effect of foreign currency exchange rates on cash and cash equivalents

(33,153)


4,313


(5,703)


(10,495)


(15,127)

Change in cash balances included in assets held for sale

3,755


21,356


-


-


-

Net increase (decrease) in cash and cash equivalents

(239,439)


504,755


1,893,369


(1,480,362)


1,617,921

Cash and cash equivalents at beginning of period

987,915


483,160


335,469


2,228,838


610,917

Cash and cash equivalents at end of period

$       748,476


$        987,915


$    2,228,838


$       748,476


$    2,228,838
















Supplemental cash flow information:












Cash paid (refunded) for taxes

$          7,817


$               (73)


$         29,165


$         39,320


$       132,302



Cash paid for interest

$         78,553


$        111,094


$         73,044


$       350,083


$       237,410















Free cash flow (negative free cash flow) (1)

$        (53,927)


$        672,315


$      (284,509)


$      (586,414)


$      (754,242)















Adjusted free cash flow (adjusted negative free cash flow)  (2)

$        (53,240)


$        839,681


$        (33,081)


$    1,211,384


$      (385,543)





























(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

$       299,310


$        334,172


$       235,118


$    1,016,580


$       894,793


Net cash provide by (used in) investing activities as presented above

(352,458)


336,020


(528,996)


(1,592,155)


(1,134,927)


Purchases, sales and maturities of investments, net

(779)


2,123


9,369


(10,839)


(514,108)



Free cash flow (negative free cash flow)

$        (53,927)


$        672,315


$      (284,509)


$      (586,414)


$      (754,242)















(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)

$        (53,927)


$        672,315


$      (284,509)


$      (586,414)


$      (754,242)


Less business acquisitions, net of cash

(621)


165,901


235,306


1,766,907


245,553


Less purchases of real estate

-


-


-


28,118


38,282


Less excess tax benefits from employee equity awards

1,308


1,465


(1,633)


2,773


30


Less cash paid for taxes resulting from the REIT conversion 

-


-


17,306


-


82,452


Less costs related to the REIT conversion

-


-


449


-


2,382



Adjusted free cash flow

$        (53,240)


$        839,681


$        (33,081)


$    1,211,384


$      (385,543)






























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


$               -


$         82,452


Other cash taxes paid

7,817


(73)


11,859


39,320


49,850



Total cash paid for taxes

$          7,817


$               (73)


$         29,165


$         39,320


$       132,302




EQUINIX, INC.

NON-GAAP MEASURES AND OTHER SUPPLEMENTAL DATA

(in thousands)

(unaudited)


















Three Months Ended


Twelve Months Ended





December 31,


September 30,


December 31,


December 31,


December 31,





2016


2016


2015


2016


2015














Recurring revenues



$       892,442


$         877,006


$       686,072


$    3,417,374


$    2,569,141

Non-recurring revenues


50,205


47,670


44,390


194,615


156,726


Revenues (1)


942,647


924,676


730,462


3,611,989


2,725,867














Cash cost of revenues (2)

301,540


304,821


227,956


1,169,494


836,439




Cash gross profit (3)

641,107


619,855


502,506


2,442,495


1,889,428














Cash operating expenses (4):











Cash sales and marketing expenses (5)

85,196


79,515


72,069


322,474


269,270


Cash general and administrative expenses (6)

119,420


120,298


97,292


462,547


348,531




Total cash operating expenses (7)

204,616


199,813


169,361


785,021


617,801














Adjusted EBITDA (8)


$       436,491


$         420,042


$       333,145


$    1,657,474


$    1,271,627














Cash gross margins (9)

68%


67%


69%


68%


69%














Adjusted EBITDA margins (10)

46%


45%


46%


46%


47%














Adjusted EBITDA flow-through rate (11)

92%


(1%)


27%


44%


56%














FFO (12)



$       219,868


$         187,831


$       131,483


$       725,089


$       629,238














AFFO (13) (14)



$       293,785


$         284,179


$       178,293


$    1,078,339


$       831,798








































(1)

The geographic split of our revenues on a services basis is presented below:
























Americas Revenues:
























Colocation


$       299,200


$         294,046


$       274,198


$    1,161,665


$    1,059,713


Interconnection

100,459


94,865


84,796


374,655


321,198


Managed infrastructure

14,385


14,649


10,927


53,404


48,042


Other



943


902


817


3,360


3,131



Recurring revenues

414,987


404,462


370,738


1,593,084


1,432,084


Non-recurring revenues

21,555


20,680


23,751


86,465


80,451



Revenues

436,542


425,142


394,489


1,679,549


1,512,535















EMEA Revenues:
























Colocation


242,829


244,420


146,879


941,848


562,817


Interconnection

22,280


21,464


16,775


85,869


58,490


Managed infrastructure

17,243


16,359


7,619


67,553


25,196


Other



2,919


3,947


862


11,382


5,275



Recurring revenues

285,271


286,190


172,135


1,106,652


651,778


Non-recurring revenues

16,353


15,060


10,519


64,687


47,029



Revenues

301,624


301,250


182,654


1,171,339


698,807















Asia-Pacific Revenues:
























Colocation


146,483


140,493


112,498


543,581


397,345


Interconnection

23,159


21,172


18,979


82,521


62,061


Managed infrastructure

22,362


24,138


9,447


89,335


23,598


Other



180


551


2,275


2,201


2,275



Recurring revenues

192,184


186,354


143,199


717,638


485,279


Non-recurring revenues

12,297


11,930


10,120


43,463


29,246



Revenues

204,481


198,284


153,319


761,101


514,525















Worldwide Revenues:
























Colocation


688,512


678,959


533,575


2,647,094


2,019,875


Interconnection

145,898


137,501


120,550


543,045


441,749


Managed infrastructure

53,990


55,146


27,993


210,292


96,836


Other



4,042


5,400


3,954


16,943


10,681



Recurring revenues

892,442


877,006


686,072


3,417,374


2,569,141


Non-recurring revenues

50,205


47,670


44,390


194,615


156,726



Revenues

$       942,647


$         924,676


$       730,462


$    3,611,989


$    2,725,867














(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

$       465,921


$         470,302


$       351,968


$    1,820,870


$    1,291,506


Depreciation, amortization and accretion expense

(161,049)


(162,165)


(121,505)


(638,290)


(445,189)


Stock-based compensation expense

(3,332)


(3,316)


(2,507)


(13,086)


(9,878)



Cash cost of revenues

$       301,540


$         304,821


$       227,956


$    1,169,494


$       836,439















The geographic split of our cash cost of revenues is presented below:
























Americas cash cost of revenues

$       115,838


$         114,934


$       107,640


$       449,088


$       410,915


EMEA cash cost of revenues

113,796


116,587


64,089


446,842


249,457


Asia-Pacific cash cost of revenues

71,906


73,300


56,227


273,564


176,067



Cash cost of revenues

$       301,540


$         304,821


$       227,956


$    1,169,494


$       836,439














(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, marketing, 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

$       113,384


$         110,936


$         88,439


$       438,742


$       332,012


Depreciation and amortization expense

(17,345)


(19,719)


(7,329)


(73,238)


(25,895)


Stock-based compensation expense

(10,843)


(11,702)


(9,041)


(43,030)


(36,847)



Cash sales and marketing expenses

$         85,196


$           79,515


$         72,069


$       322,474


$       269,270














(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

$       178,956


$         181,239


$       136,829


$       694,561


$       493,284


Depreciation and amortization expense

(33,874)


(33,486)


(16,027)


(131,982)


(57,845)


Stock-based compensation expense

(25,662)


(27,455)


(23,510)


(100,032)


(86,908)



Cash general and administrative expenses

$       119,420


$         120,298


$         97,292


$       462,547


$       348,531














(7)

Our cash operating expenses, or cash SG&A, as defined above, is presented below:



















Cash sales and marketing expenses

$         85,196


$           79,515


$         72,069


$       322,474


$       269,270


Cash general and administrative expenses

119,420


120,298


97,292


462,547


348,531



Cash SG&A

$       204,616


$         199,813


$       169,361


$       785,021


$       617,801















The geographic split of our cash operating expenses, or cash SG&A, is presented below:



















Americas cash SG&A

$       115,012


$         108,077


$       106,035


$       443,150


$       403,016


EMEA cash SG&A

59,977


63,195


36,971


230,234


130,789


Asia-Pacific cash SG&A

29,627


28,541


26,355


111,637


83,996



Cash SG&A

$       204,616


$         199,813


$       169,361


$       785,021


$       617,801














(8)

We define adjusted EBITDA as income from continuing operations excluding depreciation, amortization, accretion, stock-based compensation expense, impairment charges, acquisition costs and gains on asset sales as presented below:



















Income from continuing operations

$       184,455


$         169,941


$       135,877


$       618,739


$       567,342


Depreciation, amortization and accretion expense

212,268


215,370


144,861


843,510


528,929


Stock-based compensation expense

39,837


42,473


35,058


156,148


133,633


Impairment charges

-


7,698


-


7,698


-


Acquisition costs

(440)


12,505


17,349


64,195


41,723


(Gain) loss on asset sales

371


(27,945)


-


(32,816)


-



Adjusted EBITDA

$       436,491


$         420,042


$       333,145


$    1,657,474


$    1,271,627















The geographic split of our adjusted EBITDA is presented below:



















Americas income from continuing operations

$         87,537


$           89,004


$         83,425


$       352,180


$       324,458


Americas depreciation, amortization and accretion expense

83,305


82,204


73,023


321,103


278,644


Americas stock-based compensation expense

28,312


29,309


25,576


109,740


100,760


Americas acquisition costs

6,538


1,614


(1,210)


9,530


(5,258)


Americas gain on asset sales

-


-


-


(5,242)


-



Americas adjusted EBITDA

205,692


202,131


180,814


787,311


698,604















EMEA income from continuing operations

51,347


51,829


34,011


124,853


145,527


EMEA depreciation, amortization and accretion expense

76,598


78,555


30,434


314,570


118,008


EMEA stock-based compensation expense

6,884


8,138


4,348


28,317


16,690


EMEA acquisition costs

(6,978)


10,891


12,801


54,468


38,336


EMEA gain on asset sales

-


(27,945)


-


(27,945)


-



EMEA adjusted EBITDA

127,851


121,468


81,594


494,263


318,561















Asia-Pacific income from continuing operations

45,571


29,108


18,441


141,706


97,357


Asia-Pacific depreciation, amortization and accretion expense

52,365


54,611


41,404


207,837


132,277


Asia-Pacific stock-based compensation expense

4,641


5,026


5,134


18,091


16,183


Asia-Pacific impairment charges

-


7,698


-


7,698


-


Asia-Pacific acquisition costs

-


-


5,758


197


8,645


Asia-Pacific loss on asset sales

371


-


-


371


-



Asia-Pacific adjusted EBITDA

102,948


96,443


70,737


375,900


254,462
















Adjusted EBITDA

$       436,491


$         420,042


$       333,145


$    1,657,474


$    1,271,627














(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%


73%


73%


73%















EMEA cash gross margins

62%


61%


65%


62%


64%















Asia-Pacific cash gross margins

65%


63%


63%


64%


66%














(10)

We define adjusted EBITDA margins as adjusted EBITDA divided by revenues.
























Americas adjusted EBITDA margins

47%


48%


46%


47%


46%















EMEA adjusted EBITDA margins

42%


40%


45%


42%


46%















Asia-Pacific adjusted EBITDA margins

50%


49%


46%


49%


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

$       436,491


$         420,042


$       333,145


$    1,657,474


$    1,271,627


Less adjusted EBITDA - prior period

(420,042)


(420,291)


(321,472)


(1,271,627)


(1,113,891)



Adjusted EBITDA growth

$         16,449


$              (249)


$         11,673


$       385,847


$       157,736















Revenues - current period

$       942,647


$         924,676


$       730,462


$    3,611,989


$    2,725,867


Less revenues - prior period

(924,676)


(900,510)


(686,649)


(2,725,867)


(2,443,776)



Revenue growth

$         17,971


$           24,166


$         43,813


$       886,122


$       282,091















Adjusted EBITDA flow-through rate

92%


(1%)


27%


44%


56%



























(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


$         61,750


$           51,450


$         10,731


$       126,800


$       187,774


Adjustments:













Real estate depreciation and amortization

157,054


159,788


120,144


626,564


439,969



(Gain) loss on disposition of real estate property

1,036


(23,436)


579


(28,388)


1,382



Adjustments for FFO from unconsolidated joint ventures

28


29


29


113


113



FFO 

$       219,868


$         187,831


$       131,483


$       725,089


$       629,238



























(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 discontinued 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 



$       219,868


$         187,831


$       131,483


$       725,089


$       629,238


Adjustments:













Installation revenue adjustment

4,788


4,612


5,843


20,161


35,498



Straight-line rent expense adjustment

1,986


2,686


1,462


7,700


7,931



Amortization of deferred financing costs

5,258


2,687


4,495


18,696


16,135



Stock-based compensation expense

39,837


42,474


35,058


156,149


133,633



Non-real estate depreciation expense

23,265


22,108


15,921


87,781


58,165



Amortization expense

29,478


32,929


8,100


122,862


27,446



Accretion expense

2,471


545


696


6,303


3,349



Recurring capital expenditures

(36,476)


(41,600)


(44,668)


(141,819)


(120,281)



Loss on debt extinguishment

1,777


9,894


289


12,276


289



Acquisition costs

(440)


12,505


17,349


64,195


41,723



Impairment charges

-


7,698


-


7,698


-



Income tax expense adjustment

68


2,501


2,279


3,680


(1,270)



Net (income) loss from discontinued operations, net of tax

1,914


(2,681)


-


(12,392)


-



Adjustments for AFFO from unconsolidated joint ventures

(9)


(10)


(14)


(40)


(58)



AFFO

$       293,785


$         284,179


$       178,293


$    1,078,339


$       831,798














(14)

Following is how we reconcile from adjusted EBITDA to AFFO:



















Adjusted EBITDA 

$       436,491


$         420,042


$       333,145


$    1,657,474


$    1,271,627


Adjustments:













Interest expense, net of interest income

(97,813)


(91,437)


(78,293)


(388,679)


(295,474)



Amortization of deferred financing costs

5,258


2,687


4,495


18,696


16,135



Income tax benefit (expense)

(19,494)


(22,778)


2,053


(45,451)


(23,224)



Income tax expense adjustment

68


2,501


2,279


3,680


(1,270)



Straight-line rent expense adjustment

1,986


2,686


1,462


7,700


7,931



Installation revenue adjustment

4,788


4,612


5,843


20,161


35,498



Recurring capital expenditures

(36,476)


(41,600)


(44,668)


(141,819)


(120,281)



Other income (expense)

(1,707)


2,938


(48,617)


(57,924)


(60,581)



(Gain) loss on disposition of depreciable real estate property

1,036


(23,436)


579


(28,388)


1,382



Adjustments for unconsolidated JVs' and non-controlling interests

19


19


15


73


55



Adjustment for gain (loss) on sale of asset

(371)


27,945


-


32,816


-



AFFO

$       293,785


$         284,179


$       178,293


$    1,078,339


$       831,798

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/equinix-reports-fourth-quarter-and-full-year-2016-results-300408174.html

SOURCE Equinix, Inc.