Equinix Reports Second Quarter 2018 Results

REDWOOD CITY, Calif., Aug. 8, 2018 /PRNewswire/ --

    --  Quarterly revenues increased 18% year-over-year to $1.262 billion; a 9%
        year-over-year increase on a normalized and constant currency basis
    --  Key customer wins and expansions included China Mobile, Lithia Motors
        and Tencent
    --  Customer deployments across multiple metros increased to 85% of total
        recurring revenue, demonstrating the value of the Equinix global
        platform

Equinix, Inc. (Nasdaq: EQIX), the global interconnection and data center company, today reported quarterly results for the quarter ended June 30, 2018. 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.

Second Quarter 2018 Results Summary

    --  Revenues
        --  $1.262 billion, a 4% increase over the previous quarter
    --  Operating Income
        --  $215 million
    --  Adjusted EBITDA
        --  $604 million, a 48% adjusted EBITDA margin
        --  Includes $10 million of integration costs for acquisitions
    --  Net Income
        --  $68 million
        --  Includes $30 million of acquisition costs and $19 million of loss on
            debt extinguishment costs primarily related to the Infomart
            acquisition
    --  AFFO
        --  $428 million, a 3% increase over the previous quarter
        --  Includes $10 million of integration costs for acquisitions

2018 Annual Guidance Summary

    --  Revenues
        --  $5.037 - $5.077 billion, a 16% increase over the previous year; a
            normalized and constant currency increase of 9%, including $55
            million of FX headwinds compared to prior guidance
    --  Adjusted EBITDA
        --  $2.379 - $2.419 billion or a 47% adjusted EBITDA margin, including
            $21 million of FX headwinds compared to prior guidance, or 48%
            excluding integration costs for acquisitions
        --  Assumes $49 million of integration costs for acquisitions
    --  AFFO
        --  $1.596 - $1.636 billion, a 12% increase over the previous year,
            including $4 million of FX headwinds compared to prior guidance
        --  Assumes $49 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
Peter Van Camp, Executive Chairman and Interim CEO and President, Equinix:

"Equinix delivered another strong quarter with record bookings across all three regions and virtually all key operating metrics showing solid momentum in our go-to-market engine and interconnection strategy. Our unique global platform of 200 data centers, and the customer ecosystems within them, remain at the heart of our strategy, as evidenced by strong cross-regional sales and healthy interconnection activity in Q2. We are looking forward to the second half of the year as we focus on our strategic initiatives, deliver value from our acquisitions and work to convert a healthy customer pipeline."

Q2 Business Highlights

    --  Equinix continued to expand its global platform in response to strong
        underlying demand. In addition to progress with the integration of
        acquired assets from Infomart, Metronode and Verizon, Equinix completed
        expansions in the Amsterdam, Denver and London metros. With a
        utilization rate of 82% across the platform, Equinix has an active
        pipeline of 32 expansion projects currently underway, including a
        partnership with Omantel to enter the new market of Muscat, Oman, with a
        new IBX data center opening next year that will serve as a regional
        interconnection hub between global business markets.
    --  Equinix completed the integration of Terremark Federal Group (TFG) into
        Equinix Government Solutions, expanding the company's Federal industry
        expertise and adding key capabilities for Federal agencies and systems
        integrators. This integration included 33 new Equinix employees who
        bring a deep understanding of the Federal sector to act as trusted
        advisors for IT transformation initiatives. The diverse portfolio of
        Equinix assets, including former Verizon government campuses in Miami
        and Culpeper, enables support for sensitive government workloads in an
        optimal environment, based on security, cost and performance.
    --  Interconnection revenue continued to outpace colocation revenue,
        reflecting the movement towards Interconnection Oriented
        Architecture(®) strategies and the rapid adoption of hybrid, multicloud
        as the preferred IT deployment model. Cross connects between customers
        increased to more than 288,000, and the Equinix Cloud Exchange Fabric(TM
        )(ECX Fabric(TM)) platform now serves more than 1,200 customers. This
        includes those deploying virtual connections through the new
        capabilities of ECX Fabric, which was extended in Q2 to Australia and
        Japan with full rollout in the Asia-Pacific region targeted for Q3, and
        full inter-regional connectivity slated for delivery by year end.
    --  Equinix continued the growth of its indirect selling initiatives, with
        channel sales increasing to more than 20% of bookings for the quarter.
        This accounted for half of the new logos acquired in the quarter, driven
        by solid performance across all regions and channels, including
        alliance, reseller and referral partners.

Business Outlook

For the third quarter of 2018, the Company expects revenues to range between $1.272 and $1.282 billion, an increase of 1% quarter-over-quarter, or a normalized and constant currency growth rate of approximately 2%. This guidance includes a negative foreign currency impact of $14 million when compared to the average FX rates in Q2 2018. Adjusted EBITDA is expected to range between $591 and $601 million, which includes a $9 million negative foreign currency impact when compared to the average FX rates in Q2 2018, higher seasonal utilities costs and $15 million of integration costs from acquisitions. Recurring capital expenditures are expected to range between $56 and $66 million.

For the full year of 2018, total revenues are expected to range between $5.037 and $5.077 billion, an increase of 16% year-over-year, or a normalized and constant currency growth rate of approximately 9%. This updated guidance includes a raise of full year revenues guidance of $10 million, offset by a negative foreign currency impact of $55 million when compared to prior Equinix guidance rates. Adjusted EBITDA is expected to range between $2.379 and $2.419 billion, an increase of 17% year-over-year. This updated guidance includes a raise of full year adjusted EBITDA guidance of $5 million, offset by a negative foreign currency impact of $21 million when compared to prior Equinix guidance rates, and an expected $49 million in integration costs. AFFO is expected to range between $1.596 and $1.636 billion, an increase of 12% year-over-year. This updated guidance includes a raise of full year AFFO guidance of $5 million, offset by a negative foreign currency impact of $4 million when compared to prior Equinix guidance rates. Also, AFFO includes an expected $49 million in integration costs. Non-recurring capital expenditures are expected to range between $1.8 and $1.9 billion, and recurring capital expenditures are expected to range between approximately $200 and $210 million.

The U.S. dollar exchange rates used for 2018 guidance, taking into consideration the impact of our current foreign currency hedges, have been updated to $1.14 to the Euro, $1.31 to the Pound, ¥111 to the U.S. dollar, S$1.36 to the U.S. dollar, and R$3.87 to the U.S. dollar. The Q2 2018 global revenue breakdown by currency for the Euro, British Pound, Japanese Yen, Singapore Dollar and Brazilian Real is 19%, 9%, 6%, 6% 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, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, 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.

Q2 2018 Results Conference Call and Replay Information

Equinix will discuss its quarterly results for the period ended June 30, 2018, along with its future outlook, in its quarterly conference call on Wednesday, August 8, 2018, at 5:30 p.m. ET (2:30 p.m. PT). A simultaneous live webcast of the call will be available on the Company's Investor Relations website at www.equinix.com/investors. To hear the conference call live, please dial 1-517-308-9482 (domestic and international) and reference the passcode EQIX.

A replay of the call will be available one hour after the call, through Thursday, November 1, 2018, by dialing 1-203-369-0283 and referencing the passcode 2018. In addition, the webcast will be available at www.equinix.com/investors (no password required).

Investor Presentation and Supplemental Financial Information

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

Additional Resources

    --  Equinix Investor Relations 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 52 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 provides normalized and constant currency growth rates, which are calculated to adjust for acquisitions, dispositions, integration costs, changes in accounting principles and foreign currency.

Equinix presents adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA represents income or loss from operations excluding depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, acquisition costs and gain or loss 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 gain or loss 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 data center, and do not reflect its current or future cash spending levels to support its business. Its IBX data centers are long-lived assets, and have an economic life greater than 10 years. The construction costs of an IBX data 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 data 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 data centers. These estimates could vary from actual performance of the asset, are based on historic costs incurred to build out our IBX data 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 and the timing, size and nature of equity awards. As such, Equinix and many investors and analysts exclude 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 data 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 gain or loss on asset sales as it represents profit or loss 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 gain or loss 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 or loss, excluding gain or loss 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, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain or loss on debt extinguishment, an income tax expense adjustment, recurring capital expenditures, net income or 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 revenues from installation fees, since installation fees are deferred and recognized ratably over the period of contract term, 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. Equinix also includes an adjustment to contract costs incurred to obtain contracts, since contract costs are capitalized and amortized over the estimated period of benefit on a straight-line basis, although costs of obtaining contracts are generally incurred and paid during the period of obtaining the contracts. The adjustments for installation revenues, straight-line rent expense and contract costs 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 and debt discounts and premiums 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 gain or loss 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 data centers or other assets that are required to support current revenues. Equinix also excludes net income or 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 financial 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 or 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 data 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 including the Infomart, Metronode and Verizon; a failure to receive significant revenues 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 filings with the Securities and Exchange Commission. In particular, see recent Equinix 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, INC.

                                                                                      Condensed Consolidated Statements of Operations

                                                                                           (in thousands, except per share data)

                                                                                                        (unaudited)


                                                              Three Months Ended                                                   Six Months Ended

                                         June 30,                    March 31,                 June 30,                     June 30,                          June 30,
                                              2018                             2018                   2017                              2018                           2017
                                              ----                             ----                   ----                              ----                           ----

    Recurring revenues                             $1,187,749                                    $1,150,629                                        $1,010,048                            $2,338,378 $1,908,488

    Non-recurring revenues                  74,194                             65,248                             56,373                               139,442                   107,458
                                            ------                             ------                             ------                               -------                   -------

    Revenues                             1,261,943                          1,215,877                          1,066,421                             2,477,820                 2,015,946

    Cost of revenues                       651,801                            622,430                            522,203                             1,274,231                   991,164
                                           -------                            -------                            -------                             ---------                   -------

    Gross profit                           610,142                            593,447                            544,218                             1,203,589                 1,024,782
                                           -------                            -------                            -------                             ---------                 ---------

    Operating expenses:

    Sales and marketing                    154,202                            159,776                            141,566                               313,978                   270,493

    General and administrative             210,489                            203,157                            191,355                               413,646                   372,754

    Acquisition costs                       30,413                              4,639                             26,402                                35,052                    29,427

    Total operating expenses               395,104                            367,572                            359,323                               762,676                   672,674
                                           -------                            -------                            -------                               -------                   -------

    Income from operations                 215,038                            225,875                            184,895                               440,913                   352,108
                                           -------                            -------                            -------                               -------                   -------

    Interest and other income (expense):

    Interest income                          3,958                              4,610                              4,437                                 8,568                     7,529

    Interest expense                     (134,673)                         (126,277)                          (119,042)                             (260,950)                (230,726)

    Other income (expense)                   8,866                            (3,064)                             1,284                                 5,802                     1,621

    Loss on debt extinguishment           (19,215)                          (21,491)                          (16,444)                             (40,706)                 (19,947)
                                           -------                            -------                            -------                               -------                   -------

    Total interest and other,
     net                                 (141,064)                         (146,222)                          (129,765)                             (287,286)                (241,523)
                                          --------                           --------                           --------                              --------                  --------

    Income before income taxes              73,974                             79,653                             55,130                               153,627                   110,585

    Income tax expense                     (6,356)                          (16,759)                           (9,325)                             (23,115)                 (22,718)
                                            ------                            -------                             ------                               -------                   -------

    Net income                                        $67,618                                       $62,894                                           $45,805                              $130,512    $87,867
                                                      =======                                       =======                                           =======                              ========    =======

    Net income per share:

    Basic net income per share                          $0.85                                         $0.79                                             $0.59                                 $1.64      $1.17
                                                        =====                                         =====                                             =====                                 =====      =====

    Diluted net income per
     share                                              $0.85                                         $0.79                                             $0.58                                 $1.64      $1.16
                                                        =====                                         =====                                             =====                                 =====      =====

    Shares used in computing
     basic net income per share             79,479                             79,241                             77,923                                79,361                    75,383
                                            ======                             ======                             ======                                ======                    ======

    Shares used in computing
     diluted net income per
     share                                  79,752                             79,649                             78,508                                79,746                    76,008
                                            ======                             ======                             ======                                ======                    ======


                                                                                                           EQUINIX, INC.

                                                                                  Condensed Consolidated Statements of Comprehensive Income (Loss)

                                                                                                           (in thousands)

                                                                                                            (unaudited)


                                                                       Three Months Ended                                                     Six Months Ended

                                                   June 30,                  March 31,                    June 30,                June 30,                June 30,
                                                        2018                           2018                      2017                    2018                      2017
                                                        ----                           ----                      ----                    ----                      ----

    Net income                                                 $67,618                                         $62,894                                          $45,805             $130,512   $87,867
                                                               -------                                         -------                                          -------             --------   -------

    Other comprehensive income (loss), net of tax:

    Foreign currency translation adjustment
     ("CTA") gain (loss)                           (421,233)                         145,851                               200,983                            (275,382)    307,921

    Net investment hedge CTA gain (loss)             226,115                         (72,635)                             (101,847)                              153,480  (130,398)

    Unrealized loss on available-for-sale
     securities                                            -                               -                                 (65)                                   -     (330)

    Unrealized gain (loss) on cash flow
     hedges                                           35,280                          (4,080)                             (27,671)                              31,200   (39,398)

    Net actuarial gain on defined benefit
     plans                                                13                                8                                    15                                   21         26
                                                         ---                              ---                                   ---                                  ---        ---

    Total other comprehensive income (loss),
     net of tax                                    (159,825)                          69,144                                71,415                             (90,681)   137,821
                                                    --------                           ------                                ------                              -------    -------

    Comprehensive income (loss), net of tax                  $(92,207)                                       $132,038                                         $117,220              $39,831  $225,688
                                                              ========                                        ========                                         ========              =======  ========


                                                     EQUINIX, INC.

                                         Condensed Consolidated Balance Sheets

                                                     (in thousands)

                                                      (unaudited)


                                              June 30,                        December 31,
                                                    2018                                    2017
                                                    ----                                    ----

                          Assets

    Cash and cash
     equivalents                                               $966,308                             $1,412,517

    Short-term investments                        18,199                                    28,271

    Accounts receivable,
     net                                         616,472                                   576,313

    Other current assets                         249,846                                   232,027
                                                 -------                                   -------

              Total current assets             1,850,825                                 2,249,128

    Long-term investments                          4,200                                     9,243

    Property, plant and
     equipment, net                           10,378,915                                 9,394,602

    Goodwill                                   4,870,300                                 4,411,762

    Intangible assets, net                     2,440,087                                 2,384,972

    Other assets                                 525,961                                   241,750
                                                 -------                                   -------

              Total assets                                  $20,070,288                            $18,691,457
                                                            ===========                            ===========

           Liabilities and Stockholders' Equity

    Accounts payable and
     accrued expenses                                          $710,584                               $719,257

    Accrued property,
     plant and equipment                         269,409                                   220,367

    Current portion of
     capital lease and
     other financing
     obligations                                  85,263                                    78,705

    Current portion of
     mortgage and loans
     payable                                      75,224                                    64,491

    Current portion of
     senior notes                                150,828                                         -

    Other current
     liabilities                                 142,312                                   159,914

              Total current
               liabilities                     1,433,620                                 1,242,734

    Capital lease and
     other financing
     obligations, less
     current portion                           1,426,368                                 1,620,256

    Mortgage and loans
     payable, less current
     portion                                   1,317,940                                 1,393,118

    Senior notes, less
     current portion                           8,334,383                                 6,923,849

    Other liabilities                            633,450                                   661,710
                                                 -------                                   -------

              Total liabilities               13,145,761                                11,841,667
                                              ----------                                ----------

    Common stock                                      80                                        79

    Additional paid-in
     capital                                  10,253,155                                10,121,323

    Treasury stock                             (145,632)                                (146,320)

    Accumulated dividends                    (2,960,183)                               (2,592,792)

    Accumulated other
     comprehensive loss                        (877,994)                                (785,189)

    Retained earnings                            655,101                                   252,689
                                                 -------                                   -------

              Total stockholders'
               equity                          6,924,527                                 6,849,790
                                               ---------                                 ---------

              Total liabilities and
               stockholders' equity                         $20,070,288                            $18,691,457
                                                            ===========                            ===========



    Ending headcount by geographic region is as
     follows:


              Americas headcount                   3,375                                     3,154

              EMEA headcount                       2,661                                     2,560

              Asia-Pacific
               headcount                           1,574                                     1,559
                                                   -----                                     -----

                        Total headcount            7,610                                     7,273
                                                   =====                                     =====


                                          EQUINIX, INC.

                              Summary of Debt Principal Outstanding

                                         (in thousands)

                                           (unaudited)


                              June 30, 2018                    December 31, 2017
                              -------------                   -----------------


    Capital lease
     and other
     financing
     obligations                                $1,511,631                           $1,698,961
                                                ----------                           ----------


    Term loans                    1,345,349                               1,406,686

    Mortgage
     payable and
     other loans
     payable                         47,815                                  50,923

    Plus: debt
     discount and
     issuance
     costs, net                       7,265                                   8,615
                                      -----                                   -----

               Total mortgage
                and loans
                payable
                principal         1,400,429                               1,466,224
                                  ---------                               ---------


    Senior notes                  8,485,211                               6,923,849

    Plus: debt
     issuance costs                  82,297                                  78,151

    Less: debt
     premium                        (7,158)                                      -
                                     ------                                     ---

              Total senior
               notes
               principal          8,560,350                               7,002,000
                                  ---------                               ---------


    Total debt
     principal
     outstanding                               $11,472,410                          $10,167,185
                                               ===========                          ===========


                                                                                                                                  EQUINIX, INC.

                                                                                                                 Condensed Consolidated Statements of Cash Flows

                                                                                                                                  (in thousands)

                                                                                                                                   (unaudited)


                                                                                            Three Months Ended                                                          Six Months Ended

                                                                 June 30,                         March 31,                      June 30,                       June 30,                           June 30,
                                                                       2018                                 2018                        2017                                2018                            2017
                                                                       ----                                 ----                        ----                                ----                            ----


    Cash flows from operating activities:

                    Net income                                                      $67,618                                             $62,894                                              $45,805                                $130,512            $87,867

                    Adjustments to reconcile net income to net cash provided by operating activities:

                    Depreciation, amortization and accretion          308,828                                306,465                                   252,386                                615,293                   471,399

                    Stock-based compensation                           49,725                                 42,536                                    45,625                                 92,261                    83,948

                     Amortization of debt issuance costs and
                     debt discounts and premiums                        3,362                                  4,099                                     4,130                                  7,461                    15,710

                    Loss on debt extinguishment                        19,215                                 21,491                                    16,444                                 40,706                    19,947

                    Other items                                         2,322                                  8,888                                     3,775                                 11,210                    12,155

                    Changes in operating assets and liabilities:

                    Accounts receivable                                32,834                               (71,275)                                (112,236)                              (38,441)                (151,900)

                    Income taxes, net                                 (7,485)                              (15,381)                                 (13,290)                              (22,866)                 (33,927)

                    Accounts payable and accrued expenses              10,818                               (35,143)                                   81,585                               (24,325)                   16,171

                    Other assets and liabilities                       51,491                               (23,667)                                 (17,751)                                27,824                    32,474

    Net cash provided by operating
     activities                                                     538,728                                300,907                                   306,473                                839,635                   553,844
                                                                    -------                                -------                                   -------                                -------                   -------

    Cash flows from investing activities:

                     Purchases, sales and maturities of
                     investments, net                                  13,240                                  (497)                                   10,303                                 12,743                     3,199

                     Business acquisitions, net of cash and
                     restricted cash acquired                       (830,993)                                     -                              (3,593,613)                              (830,993)              (3,629,654)

                    Purchases of real estate                         (27,082)                              (14,700)                                  (6,841)                              (41,782)                 (48,580)

                     Purchases of other property, plant and
                     equipment                                      (520,239)                             (349,729)                                 (348,572)                             (869,968)                (625,814)

                    Proceeds from asset sales                               -                                     -                                        -                                     -                   47,767

    Net cash used in investing activities                       (1,365,074)                              (364,926)                               (3,938,723)                            (1,730,000)              (4,253,082)
                                                                 ----------                               --------                                ----------                             ----------                ----------

    Cash flows from financing activities:

                    Proceeds from employee equity awards                   13                                 25,847                                        45                                 25,860                    20,119

                    Payment of dividend distributions               (181,760)                             (186,999)                                 (156,290)                             (368,759)                (304,373)

                     Proceeds from public offering of common
                     stock, net of offering costs                       7,622                                      -                                       83                                  7,622                 2,126,341

                    Proceeds from loans payable                             -                                     -                                        -                                     -                1,059,800

                    Proceeds from senior notes                              -                               929,850                                         -                               929,850                 1,250,000

                     Repayment of capital lease and other
                     financing obligations                           (14,069)                              (55,787)                                 (27,864)                              (69,856)                 (44,460)

                    Repayment of mortgage and loans payable          (18,816)                               (6,599)                                 (20,795)                              (25,415)                 (42,305)

                    Debt extinguishment costs                             148                               (20,704)                                  (8,122)                              (20,556)                 (11,254)

                    Debt issuance costs                                     -                              (11,583)                                       46                               (11,583)                 (40,619)

                    Other financing activities                            580                                      -                                        -                                   580                     (900)
                                                                        ---

    Net cash provided by (used in)
     financing activities                                         (206,282)                               674,025                                 (212,897)                               467,743                 4,012,349
                                                                   --------                                -------                                  --------                                -------                 ---------

    Effect of foreign currency exchange
     rates on cash, cash equivalents and
     restricted cash                                               (33,743)                                 7,903                                     5,327                               (25,840)                   16,868
                                                                    -------                                  -----                                     -----

    Net increase (decrease) in cash, cash
     equivalents and restricted cash                            (1,066,371)                                617,909                               (3,839,820)                              (448,462)                  329,979

    Cash, cash equivalents and restricted
     cash at beginning of period                                  2,068,610                              1,450,701                                 4,943,046                              1,450,701                   773,247


    Cash, cash equivalents and restricted
     cash at end of period                                                     $1,002,239                                          $2,068,610                                           $1,103,226                              $1,002,239         $1,103,226
                                                                               ==========                                          ==========                                           ==========                              ==========         ==========

    Supplemental cash flow information:

    Cash paid for taxes                                                           $17,681                                             $31,761                                              $16,269                                 $49,442            $45,821
                                                                                  =======                                             =======                                              =======                                 =======            =======

    Cash paid for interest                                                       $115,071                                            $107,057                                              $97,960                                $222,128           $213,394
                                                                                 ========                                            ========                                              =======                                ========           ========


    Free cash flow (negative free cash
     flow) (1)                                                                 $(839,586)                                          $(63,522)                                        $(3,642,553)                             $(903,108)      $(3,702,437)
                                                                                =========                                            ========                                          ===========                               =========        ===========


    Adjusted free cash flow (adjusted
     negative free cash flow) (2)                                                 $18,489                                           $(48,822)                                           $(42,099)                              $(30,333)         $(24,203)
                                                                                  =======                                            ========                                             ========                                ========           ========




             (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                                            $538,728                                            $300,907                                             $306,473                                $839,635           $553,844

                     Net cash used in investing activities as
                     presented above                              (1,365,074)                              (364,926)                               (3,938,723)                            (1,730,000)              (4,253,082)

                     Purchases, sales and maturities of
                     investments, net                                (13,240)                                   497                                  (10,303)                              (12,743)                  (3,199)

                    Negative free cash flow                                      $(839,586)                                          $(63,522)                                        $(3,642,553)                             $(903,108)      $(3,702,437)
                                                                        ===


             (2)    We define adjusted free cash flow as free cash flow (as defined above) excluding any purchases of real estate and business
                     acquisitions, net of cash and restricted cash acquired as presented below:

                    Free cash flow (as defined above)                            $(839,586)                                          $(63,522)                                        $(3,642,553)                             $(903,108)      $(3,702,437)

                     Less business acquisitions, net of cash
                     and restricted cash acquired                     830,993                                      -                                3,593,613                                830,993                 3,629,654

                    Less purchases of real estate                      27,082                                 14,700                                     6,841                                 41,782                    48,580

                     Adjusted free cash flow (adjusted negative
                     free cash flow)                                                $18,489                                           $(48,822)                                           $(42,099)                              $(30,333)         $(24,203)
                                                                        ===


                                                                                                                            EQUINIX, INC.

                                                                                                            Non-GAAP Measures and Other Supplemental Data

                                                                                                                           (in thousands)

                                                                                                                             (unaudited)


                                                                                      Three Months Ended                                                        Six Months Ended

                                                          June 30,                          March 31,                        June 30,                     June 30,                       June 30,
                                                                2018                                    2018                        2017                              2018                        2017
                                                                ----                                    ----                        ----                              ----                        ----

           Recurring revenues                                             $1,187,749                                             $1,150,629                                        $1,010,048                         $2,338,378 $1,908,488

           Non-recurring revenues                               74,194                                    65,248                                   56,373                              139,442                107,458
                                                              ------

           Revenues (1)                                      1,261,943                                 1,215,877                                1,066,421                            2,477,820              2,015,946
                                                           ---------


           Cash cost of revenues (2)                           421,733                                   395,522                                  344,469                              817,255                648,009
                                                             -------

           Cash gross profit (3)                               840,210                                   820,355                                  721,952                            1,660,565              1,367,937
                                                             -------


           Cash operating expenses (4) (7):

           Cash sales and marketing expenses (5)                91,468                                    98,069                                   89,616                              189,537                189,477

           Cash general and administrative expenses (6)        144,738                                   142,771                                  123,028                              287,509                241,578
                                                             -------

           Total cash operating expenses (4) (7)               236,206                                   240,840                                  212,644                              477,046                431,055
                                                             -------


           Adjusted EBITDA (8)                                              $604,004                                               $579,515                                          $509,308                         $1,183,519   $936,882
                                                                 ===


           Cash gross margins (9)                                  67%                                      67%                                     68%                                 67%                   68%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===


           Adjusted EBITDA margins (10)                            48%                                      48%                                     48%                                 48%                   46%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===


           Adjusted EBITDA flow-through rate (11)                  53%                                      94%                                     70%                                 55%                   54%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===


           FFO (12)                                                         $289,525                                               $290,755                                          $219,760                           $580,280   $420,626
                                                         ===


           AFFO (13) (14)                                                   $428,126                                               $414,576                                          $360,114                           $842,702   $664,224
                                                                 ===



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


           Americas Revenues:


           Colocation                                                       $433,895                                               $427,125                                          $374,764                           $861,020   $674,037

           Interconnection                                     131,720                                   129,253                                  116,248                              260,973                217,098

           Managed infrastructure                               18,292                                    18,535                                   17,005                               36,827                 32,066

           Other                                                 4,980                                     1,079                                    1,903                                6,059                  2,822
                                                               -----

           Recurring revenues                                  588,887                                   575,992                                  509,920                            1,164,879                926,023

           Non-recurring revenues                               29,388                                    26,635                                   23,688                               56,023                 44,032
                                                              ------

           Revenues                                                         $618,275                                               $602,627                                          $533,608                         $1,220,902   $970,055
                                                         ===



           EMEA Revenues:


           Colocation                                                       $293,518                                               $288,061                                          $259,684                           $581,579   $512,938

           Interconnection                                      33,969                                    34,977                                   23,655                               68,946                 46,006

           Managed infrastructure                               29,731                                    30,686                                   19,205                               60,417                 36,877

           Other                                                 2,364                                     1,766                                    2,037                                4,130                  5,367
                                                               -----

           Recurring revenues                                  359,582                                   355,490                                  304,581                              715,072                601,188

           Non-recurring revenues                               23,586                                    24,140                                   18,363                               47,726                 36,603
                                                              ------

           Revenues                                                         $383,168                                               $379,630                                          $322,944                           $762,798   $637,791
                                                         ===


           Asia-Pacific Revenues:


           Colocation                                                       $186,172                                               $166,198                                          $147,783                           $352,370   $286,778

           Interconnection                                      31,924                                    30,769                                   25,781                               62,693                 50,640

           Managed infrastructure                               21,184                                    22,180                                   21,983                               43,364                 43,859


           Recurring revenues                                  239,280                                   219,147                                  195,547                              458,427                381,277

           Non-recurring revenues                               21,220                                    14,473                                   14,322                               35,693                 26,823
                                                              ------

           Revenues                                                         $260,500                                               $233,620                                          $209,869                           $494,120   $408,100
                                                         ===


           Worldwide Revenues:


           Colocation                                                       $913,585                                               $881,384                                          $782,231                         $1,794,969 $1,473,753

           Interconnection                                     197,613                                   194,999                                  165,684                              392,612                313,744

           Managed infrastructure                               69,207                                    71,401                                   58,193                              140,608                112,802

           Other                                                 7,344                                     2,845                                    3,940                               10,189                  8,189
                                                               -----

           Recurring revenues                                1,187,749                                 1,150,629                                1,010,048                            2,338,378              1,908,488

           Non-recurring revenues                               74,194                                    65,248                                   56,373                              139,442                107,458

           Revenues                                                       $1,261,943                                             $1,215,877                                        $1,066,421                         $2,477,820 $2,015,946
                                                         ===



      (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                                                 $651,801                                               $622,430                                          $522,203                         $1,274,231   $991,164

            Depreciation, amortization and accretion
            expense                                          (225,461)                                (223,009)                               (174,556)                           (448,470)             (337,066)

           Stock-based compensation expense                    (4,607)                                  (3,899)                                 (3,178)                             (8,506)               (6,089)
                                                             -------

           Cash cost of revenues                                            $421,733                                               $395,522                                          $344,469                           $817,255   $648,009
                                                                 ===


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


           Americas cash cost of revenues                                   $180,057                                               $164,255                                          $148,589                           $344,312   $261,648

           EMEA cash cost of revenues                          155,085                                   152,814                                  124,485                              307,899                246,660

           Asia-Pacific cash cost of revenues                   86,591                                    78,453                                   71,395                              165,044                139,701


           Cash cost of revenues                                            $421,733                                               $395,522                                          $344,469                           $817,255   $648,009
                                                                 ===



      (3) We define cash gross profit as revenues less cash cost of revenues (as defined above).



      (4)  We define cash operating expense as selling, general, and administrative expense less depreciation, amortization, and stock-based
            compensation. We also refer to cash operating expense as cash selling, general and administrative expense or "cash SG&A".


           Selling, general, and administrative expense                     $364,691                                               $362,933                                          $332,921                           $727,624   $643,247

           Depreciation and amortization expense              (83,367)                                 (83,456)                                (77,830)                           (166,823)             (134,333)

           Stock-based compensation expense                   (45,118)                                 (38,637)                                (42,447)                            (83,755)              (77,859)
                                                            --------

           Cash operating expense                                           $236,206                                               $240,840                                          $212,644                           $477,046   $431,055
                                                                 ===



      (5)  We define cash sales and marketing expense as sales and marketing expense less depreciation, amortization and stock-based
            compensation as presented below:


           Sales and marketing expense                                      $154,202                                               $159,776                                          $141,566                           $313,978   $270,493

           Depreciation and amortization expense              (48,626)                                 (50,001)                                (38,524)                            (98,627)              (56,618)

           Stock-based compensation expense                   (14,108)                                 (11,706)                                (13,426)                            (25,814)              (24,398)
                                                            --------

           Cash sales and marketing expense                                  $91,468                                                $98,069                                           $89,616                           $189,537   $189,477
                                                                 ===



      (6)  We define cash general and administrative expense as general and administrative expense less depreciation, amortization and stock-
            based compensation as presented below:


           General and administrative expense                               $210,489                                               $203,157                                          $191,355                           $413,646   $372,754

           Depreciation and amortization expense              (34,741)                                 (33,455)                                (39,306)                            (68,196)              (77,715)

           Stock-based compensation expense                   (31,010)                                 (26,931)                                (29,021)                            (57,941)              (53,461)
                                                            --------

           Cash general and administrative expense                          $144,738                                               $142,771                                          $123,028                           $287,509   $241,578
                                                                 ===



      (7) The geographic split of our cash operating expense, or cash SG&A, as defined above, is presented below:


           Americas cash SG&A                                               $144,263                                               $146,823                                          $126,868                           $291,086   $251,637

           EMEA cash SG&A                                       57,268                                    60,638                                   56,837                              117,906                119,955

           Asia-Pacific cash SG&A                               34,675                                    33,379                                   28,939                               68,054                 59,463
                                                              ------

           Cash SG&A                                                        $236,206                                               $240,840                                          $212,644                           $477,046   $431,055
                                                         ===



      (8)  We define adjusted EBITDA as income from operations excluding depreciation, amortization, accretion, stock-based compensation,
            restructuring charges, impairment charges, acquisition costs and gain or loss on asset sales as presented below:


           Income from operations                                           $215,038                                               $225,875                                          $184,895                           $440,913   $352,108

            Depreciation, amortization and accretion
            expense                                            308,828                                   306,465                                  252,386                              615,293                471,399

           Stock-based compensation expense                     49,725                                    42,536                                   45,625                               92,261                 83,948

           Acquisition costs                                    30,413                                     4,639                                   26,402                               35,052                 29,427

           Adjusted EBITDA                                                  $604,004                                               $579,515                                          $509,308                         $1,183,519   $936,882
                                                                 ===


           The geographic split of our adjusted EBITDA is presented below:


           Americas income from operations                                   $87,711                                               $101,736                                           $75,039                           $189,447   $156,149

            Americas depreciation, amortization and
            accretion expense                                  160,337                                   158,026                                  124,905                              318,363                213,333

           Americas stock-based compensation expense            35,104                                    29,877                                   33,771                               64,981                 61,545

           Americas acquisition costs                           10,803                                     1,910                                   24,436                               12,713                 25,743

           Americas adjusted EBITDA                                         $293,955                                               $291,549                                          $258,151                           $585,504   $456,770
                                                                 ===



           EMEA income from operations                                       $73,046                                                $64,103                                           $54,927                           $137,149    $99,908

            EMEA depreciation, amortization and
            accretion expense                                   88,828                                    92,492                                   78,118                              181,320                154,924

           EMEA stock-based compensation expense                 8,403                                     7,139                                    6,611                               15,542                 12,660

           EMEA acquisition costs                                  538                                     2,444                                    1,966                                2,982                  3,684

           EMEA adjusted EBITDA                                             $170,815                                               $166,178                                          $141,622                           $336,993   $271,176
                                                                 ===


           Asia-Pacific income from operations                               $54,281                                                $60,036                                           $54,929                           $114,317    $96,051

            Asia-Pacific depreciation, amortization and
            accretion expense                                   59,663                                    55,947                                   49,363                              115,610                103,142

            Asia-Pacific stock-based compensation
            expense                                              6,218                                     5,520                                    5,243                               11,738                  9,743

           Asia-Pacific acquisition costs                       19,072                                       285                                        -                              19,357                      -

           Asia-Pacific adjusted EBITDA                                     $139,234                                               $121,788                                          $109,535                           $261,022   $208,936
                                                                 ===



      (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                             71%                                      73%                                     72%                                 72%                   73%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===

           EMEA cash gross margins                                 60%                                      60%                                     61%                                 60%                   61%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===

           Asia-Pacific cash gross margins                         67%                                      66%                                     66%                                 67%                   66%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===



     (10) We define adjusted EBITDA margins as adjusted EBITDA divided by revenues.


           Americas adjusted EBITDA margins                        48%                                      48%                                     48%                                 48%                   47%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===

           EMEA adjusted EBITDA margins                            45%                                      44%                                     44%                                 44%                   43%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===

           Asia-Pacific adjusted EBITDA margins                    53%                                      52%                                     52%                                 53%                   51%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===



     (11)  We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as
            follows:


           Adjusted EBITDA - current period                                 $604,004                                               $579,515                                          $509,308                         $1,183,519   $936,882

           Less adjusted EBITDA - prior period               (579,515)                                (564,840)                               (427,574)                         (1,115,159)              (856,533)
                                                           ---------

           Adjusted EBITDA growth                                            $24,489                                                $14,675                                           $81,734                            $68,360    $80,349
                                                                 ===



           Revenues - current period                                      $1,261,943                                             $1,215,877                                        $1,066,421                         $2,477,820 $2,015,946

           Less revenues - prior period                    (1,215,877)                               (1,200,221)                                (949,525)                         (2,352,482)            (1,867,323)
                                                         -----------

           Revenue growth                                                    $46,066                                                $15,656                                          $116,896                           $125,338   $148,623


           Adjusted EBITDA flow-through rate                       53%                                      94%                                     70%                                 55%                   54%
                                                                 ===            ===                                     ===                                 ===                                     ===                  ===



     (12)  FFO is defined as net income or loss, excluding gain or loss 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                                                        $67,618                                                $62,894                                           $45,805                           $130,512    $87,867

           Adjustments:

           Real estate depreciation                            221,029                                   222,855                                  175,387                              443,884                334,801

            (Gain) loss on disposition of real estate
            property                                               878                                     5,006                                  (1,460)                               5,884                (2,098)

            Adjustments for FFO from unconsolidated
            joint ventures                                           -                                        -                                      28                                    -                    56
                                                                 ---

           FFO                                                              $289,525                                               $290,755                                          $219,760                           $580,280   $420,626
                                                         ===



     (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, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums,
            gain or loss on debt extinguishment, an income tax expense adjustment, net income or loss 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                                                              $289,525                                               $290,755                                          $219,760                           $580,280   $420,626

           Adjustments:

           Installation revenue adjustment                         840                                     2,159                                    6,939                                2,999                 11,614

           Straight-line rent expense adjustment                 1,664                                     2,301                                    1,015                                3,965                  3,424

            Amortization of deferred financing costs and
            debt discounts and premiums                          3,362                                     4,099                                    4,130                                7,461                 15,710

           Contract cost adjustment                            (4,384)                                  (3,355)                                       -                             (7,739)                     -

           Stock-based compensation expense                     49,725                                    42,536                                   45,625                               92,261                 83,948

           Non-real estate depreciation expense                 35,267                                    34,097                                   29,241                               69,364                 57,816

           Amortization expense                                 51,035                                    50,616                                   50,158                              101,651                 79,175

           Accretion expense (adjustment)                        1,497                                   (1,103)                                 (2,400)                                 394                  (393)

           Recurring capital expenditures                     (42,206)                                 (35,231)                                (37,869)                            (77,437)              (60,541)

           Loss on debt extinguishment                          19,215                                    21,491                                   16,444                               40,706                 19,947

           Acquisition costs                                    30,413                                     4,639                                   26,402                               35,052                 29,427

           Income tax expense adjustment                       (7,827)                                    1,572                                      674                              (6,255)                 3,483

            Adjustments for AFFO from unconsolidated
            joint ventures                                           -                                        -                                     (5)                                   -                  (12)
                                                                 ---

           AFFO                                                             $428,126                                               $414,576                                          $360,114                           $842,702   $664,224
                                                         ===



     (14)  Following is how we reconcile from adjusted EBITDA to AFFO:


           Adjusted EBITDA                                                  $604,004                                               $579,515                                          $509,308                         $1,183,519   $936,882

           Adjustments:

           Interest expense, net of interest income          (130,715)                                (121,667)                               (114,605)                           (252,382)             (223,197)

            Amortization of deferred financing costs and
            debt discounts and premiums                          3,362                                     4,099                                    4,130                                7,461                 15,710

           Income tax expense                                  (6,356)                                 (16,759)                                 (9,325)                            (23,115)              (22,718)

           Income tax expense adjustment                       (7,827)                                    1,572                                      674                              (6,255)                 3,483

           Straight-line rent expense adjustment                 1,664                                     2,301                                    1,015                                3,965                  3,424

           Contract cost adjustment                            (4,384)                                  (3,355)                                       -                             (7,739)                     -

           Installation revenue adjustment                         840                                     2,159                                    6,939                                2,999                 11,614

           Recurring capital expenditures                     (42,206)                                 (35,231)                                (37,869)                            (77,437)              (60,541)

           Other income (expense)                                8,866                                   (3,064)                                   1,284                                5,802                  1,621

            (Gain) loss on disposition of real estate
            property                                               878                                     5,006                                  (1,460)                               5,884                (2,098)

            Adjustments for unconsolidated JVs' and non-
            controlling interests                                    -                                        -                                      23                                    -                    44

           AFFO                                                             $428,126                                               $414,576                                          $360,114                           $842,702   $664,224
                                                         ===

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SOURCE Equinix, Inc.