UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2020~~2021



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-31293

EQUINIX, INC.

(Exact name of registrant as specified in its charter)



~~Delaware~~

	~~77-0487526~~
Delaware		77-0487526
(State of incorporation)		(I.R.S. Employer Identification No.)

One Lagoon Drive,, Redwood City,, California94065

(Address of principal executive offices, including ZIP code)

(~~650~~) (650) 598-6000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, $0.001

EQIX

The ~~NASDAQ~~Nasdaq Stock Market LLC

0.250% Senior Notes due 2027

The Nasdaq Stock Market LLC

1.000% Senior Notes due 2033

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer		☒			Accelerated filer		☐

~~Large accelerated filer~~		☒	~~Accelerated filer~~	☐

Non-accelerated filer	☐		Smaller reporting company			☐

					Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant's Common Stock as of ~~May 6, 2020~~April 29, 2021 was ~~85,927,044.~~

89,579,906.

Table of Contents

EQUINIX, INC.

INDEX


				Page No.

			Summary of Risk Factors	4

Part I - Financial Information

Item 1.			~~Page~~ ~~No.~~
~~Part I - Financial Information~~

~~Item 1.~~	Condensed Consolidated Financial Statements (unaudited):	46

			Condensed Consolidated Balance Sheets as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020	46

			Condensed Consolidated Statements of Operations for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	57

			Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	68

			Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	79

			Notes to Condensed Consolidated Financial Statements	810

Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations	3336

Item 3.			Quantitative and Qualitative Disclosures About Market Risk	5155

Item 4.			Controls and Procedures	5256

Part II - Other Information

Item 1.			Legal Proceedings	5457

Item 1A.			Risk Factors	5457

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	7884

Item 3.			Defaults Upon Senior Securities	7884

Item 4.			Mine Safety Disclosure	7884

Item 5.			Other Information	7884

Item 6.			Exhibits	7985

Signatures				8591

Index to Exhibits				8692

Table of Contents

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties that make an investment in our securities speculative or risky, any one of which could materially adversely affect our results of operations, financial condition or business. These risks include, but are not limited to, those listed below. This list is not complete, and should be read together with the section titled “Risk Factors” in this Quarterly Report on Form 10-Q, as well as the other information in this Quarterly Report on Form 10-Q and the other filings that we make with the U.S. Securities and Exchange Commission (the “SEC”).

Risks Related to Our Business and Our Operations

•The ongoing COVID-19 pandemic could have a negative effect on our business, results of operations and financial condition.

•We experienced an information technology security breach in the past and may be vulnerable to future security breaches, which could disrupt our operations and have a material adverse effect on our business, results of operation and financial condition.

•Terrorist activity, or other acts of violence, including violence stemming from the current climate of political and economic uncertainty, could adversely impact our business.

•Our offerings have a long sales cycle that may harm our revenue and results of operations.

•Any failure of our physical infrastructure or negative impact on our ability to meet our obligations to our customers or damage to customer infrastructure within our IBX data centers, could lead to significant costs and disruptions that could reduce our revenue and harm our business reputation and financial condition.

•We are currently making significant investments in our back-office information technology systems and processes. Difficulties from or disruptions to these efforts may interrupt our normal operations and adversely affect our business and results of operations.

•The level of insurance coverage that we purchase may prove to be inadequate.

•The use of high power density equipment may limit our ability to fully utilize our older IBX data centers.

•If we are unable to implement our evolving organizational structure or if we are unable to recruit or retain key executives and qualified personnel, our business could be harmed.

•We may not be able to compete successfully against current and future competitors.

•If we cannot continue to develop, acquire, market and provide new offerings or enhancements to existing offerings that meet customer requirements and differentiate us from our competitors, our results of operations could suffer.

•Our results of operations may fluctuate.

•Our days sales outstanding ("DSO") may be negatively impacted by process and system upgrades and acquisitions.

•We may incur goodwill and other intangible asset impairment charges, or impairment charges to our property, plant and equipment, which could result in a significant reduction to our earnings.

•We have incurred substantial losses in the past and may incur additional losses in the future.

•The failure to obtain favorable terms when we renew our IBX data center leases, or the failure to renew such leases, could harm our business and results of operations.

•We depend on a number of third parties to provide internet connectivity to our IBX data centers; if connectivity is interrupted or terminated, our results of operations and cash flow could be materially and adversely affected.

•We have government customers, which subjects us to risks including early termination, audits, investigations, sanctions and penalties.

•Because we depend on the development and growth of a balanced customer base, including key magnet customers, failure to attract, grow and retain this base of customers could harm our business and results of operations.

•Industry consolidation may have a negative impact on our business model.

•Our business could be harmed by prolonged power outages, shortages or capacity constraints.

Risks Related to Our Expansion Plans

•Our construction of additional new IBX data centers or IBX data center expansions could involve significant risks to our business.

•Acquisitions present many risks, and we may not realize the financial or strategic goals that were contemplated at the time of any transaction.

•The anticipated benefits of our joint ventures with GIC Private Limited, Singapore’s sovereign wealth fund (“GIC”), may not be fully realized or take longer to realize than expected.

•Joint venture investments, such as our joint ventures with GIC, could expose us to risks and liabilities in connection with the formation of the new joint ventures, the operation of such joint ventures without sole decision-making authority, and our reliance on joint venture partners who may have economic and business interests that are inconsistent with our business interests.

•If we cannot effectively manage our international operations, and successfully implement our international expansion plans, or comply with evolving laws and regulations, our revenues may not increase, and our business and results of operations would be harmed.

•We are continuing to invest in our expansion efforts but may not have sufficient customer demand in the future to realize expected returns on these investments.

Risks Related to Our Capital Needs and Capital Strategy

•Our substantial debt could adversely affect our cash flows and limit our flexibility to raise additional capital.

•The phase-out of the London Interbank Offered Rate (“LIBOR”), and uncertainty as to its replacement, may adversely affect our business.

•Sales or issuances of shares of our common stock may adversely affect the market price of our common stock.

•If we are not able to generate sufficient operating cash flows or obtain external financing, our ability to fund incremental expansion plans may be limited.

•Fluctuations in foreign currency exchange rates in the markets in which we operate internationally could harm our results of operations.

•Our derivative transactions expose us to counterparty credit risk.

Risks Related to Environmental Laws and Climate Change Impacts

•Environmental regulations may impose upon us new or unexpected costs.

•Our business may be adversely affected by climate change and responses to it.

Risks Related to Certain Regulations and Laws, Including Tax Laws

•Changes in U.S. or foreign tax laws, regulations, or interpretations thereof, including changes to tax rates, may adversely affect our financial statements and cash taxes.

•Government regulation or failure to comply with laws and regulations may adversely affect our business.

Risks Related to Our Taxation as a REIT

•We have a number of risks related to our taxation as a REIT, including the risk that we may not be able to maintain our qualification as a REIT which could expose us to substantial corporate income tax and have a materially adverse effect on our business, financial condition, and results of operations.

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

EQUINIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	March 31, 2020			December 31, 2019				March 31, 2021		December 31, 2020
	(Unaudited)							(Unaudited)
Assets							Assets
Current assets:							Current assets:
Cash and cash equivalents	$	1,171,339		$	1,869,577		Cash and cash equivalents	$	1,752,990	$	1,604,869
Short-term investments	25,833			10,362			Short-term investments	4,229		4,532
Accounts receivable, net of allowance for doubtful accounts of $14,793 and $13,026	687,153			689,134
Accounts receivable, net of allowance of $10,641 and $10,677							Accounts receivable, net of allowance of $10,641 and $10,677	684,642		676,738
Other current assets	435,784			303,543			Other current assets	407,856		323,016

Total current assets	2,320,109			2,872,616			Total current assets	2,849,717		2,609,155

Property, plant and equipment, net	12,177,044			12,152,597			Property, plant and equipment, net	14,768,661		14,503,084
Operating lease right-of-use assets	1,414,711			1,475,367			Operating lease right-of-use assets	1,405,835		1,475,057
Goodwill	4,927,459			4,781,858			Goodwill	5,387,601		5,472,553
Intangible assets, net	2,108,539			2,102,389			Intangible assets, net	2,092,253		2,170,945
Other assets	642,836			580,788			Other assets	812,923		776,047
Total assets	$	23,590,698		$	23,965,615		Total assets	$	27,316,990	$	27,006,841
Liabilities and Stockholders' Equity							Liabilities and Stockholders' Equity
Current liabilities:							Current liabilities:
Accounts payable and accrued expenses	$	717,574		$	760,718		Accounts payable and accrued expenses	$	742,300	$	844,862
Accrued property, plant and equipment	317,144			301,535			Accrued property, plant and equipment	351,634		301,155
Current portion of operating lease liabilities	140,596			145,606			Current portion of operating lease liabilities	147,164		154,207
Current portion of finance lease liabilities	89,262			75,239			Current portion of finance lease liabilities	149,388		137,683
Current portion of mortgage and loans payable	74,473			77,603			Current portion of mortgage and loans payable	79,902		82,289
Current portion of senior notes	300,401			643,224			Current portion of senior notes	150,003		150,186
Other current liabilities	199,023			153,938			Other current liabilities	213,189		354,368

Total current liabilities	1,838,473			2,157,863			Total current liabilities	1,833,580		2,024,750
Operating lease liabilities, less current portion	1,261,964			1,315,656			Operating lease liabilities, less current portion	1,252,566		1,308,627
Finance lease liabilities, less current portion	1,489,945			1,430,882			Finance lease liabilities, less current portion	1,912,507		1,784,816
Mortgage and loans payable, less current portion	1,469,195			1,289,434			Mortgage and loans payable, less current portion	1,229,073		1,287,254
Senior notes, less current portion	8,253,745			8,309,673			Senior notes, less current portion	9,685,361		9,018,277
Other liabilities	608,082			621,725			Other liabilities	827,228		948,999
Total liabilities	14,921,404			15,125,233			Total liabilities	16,740,315		16,372,723
Commitments and contingencies (Note 10)							Commitments and contingencies (Note 10)	0		0
Equinix stockholders' equity							Equinix stockholders' equity
Common stock, $0.001 par value per share: 300,000,000 shares authorized; 86,269,033 issued and 85,927,060 outstanding in 2020 and 85,700,953 issued and 85,308,386 outstanding in 2019	86			86
Common stock, $0.001 par value per share: 300,000,000 shares authorized; 89,890,922 issued and 89,574,510 outstanding in 2021 and 89,462,304 issued and 89,134,252 outstanding in 2020							Common stock, $0.001 par value per share: 300,000,000 shares authorized; 89,890,922 issued and 89,574,510 outstanding in 2021 and 89,462,304 issued and 89,134,252 outstanding in 2020	90		89
Additional paid-in capital	12,893,455			12,696,433			Additional paid-in capital	15,166,407		15,028,357
Treasury stock, at cost; 341,973 shares in 2020 and 392,567 shares in 2019	(127,298		)	(144,256		)
Treasury stock, at cost; 316,412 shares in 2021 and 328,052 shares in 2020							Treasury stock, at cost; 316,412 shares in 2021 and 328,052 shares in 2020	(117,786)		(122,118)
Accumulated dividends	(4,399,527		)	(4,168,469		)	Accumulated dividends	(5,379,693)		(5,119,274)
Accumulated other comprehensive loss	(1,206,669		)	(934,613		)	Accumulated other comprehensive loss	(1,008,848)		(913,368)
Retained earnings	1,509,317			1,391,425			Retained earnings	1,916,664		1,760,302
Total Equinix stockholders' equity	8,669,364			8,840,606			Total Equinix stockholders' equity	10,576,834		10,633,988
Non-controlling interests	(70		)	(224		)	Non-controlling interests	(159)		130
Total stockholders' equity	8,669,294			8,840,382			Total stockholders' equity	10,576,675		10,634,118
Total liabilities and stockholders' equity	$	23,590,698		$	23,965,615		Total liabilities and stockholders' equity	$	27,316,990	$	27,006,841

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

See accompanying notes to condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended
March 31,
2020 2019
(Unaudited)
Net income $ 118,957
$ 117,747
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment ("CTA") loss, net of tax effects of $0 and $(10) (413,792 ) (81,719 )
Net investment hedge CTA gain, net of tax effect of $0 and $10 144,946
76,850
Unrealized gain (loss) on cash flow hedges, net of tax effects of $(6,367) and $(2,741) (3,256 ) 8,224
Net actuarial gain (loss) on defined benefit plans, net of tax effects of $9 and $(1) 35
(11 )
Total other comprehensive income (loss), net of tax (272,067 ) 3,344
Comprehensive income (loss), net of tax (153,110 ) 121,091
Net (income) loss attributable to non-controlling interests (165 ) 331
Other comprehensive (income) loss attributable to non-controlling interests 11
(7 )
Comprehensive income (loss) attributable to Equinix $ (153,264 ) $ 121,415


	Three Months Ended March 31,
	2021		2020
	(Unaudited)
Net income	$	156,074	$	118,957
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment ("CTA") loss, net of tax effects of $0 and $0	(295,146)		(413,792)
Net investment hedge CTA gain, net of tax effect of $0 and $0	170,175		144,946

Unrealized gain (loss) on cash flow hedges, net of tax effects of $(7,892) and $(6,367)	29,478		(3,256)
Net actuarial gain on defined benefit plans, net of tax effects of $(5) and $9	12		35
Total other comprehensive loss, net of tax	(95,481)		(272,067)
Comprehensive income (loss), net of tax	60,593		(153,110)
Net (income) loss attributable to non-controlling interests	288		(165)
Other comprehensive loss attributable to non-controlling interests	1		11
Comprehensive income (loss) attributable to Equinix	$	60,882	$	(153,264)

See accompanying notes to condensed consolidated financial statements.

Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash

See accompanying notes to condensed consolidated financial statements.

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Equinix, Inc. ~~("Equinix"~~(collectively with its consolidated subsidiaries referred to as "Equinix," the "Company," "we," "our," or ~~the "Company"~~"us") and reflect all adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary to fairly state the financial position and the results of operations for the interim periods presented. ~~The~~In the preparation of our condensed consolidated financial statements, we have considered potential impacts of the COVID-19 pandemic on our critical and significant accounting estimates. There was no significant impact to our condensed consolidated financial statements. We will continue to evaluate the nature and extent of the potential impacts to our business and our condensed consolidated financial statements.

Our condensed consolidated balance sheet data as of December 31, ~~2019~~2020 has been derived from audited consolidated financial statements as of that date. ~~The~~Our condensed consolidated financial statements have been prepared in accordance with the regulations of the Securities and Exchange Commission ("SEC"), but omit certain information and footnote disclosure necessary to present the statements in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). For further information, refer to the Consolidated Financial Statements and Notes thereto included in ~~Equinix's~~our Form 10-K as filed with the SEC on February ~~21, 2020.~~19, 2021. Results for the interim periods are not necessarily indicative of results for the entire fiscal year.

The accompanying unaudited condensed consolidated financial statements include ~~the accounts of Equinix and its subsidiaries, including the~~our acquisitions of 12 data center sites across Canada from BCE Inc. ("Bell") from October 1, 2020 and 1 additional data center site from November 2, 2020, Packet Host, Inc. (“Packet”) from March 2, 2020, ~~three~~and 3 data centers in Mexico acquired from Axtel S.A.B. de C.V ("Axtel") from January 8, ~~2020, and Switch Datacenters' AMS1 data center business in Amsterdam, Netherlands from April 18, 2019.~~2020. All intercompany accounts and transactions have been eliminated in consolidation.

~~The Company~~We elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes ~~("REIT")~~ beginning with ~~its~~our 2015 taxable year. As a result, ~~the Company~~we may deduct the distributions made to ~~its~~our stockholders from taxable income generated by ~~the Company~~our REIT and ~~its~~ qualified REIT subsidiaries ("QRSs"). ~~The Company's~~Our dividends paid deduction generally eliminates the U.S. federal taxable income of ~~the Company~~our REIT and ~~its~~ QRSs, resulting in no U.S. federal income tax due. However, ~~the Company's~~our domestic taxable REIT subsidiaries ("TRSs") are subject to U.S. corporate income taxes on any taxable income generated by them. In addition, ~~the~~our foreign operations ~~of the Company~~ are subject to local income taxes regardless of whether the foreign operations are operated as QRSs or TRSs.

~~The Company provides~~We provide for income taxes during interim periods based on the estimated effective tax rate for the year. The effective tax rate is subject to change in the future due to various factors such as ~~the~~our operating performance, ~~of the Company,~~ tax law changes and future business acquisitions.

~~The Company's~~Our effective tax rates were ~~20.2%~~17.3% and ~~26.6%~~20.2% for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

~~Coronavirus (COVID-19) Update~~

In December 2019, a novel strain of coronavirus, referred to as Coronavirus disease 2019, or COVID-19, emerged. On February 29, 2020, the World Health Organization (“WHO”) raised the COVID-19 threat from high to very high, and on March 11, 2020, the WHO characterized COVID-19 as a global pandemic. The extent to which the Company’s operations will be impacted by COVID-19 will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact, among other things. As of the date of issuance of the financial statements, the Company is not aware of any specific event or circumstance that would require it to update its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and will be recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from these estimates.

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

Recent Accounting Pronouncements

Accounting Standards Not Yet Adopted

In ~~December 2019,~~August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06: Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock and modifies the disclosure requirement for the convertible instruments. Additionally, this ASU improves the consistency of EPS calculations by eliminating the use of the treasury stock method to calculate diluted EPS for convertible instruments and clarifies certain areas under the current EPS guidance. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted at the beginning of the fiscal year after December 15, 2020. We are currently evaluating the extent of the impact of this ASU, but do not expect the adoption of this standard to have a significant impact on our condensed consolidated financial statements.

Accounting Standards Adopted

In December 2019, FASB issued ASU 2019-12, Income Taxes ("Topic 740"): Simplifying the Accounting for Income Taxes. The ASU simplifies accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The ASU also improves consistent application of and simplifies generally accepted accounting principles ("GAAP") for other areas of Topic 740 by clarifying and amending existing guidance. ~~For public entities, the~~The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted including adoption in any interim period for periods for which financial statements have not yet been issued. ~~The Company is currently evaluating the extent of the impact that~~On January 1, 2021, we adopted this ASU on a prospective basis and the adoption of this standard ~~will~~did not have an impact on ~~its~~our condensed consolidated financial statements.

~~Accounting Standards Adopted~~

In March 2020, FASB issued ASU 2020-04, Reference Rate Reform ("Topic 848"): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ~~The~~In addition, FASB issued ASU 2021-01, Reference Rate Reform ("Topic 848"), which clarifies the scope of Topic 848. Collectively, the guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ~~The~~ ASU is2020-04 was effective for all entities as of March 12, 2020 through December 31, ~~2022. The Company~~2022 and ASU 2021-01 is effective upon issuance. We adopted ~~the ASU~~these ASUs upon ~~its issuance~~their respective issuances and there was no impact on ~~the Company's~~our condensed consolidated financial statements ~~for the three months ended March 31, 2020~~ as a result of adopting ~~this standard. The Company~~the guidance. We will evaluate ~~its~~our debt, derivative and lease contracts that ~~are~~may become eligible for modification relief and may apply the elections prospectively as needed.

In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses ("Topic 326"): Measurement of Credit Losses on Financial Instruments. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The ASU requires enhanced qualitative and quantitative disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization's portfolio. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company adopted this new ASU on January 1, 2020 using the modified retrospective approach and recorded a net decrease to retained earnings of $0.9 million and a corresponding increase to allowance for doubtful accounts. The adoption did not have any significant impact on other financial assets within the scope of ASC 326, such as contract asset.

~~Accounts Receivable~~

Accounts receivables are recorded at invoice amount and are generally due in less than one year. Allowance for doubtful accounts are estimated losses resulting from the inability of customers making payments. An estimate of uncollectible amounts is made based on historical bad debts, age of customer receivable balances, customers' financial conditions and current economic trends. As of March 31, 2020, our allowance for doubtful accounts considered the current and potential future impacts caused by the COVID-19 pandemic based on information available to such date.

~~Accounts receivable, net, consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands):~~

March 31,
2020 December 31,
2019
Accounts receivable $ 701,946
$ 702,160
Allowance for doubtful accounts (14,793 ) (13,026 )
Accounts receivable, net $ 687,153
$ 689,134

~~Table of Contents~~

~~EQUINIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

~~The following table summarizes the activity of the Company's allowance for doubtful accounts (in thousands):~~

Balance at December 31, 2019 $ 13,026
Adjustments due to adoption of ASU 2016-13 900
Provision for allowance for doubtful accounts 3,934
Net write-offs and recoveries (2,688 )
Impact of foreign currency exchange and others (379 )
Balance at March 31, 2020 $ 14,793

The following table summarizes the opening and closing balances of ~~the Company's~~our accounts receivable, net; contract asset, current; contract asset, non-current; deferred revenue, current; and deferred revenue, non-current (in thousands):

(1) The net change in our allowance for credit losses was insignificant during the three months ended March 31, 2021.

Accounts receivable, net Contract asset, current Contract asset, non-current Deferred revenue, current Deferred revenue, non-current
Beginning balances as of January 1, 2020 $ 689,134
$ 10,033
$ 31,521
$ 76,193
$ 46,555
Closing balances as of March 31, 2020 687,153
10,457
33,619
79,575
48,107
Increase/(decrease) $ (1,981 ) $ 424
$ 2,098
$ 3,382
$ 1,552

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The difference between the opening and closing balances of ~~the Company's~~our accounts receivable, net, contract assets and deferred revenues primarily results from revenue growth and the timing difference between the satisfaction of ~~the Company's~~our performance obligation and the customer's ~~payment, as well as business combinations closed during the three months ended March 31, 2020.~~payment. The ~~amounts~~amount of revenue recognized during the three months ended March 31, ~~2020~~2021 from the opening deferred revenue balance as of January 1, ~~2020~~2021 was ~~$38.1~~$36.4 million.

Remaining performance obligations

As of March 31, ~~2020,~~2021, approximately ~~$7.2~~$8.2 billion of total revenues, including deferred installation revenues, are expected to be recognized in future periods, the majority of which will be recognized over the next 24 months. While initial contract terms vary in length, substantially all contracts thereafter automatically renew in one-year increments. Included in the remaining performance obligations is either 1) remaining performance obligations under the initial contract terms or 2) remaining performance obligations related to contracts in the renewal period once the initial terms have lapsed. The remaining performance obligations do not include variable consideration related to unsatisfied performance obligations such as the usage of metered power, service fees from xScale^TM data centers, which are calculated based on future events or actual costs incurred in the future, or any contracts that could be terminated without any significant penalties such as the majority of interconnection revenues. The remaining performance obligations above include revenues to be recognized in the future related to arrangements where ~~the Company is~~we are considered the lessor.

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~~EQUINIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

The following table sets forth the computation of basic and diluted earnings per share ("EPS") for the periods presented (in thousands, except per share amounts):

Three Months Ended
March 31,
2020 2019
Net income $ 118,957
$ 117,747
Net (income) loss attributable to non-controlling interests (165 ) 331
Net income attributable to Equinix $ 118,792
$ 118,078

Weighted-average shares used to calculate basic EPS 85,551
81,814
Effect of dilutive securities:
Employee equity awards 593
276
Weighted-average shares used to calculate diluted EPS 86,144
82,090

EPS attributable to Equinix:
Basic EPS $ 1.39
$ 1.44
Diluted EPS $ 1.38
$ 1.44


	Three Months Ended March 31,
	2021		2020
Net income	$	156,074	$	118,957
Net (income) loss attributable to non-controlling interests	288		(165)
Net income attributable to Equinix	$	156,362	$	118,792

Weighted-average shares used to calculate basic EPS	89,330		85,551
Effect of dilutive securities:
Employee equity awards	512		593
Weighted-average shares used to calculate diluted EPS	89,842		86,144

EPS attributable to Equinix:
Basic EPS	$	1.75	$	1.39
Diluted EPS	$	1.74	$	1.38

~~The Company has~~We have excluded common stock related to employee equity awards in the diluted EPS calculation above of approximately ~~45,000~~148,000 shares and ~~469,000~~45,000 shares for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively, because their effect would be anti-dilutive.

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EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Acquisition of Bell Data Centers (the "Bell Acquisition")

On October 1, 2020, we completed the acquisition of 12 data center sites across Canada from Bell, with 1 additional data center in Ottawa Canada acquired on November 2, 2020, for a total combined purchase consideration of approximately C$934.3 million, or $704.0 million at the exchange rates in effect on those dates. The acquisition supports our ongoing expansion to meet customer demand in Canada.

Acquisition of Packet (the "Packet Acquisition")

On March 2, 2020, ~~the Company~~we acquired all outstanding shares and equity awards of Packet Host, Inc. (“Packet”), a leading bare metal automation platform for a total purchase consideration of approximately $290.3 million in cash. In addition, ~~the Company~~we paid $16.1 million in cash to accelerate the vesting of unvested Packet equity awards for certain Packet employees, which was recorded as stock-based compensation expense during the three months ended March 31, 2020. In connection with the acquisition, ~~the Company~~we also issued restricted stock awards with an aggregated fair value of $30.2 million and a three-year vesting period, which will be recognized as stock-based compensation costs over the vesting period. The acquisition, combined with ~~the Company’s o~~Equinix Metal~~wn organic bare metal service in development,~~TM, is expected to accelerate ~~Equinix's~~our strategy to help enterprises deploy hybrid multicloud architectures on ~~Equinix's~~our data center platform.

Acquisition of data centers from Axtel (the "Axtel Acquisition")

On January 8, 2020, ~~the Company~~we completed the acquisition of ~~three~~3 data centers in Mexico from Axtel S.A.B. de C.V. (“Axtel”) for a total purchase consideration of approximately $189.0 million, including $175.0 million in cash and $14.0 million ~~the Company~~we paid to the seller for recoverable value-added taxes ("VAT") incurred prior to the acquisition, which related to a corresponding VAT receivable acquired upon acquisition. The acquisition supports ~~the Company’s~~our ongoing expansion to meet customer demand in ~~the~~our Americas region.

~~Both~~Purchase price allocation

Each of these acquisitions constitute a business under the accounting standard for business combinations and, therefore, were accounted for as business combinations using the acquisition method of accounting. Under the acquisition method of accounting, the total purchase price is allocated to the assets acquired and liabilities assumed measured at fair value on the date of acquisition.

As of March 31, ~~2020, the Company had not completed~~2021, we continued to review the detailed valuation analysis to derive the fair value of assets acquired and liabilities assumed from the Bell Acquisition, including property, plant and equipment, intangible assets and the related tax impacts; therefore, the purchase price allocation is based on provisional estimates and subject to continuing management analysis.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

A summary of the ~~preliminary~~ allocation of total purchase consideration is presented as follows (in thousands):


	Bell (1)		Packet		Axtel
	Provisional		Final
Cash and cash equivalents	$	0	$	1,068	$	0
Accounts receivable	0		5,098		0
Other current assets	696		299		14,048
Property, plant and equipment	538,717		27,945		76,407
Operating lease right-of-use assets	14,359		1,519		1,646
Intangible assets	75,857		58,500		22,750
Goodwill	172,387		230,620		78,902
Deferred tax and other assets	722		138		0
Total assets acquired	802,738		325,187		193,753
Accounts payable and accrued liabilities	(895)		(1,275)		(238)
Other current liabilities	0		(860)		0
Operating lease liabilities	(13,340)		(1,519)		(1,586)
Finance lease liabilities	(80,026)		(27,945)		0
Deferred tax and other liabilities	(4,495)		(3,290)		(2,911)
Net assets acquired	$	703,982	$	290,298	$	189,018

Packet Axtel
Cash and cash equivalents $ 1,029
$ —
Accounts receivable 5,148
—
Other current assets 108
14,048
Property, plant and equipment 28,980
76,407
Operating lease right-of-use assets 1,445
1,646
Intangible assets 68,600
22,750
Goodwill 223,117
78,902
Other assets 138
—
Total assets acquired 328,565
193,753
Accounts payable and accrued liabilities (987 ) (238 )
Other current liabilities (826 ) —
Operating lease liabilities (1,445 ) (1,586 )
Finance lease liabilities (28,980 ) —
Other liabilities —
(162 )
Deferred tax liabilities (6,029 ) (2,749 )
Net assets acquired $ 290,298
$ 189,018

(1)For the Bell Acquisition, the purchase price allocation adjustments since the provisional amounts reported as of December 31, 2020 were not significant.

Property, plant and equipment - The fair values of property, plant and equipment acquired from these 3 acquisitions were estimated by applying the cost approach, with the exception of land, which we estimated by applying the market approach. The key assumptions of the cost approach include replacement cost new, physical deterioration, functional and economic obsolescence, economic useful life, remaining useful life, age and effective age.

Intangible assets - The following table presents certain information on the acquired intangible assets (in thousands):


Intangible Assets	Fair Value		Estimated Useful Lives (Years)	Weighted-average Estimated Useful Lives (Years)
Bell:
Customer relationships	$	75,857	15.0	15.0
Packet:
Trade names	1,300		3.0	3.0
Existing technology	5,100		3.0	3.0
Customer relationships	52,100		10.0	10.0
Axtel:
Customer relationships	22,750		15.0	15.0

The fair values of customer relationships acquired from these acquisitions were estimated from applying an income approach, by calculating the present value of estimated future operating cash flows generated from existing customers less costs to realize the revenue. We applied a discount rate of 8.0% for Bell, 8.0% for Packet and 13.3% for Axtel, which reflects the nature of the assets as they relate to the risk and uncertainty of the estimated future operating cash flows, as well as the risk of the country within which the acquired business operates.

Intangible Assets Fair Value Estimated Useful Lives (Years) Weighted-average Estimated Useful Lives (Years)
Packet:
Trade names $ 1,600
3.0 3.0
Existing technology 5,100
3.0 3.0
Customer relationships 61,900
10.0 10.0
Axtel:
Customer relationships 22,750
15.0 15.0

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The fair value of the Packet trade name was estimated using the relief from royalty method under the income approach. ~~The Company~~We applied a relief from royalty rate of 1.0% and a discount rate of 8.0%. The fair value of existing technology was estimated under the cost approach by projecting the cost to recreate a new asset with an equivalent utility of the existing technology. The key assumptions of the cost approach include total cost, time to recreate and functional obsolescence.

The fair value of customer relationships acquired from Packet and Axtel was estimated by applying an income approach, by calculating the present value of estimated future operating cash flows generated from existing customers less costs to realize the revenue. The Company applied a discount rate of 8.0% for Packet and 13.3% for Axtel, which reflects the nature of the assets as they relate to the risk and uncertainty of the estimated future operating cash flows, as well as the risk of the country within which the acquired business operates.

The fair value of property, plant and equipment was estimated by applying the cost approach, with the exception of land, which was estimated by applying the market approach. The key assumptions of the cost approach include replacement cost new, physical deterioration, functional and economic obsolescence, economic useful life, remaining useful life, age and effective age.

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. Goodwill is attributable to the workforce of the acquired business and the projected revenue increase expected to arise from future customers after these acquisitions. Goodwill from these acquisitions is attributable to our Americas region. Goodwill from the Bell Acquisition is expected to be deductible for local tax purposes while goodwill from the Packet and Axtel ~~acquisitions. Goodwill from both acquisitions is~~Acquisitions are not amortizable for local tax ~~purposes~~purposes.

Revenues and ~~is attributable to the Company's Americas region.~~net income and loss from operations

~~The Company incurred transaction costs of approximately $9.6 million during the~~ ~~three months ended March 31, 2020~~ ~~for both acquisitions combined.~~ The operating results of ~~both~~these 3 acquisitions are reported in ~~the~~our Americas region following the date of acquisition. During the three months ended March 31, ~~2020, the Company's~~2021, our results of operations include ~~$8.1~~$48.5 million of revenues and ~~$13.6~~$9.0 million of net loss from operations from the ~~combined~~Bell, Packet and Axtel Acquisitions.

Pending Acquisition of GPX India

On August 7, 2020, we entered into an agreement to purchase the India operations of ~~Packet and Axtel.~~GPX Global Systems, Inc. ("GPX India"), representing 2 data centers in Mumbai, India for approximately $161.0 million in an all-cash transaction (the “GPX India Acquisition”). The ~~net loss was primarily attributable~~GPX India Acquisition is expected to close in the ~~$16.1 million stock-based compensation expense incurred~~second quarter of 2021, subject to ~~accelerate the vesting of certain Packet employees’ unvested Packet equity awards at~~customary closing conditions including regulatory approval. Upon the close of the ~~Packet acquisition.~~acquisition, the operating results of the acquired business will be reported in our Asia-Pacific region.

5. Equity Method Investments

The following table summarizes the equity method investments (in thousands):


Investee	Ownership Percentage		March 31, 2021		December 31, 2020
EMEA Joint Venture with GIC	20	%	$	105,532	$	101,892
Asia-Pacific Joint Venture with GIC	20	%	50,347		43,432
Other	Various		16,517		17,747
Total			$	172,396	$	163,071

In 2019, ~~Acquisition~~

On April 18, 2019, the Company completed the acquisition of Switch Datacenters' AMS1 data center business in Amsterdam, Netherlands, for a cash purchase price of approximately €30.6 million or approximately $34.3 million, at the exchange rate in effect on April 18, 2019. As of September 30, 2019, the Company had completed the detailed valuation analysis to derive the fair value of assets acquired and liabilities assumed and updated the final allocation of purchase price.

~~On October 8, 2019, the Company~~we entered into a joint venture in the form of a limited liability partnership with GIC Private Limited, Singapore's sovereign wealth fund ("GIC") (the "EMEA Joint Venture"), to develop and operate ~~xScale~~^TMxScale™ data centers in Europe. xScale data centers are engineered to meet the technical and operational requirements and price points of core hyperscale workload deployments and also offer access to Equinix's comprehensive suite of interconnection and edge services.

Upon closing, GIC contributed €152.6 million in cash, or $167.4 million at the exchange rate in effect on October 8, 2019, for an 80% partnership interest in the EMEA Joint Venture. Equinix sold certain xScale data center facilities to theThe EMEA Joint Venture ~~in exchange for net cash proceeds~~is not a variable interest entity ("VIE") because its equity investors have the characteristics of ~~$351.8 million, as well as~~ a ~~20% partnership~~controlling financial interest ~~in the EMEA Joint Venture with a fair value of $41.9 million. The Company accounts for~~and it is sufficiently capitalized to sustain its investments in the EMEA Joint Venture using the equity method of accounting, whereby the investments were recorded initially at fair value, which equals to the cost of the Company's initial equity contribution, and subsequently adjusted for cash contributions and the Company's share of the income and losses of the investees.

operations, requiring additional funding from its partners only when expanding operations. During the three months ended March 31, ~~2020, the Company~~2021, we made an additional equity ~~contribution~~contributions of ~~$5.1~~$7.1 million to the EMEA Joint Venture. As of March 31, 2020 and December 31, 2019, the Company's equity method investments were $72.7 million and $59.7 million, respectively, and were included within other assets on the consolidated balance sheet. The Company'sOur share of ~~the~~ income and losses of ~~the~~ equity method investments from this joint venture, which is attributable to our EMEA region, was ~~not significant~~insignificant for the three months ended March 31, 2021 and 2020 and was included in other income on the condensed consolidated statement of operations.

~~As part of the sale of its xScale data center facilities~~We committed to make future equity contributions to the EMEA Joint Venture for funding its future development. As of March 31, 2021, we had future equity contribution commitments of $24.9 million.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Variable Interest Entity

Asia-Pacific Joint Venture

On December 17, 2020, we entered into a second joint venture with GIC (the "Asia-Pacific Joint Venture") to develop and operate xScale™ data centers in Asia-Pacific. We provide certain management services to the ~~Company also received~~Asia-Pacific Joint Venture operations and earn fees based on those services and performance. The Asia-Pacific Joint Venture requires additional funding from its partners in order to sustain its current operations. As a ~~contingent consideration receivable upon completion~~result, it was determined to be a VIE. The power to direct the activities of ~~certain~~the Asia-Pacific Joint Venture that most significantly impact economic performance ~~milestones. The milestone payments are primarily contingent~~is shared equally by both partners. These activities include data center construction and operations, sales and marketing, financing, and real estate purchases or sales. Decisions about these activities require the consent of both GIC and us. We concluded that neither party is deemed to have predominant control over the Asia-Pacific Joint Venture and neither party is its primary beneficiary. Upon closing the Asia-Pacific Joint Venture, we recorded our initial 20% partnership interest at fair value of $42.6 million in total at the exchange rate in effect on December 17, 2020. During the three months ended March 31, 2021, we made additional equity contributions of $11.2 million to the Asia-Pacific Joint Venture. For the three months ended March 31, 2021, our share of income and losses of equity method investments from this joint venture, which was attributable to our Asia-Pacific region, was not significant and was included in other income on the ~~receipt~~condensed consolidated statement of ~~local regulatory approval~~operations.

In addition to the investment in the Asia-Pacific Joint Venture, we also had $14.2 million of receivables from the Asia-Pacific Joint Venture relating to purchase price adjustments on the sale of data center assets as well as amounts due under commercial service agreements, which were presented within accounts receivable, net on the condensed consolidated balance sheet as of March 31, 2021. During the three months ended March 31, 2021, the total revenue recorded from these services was insignificant.

Concurrent with the closing of the Asia-Pacific Joint Venture, the Asia-Pacific Joint Venture entered into a credit facility agreement and a bond agreement with a group of lenders for secured debt facilities of $305.2 million in total at the exchange rate in effect on December 31, 2020. The Asia-Pacific Joint Venture’s debt is secured by net assets of the Asia-Pacific Joint Venture and is without recourse to the partners. Under the Asia-Pacific Joint Venture agreement and pursuant to the credit facility and bond agreements, both our joint venture partner GIC and us are also required to make additional equity contributions proportionately upon occurrences such as an interest shortfall, cost-overrun or a capital shortfall needed to complete certain ~~sites.~~ construction phases.

We committed to make future equity contributions to the Asia-Pacific Joint Venture for funding its future development. As of March 31, 2021, we had future equity contribution commitments of $7.8 million.

Our maximum exposure to loss related to this unconsolidated VIE is limited to our equity investments in the VIE, outstanding receivables including any unpaid service and performance fees earned, and future funding commitments including those that may be required pursuant to the credit facility and bond agreements. As of March 31, 2021, our maximum exposure to loss related to the Asia-Pacific Joint Venture was approximately $72.3 million.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Related Party Transactions

In connection with the sale of the PA9 data center to the EMEA Joint Venture, we also have a commitment to the EMEA Joint Venture to complete a residual portion of the PA9 center for an estimated cost of $22.4 million in total, which is reimbursable in full upon completion. As March 31, 2021, we had contract assets, current of $17.1 million, in relation to the progress in completing this commitment.

The contingent consideration isfrom the sales of xScaleTM data centers to the EMEA Joint Venture are considered ~~a derivative~~derivatives and isare remeasured at ~~its~~ fair value each reporting period using inputs such as probabilities of payment, discount rates, foreign currency forward rates and projected payment dates. The fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 measurements. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the total fair value of the contingent consideration was ~~$38.9~~$42.4 million and ~~$40.1~~$44.2 million, respectively, which was included in other current assets ~~and other assets~~ on the condensed consolidated balance ~~sheet.~~sheets. Changes in the fair value of the contingent consideration were recorded in gain (loss) on asset sales on the condensed consolidated statement of operations.

We also have a sub-lease agreement with the EMEA Joint Venture to sub-lease a portion of London ("LD") 10-2 data center or former LD10 data center, for a total of 15 years. For the three months ended March 31, 2021 and 2020, we recorded approximately $4.5 million and $3.4 million, respectively, of rent expense for the LD10-2 data center. As of March 31, 2021 and December 31, 2020, we had a finance lease ROU assets of $128.2 million and $127.2 million, respectively and a finance lease ROU liability of $ 132.5 million and $130.8 million, respectively.

We provide various services to the EMEA Joint Venture through multiple agreements, including sales and marketing, development management, facilities management, and asset management services. As of March 31, 2021 and December 31, 2020, we had $7.7 million and $6.5 million, respectively, of total receivables from the EMEA Joint Ventures. For the three months ended March 31, 2021 and 2020, total revenues from these contracts were $7.2 million and $4.6 million, respectively. The transactions with the EMEA Joint Venture are generally considered to have been negotiated arm's length.

~~Table~~Additionally, we have an agreement to lease to the EMEA Joint Venture a portion of ~~Contents~~land for the Frankfurt 9 xScaleTM data center and a new building that is under construction on the land. As of March 31, 2021, the lease has not commenced yet and we recorded approximately $17.2 million of other liabilities in connection with the construction of the Frankfurt 9 xScaleTM data center.

~~EQUINIX, INC.~~As previously described above, we provide various services to the Asia-Pacific Joint Venture, including portfolio management, sales and marketing, development, and facilities management services, which give rise receivables. The transactions with the Asia-Pacific Joint Venture are generally considered to have been negotiated arm's length.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

6. Derivatives and Hedging Activities

Derivatives Designated as Hedging Instruments

Net Investment Hedges. ~~The Company is~~We are exposed to the impact of foreign exchange rate fluctuations on the value of investments in ~~its~~our foreign subsidiaries whose functional currencies are other than the U.S. Dollar. In order to mitigate the impact of foreign currency exchange rates, ~~the Company has~~we have entered into various foreign currency debt obligations, which are designated as hedges against ~~the Company's~~our net investments in foreign subsidiaries. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the total principal amounts of foreign currency debt obligations designated as net investment hedges were ~~$4,245.1 million~~$2.2 billion and ~~$4,078.7 million,~~$1.9 billion, respectively.

~~The Company~~We also ~~uses~~use cross-currency interest rate swaps to hedge a portion of ~~its~~our net investment in ~~its~~our European operations. As of both March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, U.S. Dollar to Euro cross-currency interest rate swap contracts with a total notional amount of ~~$750.0 million~~$3.3 billion were outstanding, with maturity dates infrom April 2022 ~~January 2024 and January 2025.~~to November 2026. At maturity of each outstanding contract, ~~the Company~~we will receive U.S. Dollars from and pay Euros to the contract counterparty. During the term of each contract, ~~the Company receives~~we receive interest payments in U.S. Dollars and ~~makes~~make interest payments in Euros based on a notional amount and fixed interest rates determined at contract inception.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

From time to time, we use foreign currency forward contracts to hedge against the effect of foreign exchange rate fluctuations on a portion of our net investment in our foreign subsidiaries. As of both March 31, 2021 and December 31, 2020, the total notional amount of foreign currency forward contracts designated as net investment hedges was $355.6 million.

The effect of net investment hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 was as follows (in thousands):

Amount of gain or (loss) recognized in accumulated other comprehensive income:
Three Months Ended
March 31,
2020 2019
Foreign currency debt $ 99,102
$ 63,914
Cross-currency interest rate swaps (included component) ⁽¹⁾
14,140
15,515
Cross-currency interest rate swaps (excluded component) ⁽²⁾
31,704
(2,590 )
Total $ 144,946
$ 76,839

Amount of gain or (loss) recognized in earnings:
Location of gain or (loss) Three Months Ended
March 31,
2020 2019
Cross-currency interest rate swaps (excluded component) ⁽²⁾
Interest expense $ 5,089
$ 4,163
Total $ 5,089
$ 4,163


Amount of gain or (loss) recognized in accumulated other comprehensive income:
		Three Months Ended March 31,
		2021		2020
Foreign currency debt		$	68,740	$	99,102
Cross-currency interest rate swaps (included component) (1)		141,228		14,140
Cross-currency interest rate swaps (excluded component) (2)		(40,529)		31,704
Foreign currency forward contracts (included component) (1)		708		0
Foreign currency forward contracts (excluded component) (3)		28		0
Total		$	170,175	$	144,946

Amount of gain or (loss) recognized in earnings:
	Location of gain or (loss)	Three Months Ended March 31,
		2021		2020
Cross-currency interest rate swaps (excluded component) (2)	Interest expense	$	10,049	$	5,089
Foreign currency forward contracts (excluded component) (3)	Interest expense	164		0
Total		$	10,213	$	5,089

⁽¹⁾

(1)Included component represents foreign exchange spot rates.

(2)Excluded component represents cross-currency basis spread and interest rates.

(3)Excluded component represents foreign currency forward points.

Cash Flow Hedges. ~~The Company hedges its~~We hedge our foreign currency translation exposure for forecasted revenues and expenses in ~~its~~our EMEA region between the U.S. Dollar and the British Pound, Euro, Swedish Krona and Swiss Franc. The foreign currency forward and option contracts that ~~the Company uses~~we use to hedge this exposure are designated as cash flow hedges. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the total notional amounts of these foreign exchange contracts were ~~$985.7~~$989.0 million and ~~$824.8~~$912.9 million, respectively.

As of March 31, ~~2020, the Company's~~2021, our foreign ~~exchange contracts~~currency cash flow hedge instruments had maturity dates ranging from April ~~2020~~2021 to ~~March~~December 2022 and ~~the Company~~we recorded a net ~~gain~~loss of ~~$33.0~~$18.9 million within accumulated other comprehensive income (loss) relating to these foreign exchange contracts that will be reclassified to revenues and expenses as they mature in the next 12 months. As of December 31, 2020, our foreign currency cash flow hedge instruments had maturity dates ranging from January 2021 to December 2022 and we recorded a net loss of $35.4 million within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to revenues and expenses as they mature in the next 12 months. ~~As of December 31, 2019, the Company's foreign exchange contracts had maturity dates ranging from January 2020~~

We enter into intercompany hedging instruments ("intercompany derivatives") with our wholly-owned subsidiaries in order to ~~December 2021 and the Company recorded a net gain of $16.3 million within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to~~hedge certain forecasted revenues and expenses ~~as they mature~~denominated in currencies other than the ~~next 12 months.~~

U.S. Dollar. Simultaneously, we enter into derivative contracts with unrelated third parties to externally hedge the net exposure created by such intercompany derivatives.

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EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

~~The Company hedges~~We hedge the interest rate exposure created by anticipated fixed rate debt issuances through the use of treasury locks and ~~forward starting swaps~~swap locks (collectively, interest rate locks), which are designated as cash flow hedges. As of March 31, ~~2020,~~2021, the total notional amount of interest rate locks outstanding was ~~approximately $1.2 billion.~~ $725.0 million. As of December 31, ~~2019, the Company~~2020, we had no0 interest rate ~~cash flow hedges~~locks outstanding. During the three months ended March 31, 2021, we had 0 settled interest rate locks. When interest rate locks are settled, any ~~accumulated~~ gain or loss from the transactions is deferred and included as a component of other comprehensive income (loss) ~~will be~~and is amortized to interest expense over the ~~life~~term of the ~~related debt.~~forecasted hedged transaction which is equivalent to the term of the interest rate locks. As of March 31, ~~2020~~2021 and December 31, ~~2019, the~~2020, we recorded a net loss of $3.6 million and ~~gain in~~$4.1 million, respectively, within accumulated other comprehensive income (loss) to be reclassified to interest expense in the next 12 months for interest rate ~~locks is not significant.~~locks.

The Company enters into intercompany hedging instruments ("intercompany derivatives") with wholly-owned subsidiaries of the Company in order to hedge certain forecasted revenues and expenses denominated in currencies other than the U.S. Dollar. Simultaneously, the Company enters into derivative contracts with unrelated third parties to externally hedge the net exposure created by such intercompany derivatives.

The effect of cash flow hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 was as follows (in thousands):

Amount of gain or (loss) recognized in accumulated other comprehensive income:
Three Months Ended
March 31,
2020 2019
Foreign currency forward and option contracts (included component) ⁽¹⁾
$ 28,025
$ 10,965
Foreign currency option contracts (excluded component) ⁽²⁾
1,318
—
Interest rate locks (26,232 ) —
Total $ 3,111
$ 10,965

Amount of gain or (loss) reclassified from accumulated other comprehensive income to income:
Three Months Ended
March 31,
Location of gain or (loss) 2020 2019
Foreign currency forward contracts Revenues $ 21,219
$ 9,861
Foreign currency forward contracts Costs and operating expenses (11,000 ) (5,329 )
Interest rate locks Interest Expense 168
—
Total $ 10,387
$ 4,532

Amount of gain or (loss) excluded from effectiveness testing included in income:
Three Months Ended
March 31,
Location of gain or (loss) 2020 2019
Foreign currency forward contracts Other income (expense) $ —
$ 88
Foreign currency option contracts (excluded component) ⁽²⁾
Revenues (521 ) —
Total $ (521 ) $ 88


Amount of gain or (loss) recognized in accumulated other comprehensive income:
		Three Months Ended March 31,
		2021		2020
Foreign currency forward and option contracts (included component) (1)		$	31,374	$	28,025
Foreign currency option contracts (excluded component) (2)		196		1,318
Interest rate locks		5,801		(26,232)
Total		$	37,371	$	3,111

Amount of gain or (loss) reclassified from accumulated other comprehensive income to income:
		Three Months Ended March 31,
	Location of gain or (loss)	2021		2020
Foreign currency forward contracts	Revenues	$	(12,969)	$	21,219
Foreign currency forward contracts	Costs and operating expenses	7,204		(11,000)
Interest rate locks	Interest Expense	(805)		168
Total		$	(6,570)	$	10,387

Amount of gain or (loss) excluded from effectiveness testing included in income:
		Three Months Ended March 31,
	Location of gain or (loss)	2021		2020

Foreign currency option contracts (excluded component) (2)	Revenues	$	(181)	$	(521)
Total		$	(181)	$	(521)

⁽¹⁾

(1)Included component represents foreign exchange spot rates.

~~Table of Contents~~(2)

~~EQUINIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

Excluded component represents option's time value.

Derivatives Not Designated as Hedging Instruments

Embedded Derivatives. ~~The Company is~~We are deemed to have foreign currency forward contracts embedded in certain of ~~the Company's~~our customer agreements that are priced in currencies different from the functional or local currencies of the parties involved. These embedded derivatives are separated from their host contracts and carried on ~~the Company's~~our balance sheet at their fair value. The majority of these embedded derivatives arise as a result of ~~the Company's~~our foreign subsidiaries pricing their customer contracts in U.S. Dollars.

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Economic Hedges of Embedded Derivatives. ~~The Company uses~~We use foreign currency forward contracts to manage the foreign exchange risk associated with ~~the Company's~~our customer agreements that are priced in currencies different from the functional or local currencies of the parties involved ("economic hedges of embedded derivatives"). Foreign currency forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon price on an agreed-upon settlement date.

Foreign Currency Forward Contracts. ~~The Company~~We also ~~uses~~use foreign currency forward contracts to manage the foreign exchange risk associated with certain foreign currency-denominated monetary assets and liabilities. As a result of foreign currency fluctuations, the U.S. Dollar equivalent values of ~~its~~our foreign currency-denominated monetary assets and liabilities change. Gains and losses on these contracts are included in other income (expense), on a net basis, along with the foreign currency gains and losses of the related foreign currency-denominated monetary assets and liabilities associated with these foreign currency forward contracts. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the total notional amounts of these foreign currency contracts were ~~$4.2~~$5.9 billion and ~~$2.5~~$3.4 billion, respectively.

The following table presents the effect of derivatives not designated as hedging instruments in ~~the Company's~~our condensed consolidated statements of operations (in thousands):

Amount of gain or (loss) recognized in earnings:
Three Months Ended
March 31,
Location of gain or (loss) 2020 2019
Embedded derivatives Revenues $ 7,451
$ 907
Economic hedge of embedded derivatives Revenues (7,902 ) (57 )
Foreign currency forward contracts Other income (expense) 133,824
8,351
Total $ 133,373
$ 9,201


Amount of gain or (loss) recognized in earnings:
		Three Months Ended March 31,
	Location of gain or (loss)	2021		2020
Embedded derivatives	Revenues	$	4,495	$	7,451
Economic hedge of embedded derivatives	Revenues	(4,213)		(7,902)
Foreign currency forward contracts	Other income (expense)	56,800		133,824
Total		$	57,082	$	133,373

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

Fair Value of Derivative Instruments

The following table presents the fair value of derivative instruments recognized in ~~the Company's~~our condensed consolidated balance sheets as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 (in thousands):

March 31, 2020 December 31, 2019

Assets ⁽¹⁾

Liabilities ⁽²⁾

Assets ⁽¹⁾

Liabilities ⁽²⁾
Designated as hedging instruments:
Cash flow hedges
Foreign currency forward and option contracts $ 46,544
$ 19
$ 24,853
$ 5,898
Interest rate locks 4,373
21,295
—
—
Net investment hedges
Cross-currency interest rate swaps 72,095
—
26,251
—
Total designated as hedging 123,012
21,314
51,104
5,898

Not designated as hedging instruments:
Embedded derivatives 10,733
1,102
4,595
2,268
Economic hedges of embedded derivatives 4,507
23
1,367
—
Foreign currency forward contracts 73,939
59,751
641
27,446
Total not designated as hedging 89,179
60,876
6,603
29,714
Total Derivatives $ 212,191
$ 82,190
$ 57,707
$ 35,612


	March 31, 2021				December 31, 2020
	Assets (1)		Liabilities (2)		Assets (1)		Liabilities (2)
Designated as hedging instruments:
Cash flow hedges
Foreign currency forward and option contracts	$	7,832	$	28,869	$	351	$	52,804
Interest rate locks	4,996		0		0		0
Net investment hedges
Cross-currency interest rate swaps	8,259		100,499		0		192,939
Foreign currency forward contracts	0		22,011		0		17,041
Total designated as hedging	21,087		151,379		351		262,784

Not designated as hedging instruments:
Embedded derivatives	5,324		1,604		3,255		3,858
Economic hedges of embedded derivatives	0		2,223		4,372		12
Foreign currency forward contracts	50,919		9,644		3,721		133,805
Total not designated as hedging	56,243		13,471		11,348		137,675
Total Derivatives	$	77,330	$	164,850	$	11,699	$	400,459

⁽¹⁾

(1)As presented in our condensed consolidated balance sheets within other current assets and other assets.

(2)As presented in our condensed consolidated balance sheets within other current liabilities and other liabilities.

Offsetting Derivative Assets and Liabilities

~~The Company presents its~~We present our derivative instruments and the accrued interest related to cross-currency interest rate swaps at gross fair values in the condensed consolidated balance sheets. ~~The Company enters~~We enter into master netting agreements with ~~its~~our counterparties for transactions other than embedded derivatives to mitigate credit risk exposure to any single counterparty. Master netting agreements allow for individual derivative contracts with a single counterparty to offset in the event of default. For presentation on the condensed consolidated balance sheets, ~~the Company does~~we do not offset fair value amounts recognized for derivative instruments or the accrued interest related to cross-currency interest rate swaps under master netting arrangements. The following table presents information related to these offsetting arrangements as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 (in thousands):

Gross Amounts Offset in
Consolidated Balance Sheet

Gross Amounts Gross Amounts Offset in the Balance Sheet Net Amounts Gross Amounts not Offset in the Balance Sheet Net
March 31, 2020
Derivative assets $ 224,453
$ —
$ 224,453
$ (85,190 ) $ 139,263
Derivative liabilities 88,477
—
88,477
(85,190 ) 3,287

December 31, 2019
Derivative assets $ 76,640
$ —
$ 76,640
$ (37,820 ) $ 38,820
Derivative liabilities 45,832
—
45,832
(37,820 ) 8,012


	Gross Amounts Offset in Consolidated Balance Sheet
	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Net Amounts		Gross Amounts not Offset in the Balance Sheet		Net
March 31, 2021
Derivative assets	$	105,185	$	0	$	105,185	$	(86,858)	$	18,327
Derivative liabilities	181,461		0		181,461		(86,858)		94,603

December 31, 2020
Derivative assets	$	38,447	$	0	$	38,447	$	(35,100)	$	3,347
Derivative liabilities	415,628		0		415,628		(35,100)		380,528

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

7. Fair Value Measurements

~~Valuation Methods~~We perform fair value measurements in accordance with ASC 820, Fair Value Measurement, which establishes three levels of inputs that we use to measure fair value:

~~Fair value estimates are made as of a specific point~~•Level 1: quoted prices in ~~time based on methods using the market approach valuation method which uses prices~~active markets for identical assets or liabilities.

•Level 2: observable inputs (e.g. spot rates and other ~~relevant information generated by~~data from the third-party pricing vendors for our derivative instruments) other than quoted market ~~transactions involving identical~~prices included within Level 1 that are observable, either directly or ~~comparable~~indirectly, for the assets or ~~liabilities or other~~liabilities.

•Level 3: unobservable inputs to the valuation ~~techniques. These techniques involve uncertainties and~~methodology that are ~~affected by~~significant to the assumptions used and the judgments made regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows, future expected loss experience and other factors.

~~Cash Equivalents and Investments.~~ The fair value of the Company's investments in money market funds approximates their face value. Such instruments are included in cash equivalents. The Company's money market funds and publicly traded equity securities are classified within Level 1measurement of the fair value ~~hierarchy because they are valued using quoted prices for identical instruments in active markets. The~~of assets or liabilities.

Our financial assets and liabilities measured at fair value on a recurring basis as of the Company's other investments, including certificates of deposit, approximates their face value. The fair value of these investments is priced based on the quoted market price for similar instruments or nonbinding market prices that are corroborated by observable market data. Such instruments are classified within Level 2 of the fair value hierarchy. The Company determines the fair values of its Level 2 investments by using inputs suchMarch 31, 2021 and December 31, 2020 were as actual trade data, benchmark yields, broker/dealer quotes and other similar data, which are obtained from quoted market prices, custody bank, third-party pricing vendors or other sources. The Company uses such pricing data as the primary input to make its assessments and determinations as to the ultimate valuation of its investment portfolio and has not made, during the periods presented, any material adjustments to such inputs. The Company is responsible for its consolidated financial statements and underlying estimates.follows (in thousands):

~~The Company uses the specific identification method in computing realized gains and losses. Realized gains and losses from the sale of investments~~


	As of March 31, 2021						As of December 31, 2020
	Fair Value		Fair Value Measurement Using				Fair Value		Fair Value Measurement Using
			Level 1		Level 2				Level 1		Level 2
Assets:
Money market and deposit accounts	$	587,615	$	587,615	$	0	$	611,071	$	611,071	$	0
Publicly traded equity securities	153		153		0		159		159		0
Certificates of deposit	4,076		0		4,076		4,373		0		4,373
Derivative instruments (1)	77,330		0		77,330		11,699		0		11,699
Total	$	669,174	$	587,768	$	81,406	$	627,302	$	611,230	$	16,072
Liabilities:
Derivative instruments (1)	$	164,850	$	0	$	164,850	$	400,459	$	0	$	400,459

(1)Amounts are included within other ~~income (expense)~~current assets, other assets, others current liabilities and other liabilities in the ~~Company's~~condensed consolidated statements of operations. The Company's investments in publicly traded equity securities are carried at fair value. Unrealized gains and losses on publicly traded equity securities are reported within other income (expense) in the Company's consolidated statements of operations.

~~Derivative Assets and Liabilities~~. Inputs used for valuations of derivatives are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data. The significant inputs used include spot currency rates and forward points, interest rate curves, and published credit default swap rates of its foreign exchange trading counterparties and other comparable companies. The Company has determined that the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, therefore the derivatives are categorized as Level 2.balance sheets.

~~The Company~~We did not have any nonfinancial assets or liabilities measured at fair value on a recurring basis as of March 31, ~~2020~~2021 and December 31, ~~2019.~~2020.

~~Table of Contents~~

~~EQUINIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

~~The Company's financial assets and liabilities measured at fair value on a recurring basis~~Other than the contingent consideration related to the EMEA Joint Venture as ~~of March 31, 2020 were as follows (in thousands):~~

Fair Value at
March 31,
2020
Fair Value
Measurement Using
Level 1 Level 2
Assets:
Money market and deposit accounts $ 453,349
$ 453,349
$ —
Publicly traded equity securities 2,664
2,664
—
Certificates of deposit 23,169
—
23,169
Derivative instruments ⁽¹⁾
212,191
—
212,191
Total $ 691,373
$ 456,013
$ 235,360
Liabilities:
Derivative instruments ⁽¹⁾
$ 82,190
$ —
$ 82,190


⁽¹⁾	~~Amounts are included within other current assets, other assets, others current liabilities and other liabilities in the Company's accompanying condensed consolidated balance sheet.~~

~~The Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 were as follows (in thousands):~~

Fair Value at
December 31,
2019
Fair Value
Measurement Using
Level 1 Level 2
Assets:
Money market and deposit accounts $ 886,547
$ 886,547
$ —
Publicly traded equity securities 2,779
2,779
—
Certificates of deposit 7,583
—
7,583
Derivative instruments ⁽¹⁾
57,707
—
57,707
Total $ 954,616
$ 889,326
$ 65,290
Liabilities:
Derivative instruments ⁽¹⁾
$ 35,612
$ —
$ 35,612


⁽¹⁾	~~Amounts are included within other current assets, other assets, other current liabilities and other liabilities in the Company's accompanying condensed consolidated balance sheet.~~

~~The Company~~described in Note 5 above, we did not have any Level 3 financial assets or financial liabilities measured at fair value on a recurring basis as of March 31, ~~2020~~2021 and December 31, ~~2019.~~

~~8. Leases~~

~~Significant Lease Transactions~~

~~Silicon Valley 4 ("SV4") Data Center~~

In February 2020, the Company exercised its first renewal option available to extend the lease term for the SV4 Data Center for 5 years. After exercising the first renewal option, there are 2 renewal options of 5 years each remaining. The Company concluded that the two remaining renewal options of 5 years each are reasonably certain to be exercised after considering all relevant factors that create an economic incentive for the Company. Therefore, the concluded lease term is 15 years and 7 months with the lease ending on September 30, 2035. The Company assessed the lease classification of the SV4 lease at the modification date and determined the lease should be accounted for as a finance lease. During the three months ended March 31, 2020, the Company recorded finance lease ROU asset and liability of $62.8 million and $63.3 million, respectively.

2020.

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EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

8. Leases

~~Hong Kong 1 ("HK1") Data Center~~Significant Lease Transactions

~~In March 2020,~~The following table summarizes the ~~Company entered into several~~significant lease agreements with the landlord to lease several premises in the HK1 Data Center. One of the premises commenced in March 2020 with an initial term of 18 years. The Company assessed the lease classification of that premises at the commencement date and determined the lease should be accounted for as a finance lease. The Company will assess the remaining premises when the leases commence. Duringtransactions during the three months ended March 31, ~~2020,~~2021 (in millions):

Renewal/Termination Options Excluded (1)

Net Incremental (2)

Lease

Quarter

Transaction

Lease Classification

ROU assets

ROU liabilities

Silicon Valley 8 ("SV8") data center lease extended (3)

Extended lease term by 16 years

NaN 10-year renewal options

Finance Lease

98.1

100.0

Operating Lease

(13.7)

(15.6)

Hong Kong 3 ("HK3") data center lease extended (3)

Extended lease by 10 years, which included a 5-year renewal option

N/A

Finance Lease - Building

38.0

Operating Lease - Land

6.6

(1) These renewal/termination options are not included in determining the ~~Company~~lease terms as we are not reasonably certain to exercise them at this time.

(2) The net incremental amounts represent the adjustments to the right of use ("ROU") assets and liabilities recorded ~~finance lease ROU asset and liability of 163.0 million Hong Kong dollars or $21.0 million at~~during the ~~exchange rate in effect on March 31, 2020.~~quarter that the transactions were entered.

(3) These leases had components previously classified as operating leases.

Lease Expenses

The components of lease expenses are as follows (in thousands):


	Three Months Ended March 31,
	2021		2020
Finance lease cost
Amortization of ROU assets (1)	$	36,128	$	25,166
Interest on lease liabilities	30,193		27,825
Total finance lease cost	66,321		52,991

Operating lease cost	56,454		53,791
Variable lease cost	8,040		2,582
Total lease cost	$	130,815	$	109,364

Three Months Ended
March 31, 2020 Three Months Ended
March 31, 2019
Finance lease cost
Amortization of right-of-use assets ⁽¹⁾
$ 25,166
$ 20,086
Interest on lease liabilities 27,825
27,523
Total finance lease cost 52,991
47,609

Operating lease cost 53,791
51,639
Total lease cost $ 106,782
$ 99,248

⁽¹⁾Amortization of ~~right-of-use~~ROU assets is included with depreciation expense, and is recorded within cost of revenues, sales and marketing and general and administrative expenses in the condensed consolidated statements of operations.

2023

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EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

Other Information

Other information related to leases is as follows (in thousands):

Three Months Ended
March 31, 2020 Three Months Ended
March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from finance leases $ 26,967
$ 26,604
Operating cash flows from operating leases 51,985
49,262
Financing cash flows from finance leases 18,977
31,158

Right-of-use assets obtained in exchange for lease obligations: ⁽¹⁾

Finance leases $ 115,274
$ 16,307
Operating leases 6,612
28,987

As of March 31, 2020 As of December 31, 2019
Weighted-average remaining lease term - finance leases ⁽²⁾
15 years
15 years
Weighted-average remaining lease term - operating leases ⁽²⁾
13 years
13 years
Weighted-average discount rate - finance leases 8 % 9 %
Weighted-average discount rate - operating leases 4 % 4 %
Finance lease assets ⁽³⁾
$ 1,343,406
$ 1,277,614


	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	28,399		$	26,967
Operating cash flows from operating leases	52,092			51,985
Financing cash flows from finance leases	32,584			18,977

ROU assets obtained in exchange for lease obligations: (1)
Finance leases	$	186,981		$	115,274
Operating leases	(1,948)			6,612

	As of March 31, 2021			As of December 31, 2020
Weighted-average remaining lease term - finance leases (2)	14 years			14 years
Weighted-average remaining lease term - operating leases (2)	12 years			12 years
Weighted-average discount rate - finance leases	7		%	7		%
Weighted-average discount rate - operating leases	4		%	4		%
Finance lease assets (3)	$	1,816,380		$	1,688,032

⁽¹⁾Represents all non-cash changes in ROU assets.

⁽²⁾Includes lease renewal options that are reasonably certain to be exercised.

⁽³⁾As of March 31, ~~2020~~2021 and December 31, ~~2019, the Company~~2020, we recorded accumulated amortization of finance lease assets of ~~$498.1~~$626.8 million and ~~$474.8~~$604.1 million, respectively. Finance lease assets are recorded within property, plant and equipment, net on the condensed consolidated balance sheets.

Maturities of Lease Liabilities

Maturities of lease liabilities as of March 31, ~~2020~~2021 are as follows (in thousands):

Operating Leases Finance Leases Total
2020 (9 months remaining) $ 137,567
$ 141,162
$ 278,729
2021 190,031
191,679
381,710
2022 182,747
188,362
371,109
2023 167,266
183,177
350,443
2024 155,392
181,116
336,508
Thereafter 1,080,313
1,796,773
2,877,086
Total lease payments 1,913,316
2,682,269
4,595,585
Plus amount representing residual property value —
17,639
17,639
Less imputed interest (510,756 ) (1,120,701 ) (1,631,457 )
Total $ 1,402,560
$ 1,579,207
$ 2,981,767


	Operating Leases		Finance Leases		Total
2021 (9 months remaining)	$	139,653	$	183,906	$	323,559
2022	196,704		231,600		428,304
2023	181,741		226,851		408,592
2024	168,996		224,965		393,961
2025	160,384		221,551		381,935
Thereafter	1,037,936		2,084,622		3,122,558
Total lease payments	1,885,414		3,173,495		5,058,909
Plus amount representing residual property value	0		16,363		16,363
Less imputed interest	(485,684)		(1,127,963)		(1,613,647)


Total	$	1,399,730	$	2,061,895	$	3,461,625

~~The Company~~We entered into agreements with various landlords primarily to lease data center spaces and ground leases which have not yet commenced as of March 31, ~~2020.~~2021. These leases will commence between ~~fiscal years 2020~~year 2021 and ~~2022,~~2023, with lease terms of 210 to 4947 years and a total lease ~~commitment~~commitments of approximately ~~$680.8~~$566.6 million.

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

9. Debt Facilities

Mortgage and Loans Payable

As of March 31, ~~2020~~2021 and December 31, ~~2019, the Company's~~2020, our mortgage and loans payable consisted of the following (in thousands):

March 31,
2020 December 31, 2019
Term loans $ 1,219,047
$ 1,287,151
Revolving credit facility 250,000
—
Mortgage payable and loans payable 77,236
82,967
1,546,283
1,370,118
Less amount representing unamortized debt discount and debt issuance cost (4,330 ) (4,849 )
Add amount representing unamortized mortgage premium 1,715
1,768
1,543,668
1,367,037
Less current portion (74,473 ) (77,603 )
Total $ 1,469,195
$ 1,289,434


	March 31, 2021		December 31, 2020
Term loans	$	1,234,094	$	1,292,067

Mortgage payable and loans payable	75,842		78,903
	1,309,936		1,370,970
Less amount representing unamortized debt discount and debt issuance cost	(2,706)		(3,288)
Add amount representing unamortized mortgage premium	1,745		1,861
	1,308,975		1,369,543
Less current portion	(79,902)		(82,289)
Total	$	1,229,073	$	1,287,254

Senior Credit Facility - Revolving Facility

~~On December 12,~~In 2017, ~~the Company~~we entered into a credit agreement with a group of lenders for a ~~$3,000.0 million~~$3.0 billion credit facility ("Senior Credit Facility"), comprised of a ~~$2,000.0 million~~$2.0 billion senior unsecured multicurrency revolving credit facility ("Revolving Facility") and an approximately ~~$1,000.0 million~~$1.0 billion senior unsecured multicurrency term loan ~~facility.~~ facility (the "Term Loan Facility"). The credit agreement was subsequently amended to provide an additional senior unsecured term loan in Japanese yen for approximately $424.7 million at the exchange rate effective on the transaction date. The Term Loan Facility bears interest at a rate based on LIBOR plus a margin that can vary from 1.00% to 1.70%. We are required to repay the Term Loan Facility at a rate of 5% of the original principal amount per annum with the remaining balance to be repaid in full at the maturity of the Senior Credit Facility on December 12, 2022. As of March 31, 2021 and December 31, 2020, the total amounts outstanding under the Term Loan Facility, net of debt issuance costs, were $1.2 billion and $1.3 billion, respectively.

The Revolving Facility allows ~~the Company~~us to borrow, repay and reborrow over its term. The Revolving Facility provides a sublimit for the issuance of letters of credit of up to $250.0 million at any one time.

In March 2020, ~~the Company~~we borrowed a total of $250.0 million under the Revolving Facility, which ~~remained outstanding as~~was fully repaid in May 2020. As of March 31, ~~2020. In addition, the Company~~2021, we had 4137 irrevocable letters of credit totaling ~~$76.1~~$75.7 million issued and outstanding under the Revolving Facility ~~as of March 31, 2020. As a result,~~and the amount available to ~~the Company~~us to borrow under the Revolving Facility was approximately ~~$1.7~~$1.9 billion as of March 31, ~~2020.~~

2021.

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

Senior Notes

As of March 31, ~~2020~~2021 and December 31, ~~2019, the Company's~~2020, our senior notes consisted of the following (in thousands):


												March 31, 2021				December 31, 2020
	March 31, 2020					December 31, 2019						Amount		Effective Rate		Amount		Effective Rate
	Amount			Effective Rate		Amount			Effective Rate
5.000% Infomart Senior Notes ⁽¹⁾	$	450,000		4.46	%	$	450,000		4.46	%
5.375% Senior Notes due 2022	—			—	%	343,711			5.56	%
5.000% Infomart Senior Notes											5.000% Infomart Senior Notes	$	150,000	4.51	%	$	150,000	4.51	%
2.625% Senior Notes due 2024	1,000,000			2.79	%	1,000,000			2.79	%	2.625% Senior Notes due 2024	1,000,000		2.79	%	1,000,000		2.79	%
2.875% Euro Senior Notes due 2024	825,300			3.08	%	841,500			3.08	%
2.875% Euro Senior Notes due 2025	1,100,400			3.04	%	1,122,000			3.04	%
1.250% Senior Notes due 2025											1.250% Senior Notes due 2025	500,000		1.46	%	500,000		1.46	%
1.000% Senior Notes Due 2025											1.000% Senior Notes Due 2025	700,000		1.18	%	700,000		1.18	%
2.900% Senior Notes due 2026	600,000			3.04	%	600,000			3.04	%	2.900% Senior Notes due 2026	600,000		3.04	%	600,000		3.04	%
5.875% Senior Notes due 2026	1,100,000			6.03	%	1,100,000			6.03	%
2.875% Euro Senior Notes due 2026	1,100,400			3.04	%	1,122,000			3.04	%	2.875% Euro Senior Notes due 2026	0		0	%	611,050		3.04	%
0.250% Euro Senior Notes due 2027											0.250% Euro Senior Notes due 2027	586,750		0.45	%	0		0	%
1.800% Senior Notes due 2027											1.800% Senior Notes due 2027	500,000		1.96	%	500,000		1.96	%
5.375% Senior Notes due 2027	1,250,000			5.51	%	1,250,000			5.51	%	5.375% Senior Notes due 2027	1,250,000		5.51	%	1,250,000		5.51	%
1.550% Senior Notes due 2028											1.550% Senior Notes due 2028	650,000		1.67	%	650,000		1.67	%
3.200% Senior Notes due 2029	1,200,000			3.30	%	1,200,000			3.30	%	3.200% Senior Notes due 2029	1,200,000		3.30	%	1,200,000		3.30	%
2.150% Senior Notes due 2030											2.150% Senior Notes due 2030	1,100,000		2.27	%	1,100,000		2.27	%
1.000% Euro Senior Notes due 2033											1.000% Euro Senior Notes due 2033	704,100		1.18	%	0		0	%
3.000% Senior Notes due 2050											3.000% Senior Notes due 2050	500,000		3.09	%	500,000		3.09	%
2.950% Senior Notes due 2051											2.950% Senior Notes due 2051	500,000		3.00	%	500,000		3.00	%
	8,626,100					9,029,211						9,940,850				9,261,050
Less amount representing unamortized debt issuance cost	(73,075		)			(78,030		)			Less amount representing unamortized debt issuance cost	(105,489)				(92,773)
Add amount representing unamortized debt premium	1,121					1,716					Add amount representing unamortized debt premium	3				186
	8,554,146					8,952,897						9,835,364				9,168,463
Less current portion	(300,401		)			(643,224		)			Less current portion	(150,003)				(150,186)
Total	$	8,253,745				$	8,309,673				Total	$	9,685,361			$	9,018,277

⁽¹⁾

Table of Contents~~5.000% Infomart~~

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

0.250% Euro Senior Notes ~~consist~~due 2027 and 1.000% Euro Senior Notes due 2033

On March 10, 2021, we issued €500.0 million, or approximately $594.9 million in U.S. dollars, at the exchange rate in effect on March 10, 2021, aggregate principal amount of ~~three tranches~~0.250% senior notes due March 15, 2027 (the "2027 Euro Notes") and €600.0 million, or approximately $713.8 million in U.S. dollars, at the exchange rate in effect on March 10, 2021, aggregate principal amount of 1.000% senior notes due March 15, 2033 (the "2033 Euro Notes").

Interest on the notes is payable annually in arrears on March 15 of each year, commencing on March 15, 2022. Total debt issuance costs and debt discounts related to the 2027 Euro Notes and the 2033 Euro Notes were $7.0 million and $14.1 million, respectively.

Redemption of ~~April 2020, October 2020 and April 2021. The effective rate represents the weighted-average effective interest rates~~2.875% Euro Senior Notes due 2026

On March 24, 2021, using a portion of the ~~tranches outstanding at~~net cash proceeds from the ~~periods presented in the table above.~~

~~On January 2, 2020, the Company~~new 2027 Euro Senior Notes and 2033 Euro Senior Notes, we redeemed the remaining ~~$343.7 million principal amount of the 5.375%~~outstanding 2.875% Euro Senior Notes due ~~2022.~~2026 for $590.7 million in U.S. dollars, at the exchange rate in effect on March 24, 2021. In connection with the redemption, ~~the Company~~we incurred ~~$5.9~~$13.2 million of loss on debt extinguishment, including ~~$4.6~~$8.5 million in redemption premium that was paid in cash and ~~$1.3~~$4.7 million related to the write-off of unamortized debt issuance ~~costs.~~costs, during the three months ended March 31, 2021.

Maturities of Debt Instruments

The following table sets forth maturities of ~~the Company's~~our debt, including mortgage and loans payable, and senior notes, gross of debt issuance costs, debt discounts and debt premiums, as of March 31, ~~2020~~2021 (in thousands):

Years ending:
2020 (9 months remaining) $ 355,962
2021 224,507
2022 1,383,505
2023 6,357
2024 1,831,174
Thereafter 6,372,592
Total $ 10,174,097

~~Table of Contents~~

~~EQUINIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~


Years ending:
2021 (9 months remaining)	$	209,968
2022	1,214,144
2023	6,778
2024	1,006,322
2025	1,204,665
Thereafter	7,610,654
Total	$	11,252,531

Fair Value of Debt Instruments

The following table sets forth the estimated fair values of ~~the Company's~~our mortgage and loans payable and senior notes, including current maturities, as of (in thousands):

March 31,
2020 December 31,
2019
Mortgage and loans payable $ 1,557,789
$ 1,378,429
Senior notes 8,366,223
9,339,497


	March 31, 2021		December 31, 2020
Mortgage and loans payable	$	1,316,062	$	1,379,129
Senior notes	9,915,009		9,705,486

The fair values of the mortgage and loans payable and 5.000% Infomart Senior Notes, which are not publicly traded, were estimated by considering ~~the Company's~~our credit rating, current rates available to ~~the Company~~us for debt of the same remaining maturities and terms of the debt (Level 2). The fair value of the senior notes, which are traded in the public debt market, was based on quoted market prices (Level 1).

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Interest Charges

The following table sets forth total interest costs incurred, and total interest costs capitalized for the periods presented (in thousands):

Three Months Ended
March 31,
2020 2019
Interest expense $ 107,338
$ 122,846
Interest capitalized 6,031
9,854
Interest charges incurred $ 113,369
$ 132,700


	Three Months Ended March 31,
	2021		2020
Interest expense	$	89,681	$	107,338
Interest capitalized	6,108		6,031
Interest charges incurred	$	95,789	$	113,369

Total interest paid in cash, net of capitalized interest, during the three months ended March 31, 2021 and 2020 was $94.9 million and ~~2019 was~~ $119.9 million, ~~and $136.3 million,~~ respectively.

10. Commitments and Contingencies

Purchase and Other Commitments

As a result of ~~the Company's~~our various IBX data center expansion projects, as of March 31, ~~2020, the Company was~~2021, we were contractually committed for approximately ~~$0.9~~$1.3 billion of unaccrued capital expenditures, primarily for IBX infrastructure equipment not yet delivered and labor not yet provided, in connection with the work necessary to open these IBX data centers and make them available to our customers for installation. ~~The Company~~We also had numerous other, non-capital purchase commitments in place as of March 31, ~~2020,~~2021, such as commitments to purchase power in select locations through the remainder of ~~2020~~2021 and thereafter, and other open purchase orders for goods or services to be delivered or provided during the remainder of ~~2020~~2021 and thereafter. Such other miscellaneous purchase commitments totaled approximately ~~$1.1~~$1.3 billion as of March 31, ~~2020.~~2021. In addition, ~~the Company~~we entered into lease agreements in various locations that have not yet commenced as of March 31, ~~2020.~~2021. For further information on equity contribution commitments and lease commitments, see Note 5 and Note 8, respectively, above.

~~Equity Contribution Commitments~~

In connection with the EMEA Joint Venture closed in October 2019, the Company agreed to make future equity contributions to the EMEA Joint Venture. As of March 31, 2020, the Company had future equity contribution commitments of €16.1 million and £13.1 million, or $33.9 million in total at the exchange rate in effect on March 31, 2020.

Contingent Liabilities

~~The Company estimates~~We estimate our exposure on certain liabilities, such as indirect and property taxes, based on the best information available at the time of determination. With respect to real and personal property taxes, ~~the Company~~

~~Table of Contents~~

~~EQUINIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

~~records~~we record what itwe can reasonably estimate based on prior payment history, assessed value by the assessor's office, current landlord estimates or estimates based on current or changing fixed asset values in each specific municipality, as applicable. However, there are circumstances beyond ~~the Company's~~our control whereby the underlying value of the property or basis for which the tax is calculated on the property may change, such as a landlord selling the underlying property of one of ~~the Company's~~our IBX data center leases or a municipality changing the assessment value in a jurisdiction and, as a result, ~~the Company's~~our property tax obligations may vary from period to period. Based upon the most current facts and circumstances, ~~the Company makes~~we make the necessary property tax accruals for each of ~~its~~our reporting periods. However, revisions in ~~the Company's~~our estimates of the potential or actual liability could materially impact ~~the~~our financial position, results of operations or cash ~~flows of the Company.~~flows.

~~The Company's~~Our indirect and property tax filings in various jurisdictions are subject to examination by local tax authorities. Although we believe that we have adequately assessed and accounted for our potential tax liabilities, and that our tax estimates are reasonable, there can be no certainty that additional taxes will not be due upon audit of our tax returns or as a result of further changes to the tax laws and interpretations thereof. For example, we are currently undergoing ~~audits~~an audit and appealing the tentative ~~assessments~~assessment in ~~a number of jurisdictions where we operate, such as France and~~ Brazil. The final ~~results~~settlement of ~~these audits~~the audit and the ~~outcomes~~outcome of the ~~appeals~~appeal are uncertain and may not be resolved in our favor. ~~The Company~~We regularly ~~assesses~~assess the likelihood of adverse outcomes resulting from these examinations and appeals that would affect the adequacy of ~~its~~our tax accruals for each of the reporting periods. If any issues arising from the tax examinations and appeals are resolved in a manner inconsistent with ~~the Company's~~our expectations, the revision of the estimates of the potential or actual liabilities could materially impact ~~the~~our financial position, results of operations, or cash ~~flows of the Company.~~

flows.

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

Indemnification and Guarantor Arrangements

As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was serving, at our request in such capacity. The term of the indemnification period is for the officer's or director's lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have a director and officer insurance policy that could limit our exposure and enable us to recover a portion of any future amounts paid. As a result of our insurance policy that could limit our exposure and enable us to recover some or all of amounts paid, we believe the estimated fair value of these indemnification agreements is minimal. We have 0 liabilities recorded for these agreements as of March 31, 2021.

We enter into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, we indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally our business partners or customers, in connection with any U.S. patent, or any copyright or other intellectual property infringement claim by any third party with respect to our offerings. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the estimated fair value of these agreements is minimal. We have 0 liabilities recorded for these agreements as of March 31, 2021.

We enter into arrangements with our business partners, whereby the business partner agrees to provide services as a subcontractor for our installations. Accordingly, we enter into standard indemnification agreements with our customers, whereby we indemnify them for other acts, such as personal property damage, of our subcontractors. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have general and umbrella insurance policies that could enable us to recover a portion of any amounts paid. We have never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the estimated fair value of these agreements is minimal. We have 0 liabilities recorded for these agreements as of March 31, 2021.

We have service level commitment obligations to certain of our customers. As a result, service interruptions or significant equipment damage in our IBX data centers, whether or not within our control, could result in service level commitments to these customers. Our liability insurance may not be adequate to cover those expenses. In addition, any loss of services, equipment damage or inability to meet our service level commitment obligations could reduce the confidence of our customers and could consequently impair our ability to obtain and retain customers, which would adversely affect both our ability to generate revenues and our operating results. We generally have the ability to determine such service level credits prior to the associated revenue being recognized. We do 0t have significant liabilities in connection with service level credits as of March 31, 2021.

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

11. Stockholders' Equity

Stockholders' Equity Rollforward

The following tables provide a rollforward of our stockholders' equity for the three months ended March 31, 2021 and 2020 (in thousands, except share and ~~2019 (in thousands)~~per share data):

AOCI (Loss)
Retained
Earnings

Equinix
Stockholders'
Equity
Non-controlling Interests Total Stockholders' Equity
Common Stock Treasury Stock
Additional
Paid-in Capital
Accumulated
Dividends
Shares Amount Shares Amount
Balance as of December 31, 2019 85,700,953
$ 86
(392,567 ) $ (144,256 ) $ 12,696,433
$ (4,168,469 ) $ (934,613 ) $ 1,391,425
$ 8,840,606
$ (224 ) $ 8,840,382
Adjustment from adoption of new accounting standard update —
—
—
—
—
—
—
(900 ) (900 ) —
(900 )
Net income —
—
—
—
—
—
—
118,792
118,792
165
118,957
Other comprehensive loss —
—
—
—
—
—
(272,056 ) —
(272,056 ) (11 ) (272,067 )
Issuance of common stock and release of treasury stock for employee equity awards 405,550
—
50,594
16,958
13,432
—
—
—
30,390
—
30,390
Issuance of common stock under ATM Program 162,530
—
—
—
101,791
—
—
—
101,791
—
101,791
Dividend distribution on common stock, $2.66 per share —
—
—
—
—
(227,387 ) —
—
(227,387 ) —
(227,387 )
Settlement of accrued dividends on vested equity awards —
—
—
—
109
(403 ) —
—
(294 ) —
(294 )
Accrued dividends on unvested equity awards —
—
—
—
—
(3,268 ) —
—
(3,268 ) —
(3,268 )
Stock-based compensation, net of estimated forfeitures —
—
—
—
81,690
—
—
—
81,690
—
81,690
Balance as of March 31, 2020 86,269,033
$ 86
(341,973 ) $ (127,298 ) $ 12,893,455
$ (4,399,527 ) $ (1,206,669 ) $ 1,509,317
$ 8,669,364
$ (70 ) $ 8,669,294


											AOCI (Loss)		Retained Earnings		Equinix Stockholders' Equity		Non-controlling Interests		Total Stockholders' Equity
	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Dividends
	Shares	Amount		Shares	Amount
Balance as of December 31, 2020	89,462,304	$	89	(328,052)	$	(122,118)	$	15,028,357	$	(5,119,274)	$	(913,368)	$	1,760,302	$	10,633,988	$	130	$	10,634,118

Net income	—	—		—	—		—		—		—		156,362		156,362		(288)		156,074
Other comprehensive loss	—	—		—	—		—		—		(95,480)		—		(95,480)		(1)		(95,481)
Issuance of common stock and release of treasury stock for employee equity awards	428,618	1		11,640	4,332		35,701		—		—		—		40,034		—		40,034

Dividend distribution on common stock, $2.87 per share	—	—		—	—		—		(256,321)		—		—		(256,321)		—		(256,321)
Settlement of accrued dividends on vested equity awards	—	—		—	—		—		(437)		—		—		(437)		—		(437)
Accrued dividends on unvested equity awards	—	—		—	—		—		(3,661)		—		—		(3,661)		—		(3,661)
Stock-based compensation, net of estimated forfeitures	—	—		—			102,349		—		—		—		102,349		—		102,349

Balance as of March 31, 2021	89,890,922	$	90	(316,412)	$	(117,786)	$	15,166,407	$	(5,379,693)	$	(1,008,848)	$	1,916,664	$	10,576,834	$	(159)	$	10,576,675

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)


							Additional Paid-in Capital		Accumulated Dividends		AOCI (Loss)		Retained Earnings		Equinix Stockholders' Equity		Non-controlling interests		Total Stockholders' Equity
	Common Stock			Treasury Stock
	Shares	Amount		Shares	Amount
Balance as of December 31, 2019	85,700,953	$	86	(392,567)	$	(144,256)	$	12,696,433	$	(4,168,469)	$	(934,613)	$	1,391,425	$	8,840,606	$	(224)	$	8,840,382
Adjustment from adoption of new accounting standard update	—	—		—	—		—		—		—		(900)		(900)		—		(900)
Net income	—	—		—	—		—		—		—		118,792		118,792		165		118,957
Other comprehensive income	—	—		—	—		—		—		(272,056)		—		(272,056)		(11)		(272,067)
Issuance of common stock and release of treasury stock for employee equity awards	405,550	—		50,594	16,958		13,432		—		—		—		30,390		—		30,390
Issuance of common stock under ATM Program	162,530	—		—	—		101,791		—		—		—		101,791		—		101,791
Dividend distribution on common stock, $2.66 per share	—	—		—	—		—		(227,387)		—		—		(227,387)		—		(227,387)
Settlement of accrued dividends on vested equity awards	—	—		—	—		109		(403)		—		—		(294)		—		(294)
Accrued dividends on unvested equity awards	—	—		—	—		—		(3,268)		—		—		(3,268)		—		(3,268)
Stock-based compensation, net of estimated forfeitures	—	—		—	—		81,690		—		—		—		81,690		—		81,690

Balance as of March 31, 2020	86,269,033	$	86	(341,973)	$	(127,298)	$	12,893,455	$	(4,399,527)	$	(1,206,669)	$	1,509,317	$	8,669,364	$	(70)	$	8,669,294

Additional
Paid-in Capital
Accumulated
Dividends AOCI (Loss) Retained
Earnings Equinix
Stockholders'
Equity Non-controlling interests Total Stockholders' Equity
Common Stock Treasury Stock
Shares Amount Shares Amount
Balance as of December 31, 2018 81,119,117
$ 81
(396,859 ) $ (145,161 ) $ 10,751,313
$ (3,331,200 ) $ (945,702 ) $ 889,948
$ 7,219,279
$ —
$ 7,219,279
Adjustment from adoption of new accounting standard update —
—
—
—
—
—
—
(5,973 ) (5,973 ) —
(5,973 )
Net income (loss) —
—
—
—
—
—
—
118,078
118,078
(331 ) 117,747
Other comprehensive income —
—
—
—
—
—
3,337
—
3,337
7
3,344
Issuance of common stock and release of treasury stock for employee equity awards 360,464
—
1,706
360
27,233
—
—
—
27,593
—
27,593
Issuance of common stock for equity offering 2,985,575
3
—
—
1,213,431
—
—
—
1,213,434
—
1,213,434
Dividend distribution on common stock, $2.46 per share —
—
—
—
—
(198,933 ) —
—
(198,933 ) —
(198,933 )
Settlement of accrued dividends on vested equity awards —
—
—
—
284
(387 ) —
—
(103 ) —
(103 )
Accrued dividends on unvested equity awards —
—
—
—
—
(2,395 ) —
—
(2,395 ) —
(2,395 )
Stock-based compensation, net of estimated forfeitures —
—
—
—
50,795
—
—
—
50,795
—
50,795
Balance as of March 31, 2019 84,465,156
$ 84
(395,153 ) $ (144,801 ) $ 12,043,056
$ (3,532,915 ) $ (942,365 ) $ 1,002,053
$ 8,425,112
$ (324 ) $ 8,424,788

Table of Contents

EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss, net of tax, by components are as follows (in thousands):

Balance as of
December 31,
2019
Net
Change
Balance as of
March 31,
2020
Foreign currency translation adjustment ("CTA") loss $ (1,056,918 ) $ (413,781 ) $ (1,470,699 )
Unrealized gain on cash flow hedges ⁽¹⁾
15,638
(3,256 ) 12,382
Net investment hedge CTA gain ⁽¹⁾
107,619
144,946
252,565
Net actuarial loss on defined benefit plans ⁽²⁾
(952 ) 35
(917 )
Accumulated other comprehensive loss attributable to Equinix $ (934,613 ) $ (272,056 ) $ (1,206,669 )


	Balance as of December 31, 2020		Net Change		Balance as of March 31, 2021
Foreign currency translation adjustment ("CTA") gain (loss)	$	(508,415)	$	(295,145)	$	(803,560)
Unrealized gain (loss) on cash flow hedges (1)	(67,152)		29,478		(37,674)
Net investment hedge CTA gain (loss) (1)	(336,934)		170,175		(166,759)
Net actuarial gain (loss) on defined benefit plans (2)	(867)		12		(855)
Accumulated other comprehensive loss attributable to Equinix	$	(913,368)	$	(95,480)	$	(1,008,848)

(1)Refer to Note 6 for a discussion of the amounts reclassified from accumulated other comprehensive loss to net income.


⁽¹⁾ (2)We have 2 defined benefit pension plans covering all employees in 2 countries where such plan is mandated by law.	~~Refer to Note 6 for a discussion of the amounts reclassified from accumulated other comprehensive loss to net income.~~

⁽²⁾

The Company has a defined benefit pension plan covering all employees in one country where such plan is mandated by law. The Company does not have any defined benefit plans in any other countries. The unamortized gain (loss) on defined benefit plans includes gains or losses resulting from a change in the value of either the projected benefit obligation or the plan assets resulting from a change in an actuarial assumption, net of amortization.

Changes in foreign currencies can have a significant impact to ~~the Company's~~our condensed consolidated balance sheets (as evidenced above in ~~the Company's~~our foreign currency translation loss), as well as ~~its~~our consolidated results of operations, as amounts in foreign currencies are generally translated into more U.S. Dollars when the U.S. Dollar weakens or fewer U.S. Dollars when the U.S. Dollar strengthens. As of March 31, ~~2020,~~2021, the U.S. Dollar was generally ~~stronger~~weaker relative to certain of the currencies of the foreign countries in which ~~the Company operates~~we operate as compared to December 31, ~~2019. This overall strengthening~~2020. Because of this, the U.S. Dollar had an overall ~~unfavorable~~favorable impact on ~~the Company's~~our condensed consolidated financial position because the foreign denominations translated into ~~fewer~~more U.S. Dollars as evidenced by ~~an increase~~a decrease in foreign currency translation loss for the three months ended March 31, ~~2020~~2021 as reflected in the ~~above table.~~condensed consolidated statements of comprehensive income (loss). The volatility of the U.S. Dollar as compared to the other currencies in which ~~the Company operates~~we operate could have a significant impact on ~~its~~our condensed consolidated financial position and results of operations including the amount of revenue that ~~the Company reports~~we report in future periods.

Common Stock

In ~~March 2019, the Company~~May 2020, we issued and sold ~~2,985,575~~2,587,500 shares of common stock in a public offering pursuant to a registration statement and a related prospectus and prospectus supplement. ~~The Company~~We received net proceeds of approximately ~~$1,213.4 million,~~$1.7 billion, net of underwriting discounts, commissions and offering expenses.

In ~~December 2018, the Company launched an~~October 2020, we established a new ATM program, under which itwe may, ~~offer and sell~~ from time to time, offer and sell up to an aggregate of ~~$750.0 million~~$1.5 billion of ~~its~~our common stock to or through sales agents in "at the market" transactions (the ~~"ATM~~"2020 ATM Program"). For the three months ended March 31, 2021, we did 0t sell any shares under the 2020 ATM Program. For the ~~Company~~three months ended March 31, 2020, we sold 162,530 shares under the prior ATM ~~Program,~~program for approximately $101.8 million, net of payment of commissions to sales agents and other offering expenses. ~~During the quarter ended~~As of March 31, ~~2019,~~2021, no ~~sales were made~~shares remained available for sale under the prior ATM ~~Program.~~program.

Stock-Based Compensation

For the three months ended March 31, ~~2020,~~2021, the Compensation Committee and/or the Stock Award Committee of ~~the Company's~~our Board of Directors, as the case may be, approved the issuance of an aggregate of ~~653,281~~646,388 shares of restricted stock units ("RSUs") to certain employees, including executive ~~officers, pursuant to the 2000 Equity Incentive Plan.~~officers. These equity awards are subject to vesting provisions and have a weighted-average grant date fair value of ~~$579.24~~$650.40 per share and a weighted-average requisite service period of ~~3.31~~3.52 years. The valuation of ~~restricted stock units~~RSUs with only a service condition or a service and performance condition ~~requires~~require no significant assumptions as the fair value for these types of equity awards is based solely on the fair value of ~~the Company's~~our stock price on the date of grant. ~~The Company used~~We use revenues and adjusted funds from operations ("AFFO") per share as the performance measurements in the ~~restricted stock units~~RSUs with both service and performance conditions that were granted in the three months ended March 31, ~~2020.~~

2021.

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EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

~~The Company uses~~We use a Monte Carlo simulation option-pricing model to determine the fair value of ~~restricted stock units~~RSUs with a service and market condition. ~~The Company~~We used total shareholder return ("TSR") as the performance measurement in the ~~restricted stock units~~RSUs with a service and market condition that were granted in the three months ended March 31, ~~2020.~~2021. There were no significant changes in the assumptions used to determine the fair value of ~~restricted stock units~~RSUs with a service and market condition that were granted in ~~2020~~2021 compared to the prior year.

The following table presents, by operating expense category, ~~the Company's~~our stock-based compensation expense recognized in ~~the Company's~~our condensed consolidated statements of operations (in thousands):

Three Months Ended
March 31,
2020 2019
Cost of revenues $ 9,343
$ 5,012
Sales and marketing 18,545
13,301
General and administrative 52,678
30,710
Total $ 80,566
$ 49,023


	Three Months Ended March 31,
	2021		2020
Cost of revenues	$	8,467	$	9,343
Sales and marketing	17,703		18,545
General and administrative	52,180		52,678
Total	$	78,350	$	80,566

12. Segment Information

While ~~the Company has a single~~we have one primary line of business, which is the design, build-out and operation of IBX data centers, ~~it has~~we have determined that ~~it has~~we have 3 reportable segments comprised of ~~its~~our Americas, EMEA and Asia-Pacific geographic regions. ~~The Company's~~Our chief operating decision-maker evaluates performance, makes operating decisions and allocates resources based on ~~the Company's~~our revenues and adjusted EBITDA performance both on a consolidated basis and based on these ~~three~~3 reportable segments.

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~~EQUINIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

Intercompany transactions between segments are excluded for management reporting purposes.

The following tables present revenue information disaggregated by product lines and geographic areas, (in thousands):

Three Months Ended March 31, 2020
Americas EMEA Asia-Pacific Total
Colocation ⁽¹⁾
$ 450,954
$ 362,330
$ 221,093
$ 1,034,377
Interconnection 150,929
48,541
42,671
242,141
Managed infrastructure 25,529
30,137
21,824
77,490
Other ⁽¹⁾
5,220
2,466
—
7,686
Recurring revenues 632,632
443,474
285,588
1,361,694
Non-recurring revenues 29,273
35,435
18,140
82,848
Total $ 661,905
$ 478,909
$ 303,728
$ 1,444,542


	Three Months Ended March 31, 2021
	Americas		EMEA		Asia-Pacific		Total
Colocation (1)	$	487,459	$	388,275	$	254,558	$	1,130,292
Interconnection	164,887		61,650		53,182		279,719
Managed infrastructure	38,485		32,111		22,749		93,345
Other (1)	2,038		5,046		493		7,577
Recurring revenues	692,869		487,082		330,982		1,510,933
Non-recurring revenues	33,071		31,635		20,425		85,131
Total	$	725,940	$	518,717	$	351,407	$	1,596,064

⁽¹⁾Includes some leasing and hedging activities.


	Three Months Ended March 31, 2019									Three Months Ended March 31, 2020
	Americas		EMEA		Asia-Pacific		Total			Americas		EMEA		Asia-Pacific		Total
Colocation ⁽¹⁾	$	439,981	$	331,125	$	209,665	$	980,771	Colocation (1)	$	450,954	$	362,330	$	221,093	$	1,034,377
Interconnection	138,563		37,525		36,696		212,784		Interconnection	150,929		48,541		42,671		242,141
Managed infrastructure	21,787		29,088		21,920		72,795		Managed infrastructure	25,529		30,137		21,824		77,490
Other ⁽¹⁾	5,979		2,499		—		8,478		Other (1)	5,220		2,466		0		7,686
Recurring revenues	606,310		400,237		268,281		1,274,828		Recurring revenues	632,632		443,474		285,588		1,361,694
Non-recurring revenues	38,056		34,423		15,911		88,390		Non-recurring revenues	29,273		35,435		18,140		82,848
Total	$	644,366	$	434,660	$	284,192	$	1,363,218	Total	$	661,905	$	478,909	$	303,728	$	1,444,542

⁽¹⁾Includes some leasing and hedging activities.

~~No single customer accounted for 10% or greater~~

Table of ~~the Company's accounts receivable or revenues for the three months ended March 31, 2020 and 2019.~~Contents

~~The Company defines~~EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

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


	Three Months Ended March 31,
	2021		2020
Adjusted EBITDA:
Americas	$	344,492	$	293,613
EMEA	243,563		230,158
Asia-Pacific	185,177		160,439
Total adjusted EBITDA	773,232		684,210
Depreciation, amortization and accretion expense	(394,318)		(337,431)
Stock-based compensation expense	(78,350)		(80,566)

Transaction costs	(1,182)		(11,530)
Loss on asset sales	(1,720)		(1,199)
Income from operations	$	297,662	$	253,484

Three Months Ended
March 31,
2020 2019
Adjusted EBITDA:
Americas $ 293,613
$ 307,838
EMEA 230,158
199,072
Asia-Pacific 160,439
153,245
Total adjusted EBITDA 684,210
660,155
Depreciation, amortization and accretion expense (337,431 ) (314,705 )
Stock-based compensation expense (80,566 ) (49,023 )
Impairment charges —
(14,448 )
Transaction costs (11,530 ) (2,471 )
Loss on asset sales (1,199 ) —
Income from operations $ 253,484
$ 279,508

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~~EQUINIX, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(Unaudited)~~

~~The Company~~We also ~~provides~~provide the following additional segment disclosures (in thousands):

Three Months Ended
March 31,
2020 2019
Depreciation and amortization:
Americas $ 171,074
$ 166,770
EMEA 92,374
84,165
Asia-Pacific 72,421
62,243
Total $ 335,869
$ 313,178
Capital expenditures:
Americas $ 184,401
$ 144,495
EMEA 122,128
164,355
Asia-Pacific 94,412
55,117
Total $ 400,941
$ 363,967

~~The Company's~~


	Three Months Ended March 31,
	2021		2020
Depreciation and amortization:
Americas	$	203,433	$	171,074
EMEA	110,779		92,374
Asia-Pacific	80,805		72,421
Total	$	395,017	$	335,869
Capital expenditures:
Americas	$	205,174	$	184,401
EMEA	235,416		122,128
Asia-Pacific	123,008		94,412
Total	$	563,598	$	400,941

Our long-lived assets, including property, plant and equipment, net and operating lease right-of-use assets, located in the following geographic areas as of (in thousands):

March 31,
2020 December 31,
2019
Americas $ 5,542,288
$ 5,400,287
EMEA 4,005,962
4,051,701
Asia-Pacific 2,628,794
2,700,609
Total Property, plant and equipment, net $ 12,177,044
$ 12,152,597

Americas $ 374,778
$ 387,598
EMEA 495,554
521,129
Asia-Pacific 544,379
566,640
Total Operating lease right-of-use assets $ 1,414,711
$ 1,475,367


	March 31, 2021		December 31, 2020
Americas	$	6,638,661	$	6,429,861
EMEA	4,976,302		5,002,271
Asia-Pacific	3,153,698		3,070,952
Total Property, plant and equipment, net	$	14,768,661	$	14,503,084

Americas	$	337,686	$	363,515
EMEA	527,435		547,547
Asia-Pacific	540,714		563,995
Total Operating lease right-of-use assets	$	1,405,835	$	1,475,057

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EQUINIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS –- (Continued)

(Unaudited)

13. Subsequent Events

~~On April 15, 2020, the Company entered into a credit agreement which provides for senior unsecured 364-day term loan facilities in an aggregate principal amount~~Declaration of $750.0 million, comprised of $500.0 million available to be borrowed on the closing date (the "Closing Date Facility") and $250.0 million available to be borrowed on or prior to July 14, 2020 (the "Delayed Draw Facility"). On April 15, 2020, Equinix borrowed $391.0 million, as well as €100.0 million or $109.8 million at the exchange rate in effect on that date, under the Closing Date Facility. Borrowings under these term loan facilities must be repaid in full on or prior to April 14, 2021.dividends

On April 18, 2020, the Company entered into an agreement to form a second joint venture in the form of a limited liability partnership with GIC to develop and operate xScale data centers in Asia-Pacific (the “Asia-Pacific Joint Venture”). Upon closing, GIC will contribute cash in exchange for an 80% partnership interest in the Asia-Pacific Joint Venture. The Company will contribute three development sites in Japan to the Asia-Pacific Joint Venture in exchange for a 20% partnership interest in the Asia-Pacific Joint Venture and cash proceeds. The completion of the Asia-Pacific Joint Venture is subject to closing conditions.

On May 6, 2020, the Company repaid a total of $250.0 million under the Revolving Facility, which was outstanding as of March 31, 2020. As a result, the amount available to the Company to borrow under the Revolving Facility was approximately $1.9 billion after the repayment.

~~On May 6, 2020, the Company~~28, 2021, we declared a quarterly cash dividend of ~~$2.66~~$2.87 per share, which is payable on June ~~17, 2020~~16, 2021 to ~~the Company's~~our common stockholders of record as of the close of business on May ~~20, 2020.~~

19, 2021.

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Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations

The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words "believes," "anticipates," "plans," "expects," "intends" and similar expressions are intended to identify forward-looking statements. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a discrepancy include, but are not limited to, those discussed in "Liquidity and Capital Resources" below and "Risk Factors" in Item 1A of Part II of this Quarterly Report on Form 10-Q. All forward-looking statements in this document are based on information available to us as of the date of this Report and we assume no obligation to update any such forward-looking statements.

Our management's discussion and analysis of financial condition and results of operations is intended to assist readers in understanding our financial information from our management's perspective and is presented as follows:

•Overview

•Results of Operations

•Non-GAAP Financial Measures

•Liquidity and Capital Resources

•Contractual Obligations and Off-Balance-Sheet Arrangements

•Critical Accounting Policies and Estimates

•Recent Accounting Pronouncements

Overview

~~Equinix provides~~We provide a global, vendor-neutral data center, interconnection and edge services platform with offerings that aim to enable our customers to reach everywhere, interconnect everyone and integrate everything. Global enterprises, service providers and business ecosystems of industry partners rely on ~~Equinix~~our IBX data centers and expertise around the world for the safe housing of their critical IT equipment and to protect and connect the world's most valued information assets. They also look to Platform Equinix^® for the ability to directly and securely interconnect to the networks, clouds and content that enable today's information-driven global digital economy. ~~Recent Equinix~~Our recent IBX data center openings and acquisitions, as well as xScaleTM data center investments, have expanded our total global footprint to ~~211 IBX and~~229 IBXs, including five xScaleTM data centers and the MC1 data center that are held in unconsolidated joint ventures, across 5563 markets around the world. ~~Equinix offers~~We offer the following solutions:

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•premium data center colocation;

•interconnection and data exchange solutions;

•edge services for deploying networking, security and hardware; and

•remote expert support and professional services.

Our interconnected data centers around the world allow our customers to increase information and application delivery performance to users, and quickly access distributed IT infrastructures and business and digital ecosystems, while significantly reducing costs. ~~The Equinix~~Our global platform and the quality of our IBX data centers, interconnection offerings and edge services have enabled us to establish a critical mass of customers. As more customers choose Platform Equinix, for bandwidth cost and performance reasons it benefits their suppliers and business partners to colocate in the same data centers. This adjacency creates a “network effect” that enables our customers to capture the full economic and performance benefits of our offerings. These partners, in turn, pull in their business partners, creating a "marketplace" for their services. Our global platform enables scalable, reliable and cost-effective interconnection that increases data traffic exchange while lowering overall cost and increasing flexibility. Our focused business model is built on our critical mass of enterprise and service provider customers and the resulting "marketplace" effect. This global platform, combined with our strong financial position, continues to drive new customer growth and bookings.

Historically, our market was served by large telecommunications carriers who have bundled their products and services with their colocation offerings. The data center market landscape has evolved to include private and vendor-neutral multitenant data center ("MTDC") providers, hyperscale cloud providers, managed infrastructure and application hosting providers, and systems integrators. It is estimated that Equinix is one of more than 1,200 companies that provide MTDC offerings around the world. Each of these data center solutions providers can bundle various colocation, interconnection and network offerings and outsourced IT infrastructure solutions. We are able to offer our customers a global platform that reaches 26 countries with the industry’s largest and most active ecosystem of partners in our sites, proven operational reliability, improved application performance and a highly scalable set of offerings.

The cabinet utilization rate represents the percentage of cabinet space billed versus total cabinet capacity, which is used to measure how efficiently we are managing our cabinet capacity. Our cabinet utilization rate varies from market to market among our IBX data centers across ~~the~~our Americas, EMEA and Asia-Pacific regions. Our cabinet utilization rates were approximately ~~79%~~78% and ~~80%, respectively,~~79% as of March 31, 2021 and 2020, ~~and 2019.~~respectively. Excluding the impact of our IBX data center expansion projects that have opened during the last 12 months, our cabinet utilization rate would have increased to approximately ~~81%~~80% as of March 31, ~~2020.~~2021. We continue to monitor the available capacity in each of our selected markets. To the extent we have limited capacity available in a given market, it may limit our ability for growth in that market. We perform demand studies on an ongoing basis to determine if future expansion is warranted in a market. In addition, power and cooling requirements for most customers are growing on a per unit basis. As a result, customers are consuming an increasing amount of power per cabinet. Although we generally do not control the amount of power our customers draw from installed circuits, we have negotiated power consumption limitations with certain high power-demand customers. This increased power consumption has driven us to build out our new IBX data centers to support power and cooling needs twice that of previous IBX data centers. We could face power limitations in our IBX data centers, even though we may have additional physical cabinet capacity available within a specific IBX data center. This could have a negative impact on the available utilization capacity of a given IBX data center, which could have a negative impact on our ability to grow revenues, affecting our financial performance, ~~operating~~ results of operations and cash flows.

~~In 2019, we closed our first joint venture with GIC to develop and operate xScale data centers to~~To serve the needs of the growing hyperscale data center market, ~~in Europe,~~ including ~~large~~the world's largest cloud service providers, ~~(the "EMEA Joint Venture"). In April 2020,~~ we entered into ~~an agreement to form a second~~ joint ~~venture with GIC~~ventures to develop and operate xScaleTM data ~~centers~~centers. In the past two years, we closed our EMEA Joint Venture and Asia-Pacific Joint Venture in ~~Asia-Pacific (the “Asia-Pacific Joint Venture”).~~the form of limited liability partnerships with GIC.

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Strategically, we will continue to look at attractive opportunities to grow our market share and selectively improve our footprint and offerings. As was the case with our recent expansions and acquisitions, our expansion criteria will be dependent on a number of factors, including but not limited to demand from new and existing customers, quality of the design, power capacity, access to networks, clouds and software partners, capacity availability in the current market location, amount of incremental investment required by us in the targeted property, automation capabilities, developer talent pool, lead-time to break even on a free cash flow basis and in-place customers. Like our recent expansions and acquisitions, the right combination of these factors may be attractive to us. Depending on the circumstances, these transactions may require additional capital expenditures funded by upfront cash payments or through long-term financing arrangements in order to bring these properties up to Equinix standards. Property expansion may be in the form of purchases of real property, long-term leasing arrangements or acquisitions. Future purchases, construction or acquisitions may be completed by us or with partners or potential customers to minimize the outlay of cash, which can be significant.

Revenue:

Our business is based on a recurring revenue model comprised of colocation and related interconnection and managed infrastructure offerings. We consider these offerings recurring because our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which is generally one to three years in length. Our recurring revenues have comprised more than 90% of our total revenues during the past three years. In addition, during the past three years, more than 80% of our monthly recurring revenue bookings came from existing customers, contributing to our revenue growth. Our largest customer accounted for approximately 3% of our recurring revenues for both the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020. Our 50 largest customers accounted for approximately 39% of our recurring revenues for ~~both~~ the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

Our non-recurring revenues are primarily comprised of installation services related to a customer's initial deployment and professional services we perform. These services are considered to be non-recurring because they are billed typically once, upon completion of the installation or the professional services work performed. The majority of these non-recurring revenues are typically billed on the first invoice distributed to the customer in connection with their initial installation. However, revenues from installation services are deferred and recognized ratably over the period of the contract term. Additionally, revenue from contract settlements, when a customer wishes to terminate their contract early, is generally treated as a contract modification and recognized ratably over the remaining term of the contract, if any. As a percentage of total revenues, we expect non-recurring revenues to represent less than 10% of total revenues for the foreseeable future.

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Operating Expenses:

Cost of Revenues. The largest components of our cost of revenues are depreciation, rental payments related to our leased IBX data centers, utility costs, including electricity, bandwidth access, IBX data center employees' salaries and benefits, including stock-based compensation, repairs and maintenance, supplies and equipment and security. A majority of our cost of revenues is fixed in nature and should not vary significantly from period to period, unless we expand our existing IBX data centers or open or acquire new IBX data centers. However, there are certain costs that are considered more variable in nature, including utilities and supplies that are directly related to growth in our existing and new customer base. We expect the cost of our utilities, specifically electricity, will generally increase in the future on a per-unit or fixed basis, in addition to the variable increase related to the growth in consumption by our customers. In addition, the cost of electricity is generally higher in the summer months, as compared to other times of the year. To the extent we incur increased utility costs, such increased costs could materially impact our financial condition, results of operations and cash flows. Furthermore, to the extent we incur increased electricity or other costs as a result of either climate change policies or the physical effects of climate change, such increased costs could materially impact our financial condition, results of operations and cash flows.

Sales and Marketing. Our sales and marketing expenses consist primarily of compensation and related costs for sales and marketing personnel, including stock-based compensation, amortization of contract costs, marketing programs, public relations, promotional materials and travel, as well as bad debt expense and amortization of customer relationship intangible assets.

General and Administrative. Our general and administrative expenses consist primarily of salaries and related expenses, including stock-based compensation, accounting, legal and other professional service fees, and other

general corporate expenses, such as our corporate regional headquarters office leases and some depreciation expense on back office systems.

Taxation as a REIT

We elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes ~~("REIT")~~ beginning with our 2015 taxable year. As of March 31, ~~2020,~~2021, our REIT structure included all of our data center operations in the U.S., Canada (with the exception of two data centers), Mexico, Japan, Singapore and ~~the data center operations in~~ EMEA ~~with~~(with the exception of the data centers in Bulgaria, and the United Arab Emirates, and ~~the~~a data center ~~operations outside Amsterdam~~in Ireland and in the ~~Netherlands.~~Netherlands). Our data center operations in other jurisdictions are operated as taxable REIT subsidiaries ("TRSs"). We included our ~~interest~~share of the assets in the EMEA and Asia-Pacific Joint ~~Venture~~Ventures in our REIT structure.

As a REIT, we generally are permitted to deduct from our U.S. federal taxable income the dividends we pay to our stockholders. The income represented by such dividends is not subject to U.S. federal income taxes at the entity level but is taxed, if at all, at the stockholder level. Nevertheless, the income of our TRSs which hold our U.S. operations that may not be REIT compliant is subject to U.S. federal and state corporate income taxes, as applicable. Likewise, our foreign subsidiaries continue to be subject to local income taxes in jurisdictions in which they hold assets or conduct operations, regardless of whether held or conducted through TRSs or through qualified REIT subsidiaries ("QRSs"). We are also subject to a separate U.S. federal corporate income tax on any gain recognized from a sale of a REIT asset where our basis in the asset is determined by reference to the basis of the asset in the hands of a C corporation (such as an asset held by us or a QRS following the liquidation or other conversion of a former TRS). This built-in-gains tax is generally applicable to any disposition of such an asset during the five-year period after the date we first owned the asset as a REIT asset to the extent of the built-in-gain based on the fair market value of such asset on the date we first held the asset as a REIT asset. If we fail to remain qualified for U.S. federal income taxation as a REIT, we will be subject to U.S. federal income taxes at regular corporate income tax rates. In addition, should we realize any gains from "prohibited transactions," we will be subject to tax on this gain at a 100% rate. "Prohibited transactions," for this purpose, are defined as dispositions, at a gain, of inventory or property held primarily for sale to customers in the ordinary course of a trade or business other than dispositions of foreclosure property and other than dispositions excepted by statutory safe harbors. Even if we remain qualified for U.S. federal income taxation as a REIT, we may be subject to some federal, state, local and foreign taxes on our income and property in addition to taxes owed with respect to our TRSs' operations. In particular, while state income tax regimes often parallel the U.S. federal income tax regime for REITs, many states do not completely follow federal rules, and some may not follow them at all.

We continue to monitor our REIT compliance in order to maintain our qualification for U.S. federal income taxation as a REIT. For this and other reasons, as necessary, we may convert some of our data center operations in other countries into the REIT structure in future periods.

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On March ~~18, 2020,~~17, 2021, we paid a quarterly cash dividend of ~~$2.66~~$2.87 per share. On ~~May 6, 2020,~~April 28, 2021, we declared a quarterly cash dividend of ~~$2.66~~$2.87 per share, payable on June ~~17, 2020,~~16, 2021, to our common stockholders of record as of the close of business on May ~~20, 2020.~~19, 2021. We expect the amount of all of our ~~2020~~2021 quarterly distributions and other applicable distributions to equal or exceed our REIT taxable income to be recognized in ~~2020.~~2021.

~~Coronavirus (COVID-19) Update~~

~~In December 2019, a novel strain~~The Impact of ~~coronavirus, referred to as Coronavirus disease 2019, or~~the Ongoing COVID-19 ~~emerged. On February 29, 2020, the WHO raised the COVID-19 threat from high to very high,~~Pandemic on Our Results and on March 11, 2020, the WHO characterized COVID-19 as a global pandemic. The global pandemic and the efforts implemented to address the pandemic, including the issuance of “shelter-in-place” orders and social distancing guidelines, have impacted major economic and financial markets.

In response to the crisis beginning in the first quarter 2020, we have activated our business continuity plans globally with the goal of providing seamless operations throughout our facilities, including provisions for ensuring all data centers remain staffed and fully operational and that our IBXs are equipped with the necessary equipment and supplies. Many of our IBX data centers have been identified as "essential businesses" or "critical infrastructure" by local governments for purposes of remaining open during the COVID-19 pandemic. All of our IBX data centers remain operational at the time of filing of this quarterly report on Form 10-Q. We have implemented precautionary measures to minimize the risk of operational impact and to protect the health and safety of our employees, customers, partners and communities. These include implementing tools such as an appointment-based system to control timing and frequency of visits while also encouraging our customers to leverage our IBX technicians via Smart Hands, our remote operational support service, in order to restrict visits and minimize the number of people and the amount of time spent in our IBX facilities. As a result, in certain circumstances, we are providing free Smart Hands services to the affected customers for a period of time. We have temporarily closed all of our corporate offices and instructed our non-IBX employees across the globe to work from home.

During the three months ended March 31, 2020, the COVID-19 pandemic did not have a material impact on our results of operations. The majority of our revenue is derived from large companies across a diverse set of industries. Although any potential delays in customers' payments could result in a negative impact on our liquidity and revenue in the future, customers that we have identified as operating in sectors more drastically impacted by the COVID-19 pandemic, such as retail, travel, and energy, accounted for less than 3% of our revenue for the quarter ended March 31, 2020. We assessed the realized and potential credit deterioration of our customers due to changes in the macroeconomic environment, considered the potential for payment term revision requests, and modestly increased our allowance for doubtful accounts for accounts receivable.Operations

We are ~~experiencing some construction delays due to governmental action related to~~closely monitoring the COVID-19 pandemic. To date, the construction delays and related added cost are insignificant relative to the overall project duration and budget. All equipment orders for construction projects which are scheduled to be placed in service in 2020, are ordered, and in manufacturing or delivered. We are actively monitoring our vendors and suppliers to evaluate any anticipated changes in equipment availability or delivery timetables. We have redundancies built into our supply chain of vendors and to the best of our ability, we keep stock of critical items on site to ensure repairs can be completed. At this time, we haven’t observed any significant disruption to our IBX data center operations due to supply chain.

~~We incurred one-time cash bonuses and compensation expense of $8.6 million for our IBX employees and other employees to support their work-from-home requirements in March 2020.~~

~~Looking ahead, the full~~ impact of the COVID-19 pandemic on our ~~financial condition~~people and business. Most of our corporate offices remain closed as a result of the pandemic and we have instructed our non-IBX employees in these offices to work from home until further notice. We have announced a phased plan for return-to-office for non-IBX attached sites and have been following this plan to open certain offices with occupancy limits as local conditions allow. Additionally, we continue to limit our employee travel and continue to either postpone or virtualize our global events.

For additional details regarding the impacts and risks to our results of operations ~~remains uncertain~~from the ongoing COVID-19 pandemic, refer to “Results of Operations” section below and will depend on a number of factors, including its impact on our customers, partners and vendors and the impact on, and functioning of, the global financial markets. Our past results may not be indicative of our future performance and historical trends may differ materially.

~~See~~ Part II, Item 1A. Risk Factors ~~for additional information regarding potential risks~~included elsewhere in this Quarterly Report on Form 10-Q. Please also refer to “The Impact of the Ongoing COVID-19 Pandemic on Our Results and Operations” included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our ~~business, financial condition and operating~~2020 Form 10-K as filed on February 19, 2021.

Results of Operations

Our results ~~related to the COVID-19 pandemic.~~

~~2020 Highlights:~~


•	~~In January, we redeemed the remaining $343.7 million principal amount of the 5.375% Senior Notes due 2022. See Note 9 within the Condensed Consolidated Financial Statements~~.

~~In January, we completed the acquisition~~ of ~~three data centers in Mexico from Axtel S.A.B. de C.V. (“Axtel”)~~operations for ~~a total purchase consideration of approximately $189.0 million. See Note 4 within the Condensed Consolidated Financial Statements.~~

In March, we completed the acquisition of Packet Host, Inc. (“Packet”), a leading bare metal automation platform for a total cash purchase price of approximately $290.3 million. See Note 4 within the Condensed Consolidated Financial Statements.

In March 2020, we borrowed a total of $250.0 million under our Revolving Facility. As of March 31, 2020, we had an additional $1.7 billion available for borrowing under our Revolving Facility. In May, we repaid the $250.0 million outstanding under our Revolving Facility. As a result, the amount available to borrow under the Revolving Facility was approximately $1.9 billion after the repayment. See Note 9 and Note 13 within the Condensed Consolidated Financial Statements.

~~During~~ the three months ended March 31, 2021 include the results of operations from 12 data center sites acquired from Bell across Canada from October 1, 2020 we sold 162,530 shares of common stock for approximately $101.8 million in proceeds, net of payment of commissions to the sales agents, under our ATM program. See Note 11 within the Condensed Consolidated Financial Statements.

In April, we entered into a credit agreement which provides for senior unsecured 364-day term loan facilities in an aggregate principal amount of $750.0 million. On April 15, 2020, we borrowed $391.0 million, as well as €100.0 million or $109.8 million at the exchange rate in effect on that date. See Note 13 within the Condensed Consolidated Financial Statements.

~~In April, we entered into an agreement to form a second joint venture in the form of a limited liability partnership with GIC to develop~~ and ~~operate xScale~~one additional data ~~centers in Asia-Pacific (the “Asia-Pacific Joint Venture”). See Note 13 within the Condensed Consolidated Financial Statements.~~

~~Results of Operations~~

center acquired from Bell from November 2, 2020. Our results of operations for the three months ended March 31, 2020 include the results of operations from ~~the acquisitions of~~ Packet ~~Host, Inc.~~acquired from March 2, 2020 and three data centers in Mexico acquired from Axtel ~~S.A.B. de C.V.~~ from January 8, 2020.

In order to provide a framework for assessing our performance excluding the impact of foreign currency fluctuations, we supplement the year-over-year actual change in ~~operating~~ results of operations with comparative changes on a constant currency basis. Presenting constant currency results of operations is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below for further discussion.

Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020

Revenues. Our revenues for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were generated from the following revenue classifications and geographic regions (dollars in thousands):


	Three Months Ended March 31,								% Change
	2021		%		2020		%		Actual		Constant Currency
Americas:
Recurring revenues	$	692,869	43	%	$	632,632	44	%	10	%	11	%
Non-recurring revenues	33,071		2	%	29,273		2	%	13	%	14	%
	725,940		45	%	661,905		46	%	10	%	11	%
EMEA:
Recurring revenues	487,082		31	%	443,474		31	%	10	%	9	%
Non-recurring revenues	31,635		2	%	35,435		2	%	(11)	%	(18)	%
	518,717		33	%	478,909		33	%	8	%	7	%
Asia-Pacific:
Recurring revenues	330,982		21	%	285,588		20	%	16	%	10	%
Non-recurring revenues	20,425		1	%	18,140		1	%	13	%	(2)	%
	351,407		22	%	303,728		21	%	16	%	9	%
Total:
Recurring revenues	1,510,933		95	%	1,361,694		95	%	11	%	10	%
Non-recurring revenues	85,131		5	%	82,848		5	%	3	%	(3)	%
	$	1,596,064	100	%	$	1,444,542	100	%	10	%	9	%

Three Months Ended March 31, % Change
2020 % 2019 % Actual
Constant
Currency
Americas:
Recurring revenues $ 632,632
44 % $ 606,310
44 % 4 % 6 %
Non-recurring revenues 29,273
2 % 38,056
3 % (23 )% (22 )%
661,905
46 % 644,366
47 % 3 % 4 %
EMEA:
Recurring revenues 443,474
31 % 400,237
29 % 11 % 11 %
Non-recurring revenues 35,435
2 % 34,423
3 % 3 % 6 %
478,909
33 % 434,660
32 % 10 % 11 %
Asia-Pacific:
Recurring revenues 285,588
20 % 268,281
20 % 6 % 8 %
Non-recurring revenues 18,140
1 % 15,911
1 % 14 % 17 %
303,728
21 % 284,192
21 % 7 % 9 %
Total:
Recurring revenues 1,361,694
95 % 1,274,828
93 % 7 % 8 %
Non-recurring revenues 82,848
5 % 88,390
7 % (6 )% (4 )%
$ 1,444,542
100 % $ 1,363,218
100 % 6 % 7 %

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Revenues

(dollars in thousands)

Americas Revenues. During the three months ended March 31, ~~2020,~~2021, Americas revenue increased by ~~3% (4%~~10% (11% on a constant currency basis). Growth in Americas revenues was primarily due to:

•approximately ~~$8.1~~$39.4 million of incremental revenues from the Packet and ~~Axtel~~Bell acquisitions;

•$~~7.0~~10.0 million of incremental revenues generated from our recently-opened IBX data centers or IBX data center expansions; and

•an increase in orders from both our existing customers and new customers during the period.

~~This increase was partially offset by:~~

~~$8.8 million of lower non-recurring revenues, primarily due to a decrease in equipment resale activities.~~

EMEA Revenues. During the three months ended March 31, ~~2020,~~2021, EMEA revenue increased by ~~10% (11%~~8% (7% on a constant currency basis). Growth in EMEA revenues was primarily due to:

•approximately ~~$22.7 million of incremental revenues generated from our recently-opened IBX data centers or IBX data center expansions;~~

~~an increase in orders from both our existing customers and new customers during the period; and~~

~~a net increase of $10.8 million of realized cash flow hedge gains from foreign currency forward contracts.~~

~~Asia-Pacific Revenues.~~ ~~During the three months ended March 31, 2020, Asia-Pacific revenue increased by 7% (9% on a constant currency basis). Growth in Asia-Pacific revenue was primarily due to:~~

~~approximately $7.9~~$14.7 million of incremental revenues generated from our recently-opened IBX data centers or IBX data center expansions; and

•an increase in orders from both our existing customers and new customers during the period.

The increase was partially offset by a net decrease of $33.8 million of realized cash flow hedge gains from foreign currency forward contracts

Asia-Pacific Revenues. During the three months ended March 31, 2021, Asia-Pacific revenue increased by 16% (9% on a constant currency basis). Growth in Asia-Pacific revenue was primarily due to:

•approximately $7.7 million of incremental revenues generated from our recently-opened IBX data centers or IBX data center expansions; and

•an increase in orders from both our existing customers and new customers during the period.

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Cost of Revenues. Our cost of revenues for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were split among the following geographic regions (dollars in thousands):


	Three Months Ended March 31,								% Change					Three Months Ended March 31,								% Change
	2020		%		2019		%		Actual		Constant Currency			2021		%		2020		%		Actual		Constant Currency
Americas	$	295,112	40	%	$	285,659	42	%	3	%	5	%	Americas	$	319,942	39	%	$	295,112	40	%	8	%	10	%
EMEA	267,662		36	%	242,454		35	%	10	%	11	%	EMEA	297,093		37	%	267,662		36	%	11	%	7	%
Asia-Pacific	173,508		24	%	153,917		23	%	13	%	15	%	Asia-Pacific	194,182		24	%	173,508		24	%	12	%	6	%
Total	$	736,282	100	%	$	682,030	100	%	8	%	9	%	Total	$	811,217	100	%	$	736,282	100	%	10	%	8	%

Cost of Revenues

(dollars in thousands; percentages indicate expenses as a percentage of revenues)

Americas Cost of Revenues. During the three months ended March 31, ~~2020,~~2021, Americas cost of revenues increased by ~~3% (5%~~8% (10% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to:

•approximately ~~$8.5~~$31.6 million of incremental cost of revenues from the Packet and ~~Axtel~~Bell acquisitions; ~~and~~

•$~~6.1~~7.5 million of higher ~~compensation~~depreciation driven by IBX data center expansions; and

•$3.9 million of higher costs ~~including~~incurred, primarily due to a vendor rebate credit in the first quarter of 2020 and to support growth in EIS revenues.

This increase was partially offset by:

•$15.0 million decrease in utilities, primarily due to gains from wind farm settlements in Texas and Oklahoma during a period of unexpected weather conditions; and

•$3.5 million decrease in salaries ~~bonuses~~ and stock-based compensation, primarily due to ~~headcount growth and~~the additional bonuses paid to IBX employees in the first quarter of 2020 for supporting our business during the COVID-19 pandemic.

~~This increase was partially offset by:~~

~~$5.2 million of lower costs from decreased equipment resale activities, primarily in the U.S.~~

EMEA Cost of Revenues. During the three months ended March 31, ~~2020,~~2021, EMEA cost of revenues increased by ~~10% (11%~~11% (7% on a constant currency basis). The increase in our EMEA cost of revenues was primarily due to:

•$~~10.8~~15.6 million of higher depreciation expenses driven by IBX data center expansions in ~~London~~the Netherlands, Switzerland and ~~Frankfurt;~~Germany;

•$~~6.6~~9.3 million of higher utilities costs, primarily driven by expansions and higher utility usage in Germany and France;

•$5.0 million of higher rent and facilities costs and repairs and maintenance expense, primarily in the Netherlands and France;

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•$4.4 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount ~~growth~~growth; and ~~additional bonuses~~

•$3.8 million increase in other cost of revenue, primarily due to ~~IBX employees for supporting our business during the COVID-19 pandemic;~~higher customer costs in France.

This increase was partially offset by:

•$~~6.0~~13.5 million of ~~higher utilities costs driven by increased utility usage to support IBX data center expansions and utility price increases, primarily in Germany, France and the Netherlands;~~

~~a net increase of $4.2 million of~~lower realized cash flow hedge losses from foreign currency forward contracts; and

•$~~3.9~~3.7 million decrease of ~~higher rent and facilities costs and repairs and maintenance expense.~~

~~This increase was partially offset by:~~

~~$6.9 million of lower costs from decreased equipment resale activities,~~third party services, primarily in ~~Germany~~the Netherlands and ~~Sweden.~~

the United Kingdom.

Asia-Pacific Cost of Revenues. During the three months ended March 31, ~~2020,~~2021, Asia-Pacific cost of revenues increased by ~~13% (15%~~12% (6% on a constant currency basis). The increase in our Asia-Pacific cost of revenues was primarily due to:

•$~~10.5~~9.2 million of higher costs of sales incurred for customer installations; and

•$7.8 million of higher depreciation expense, primarily from IBX data center expansions in ~~Singapore, Japan, and Australia;~~

~~$3.8 million of higher utilities costs and rent and facility costs, primarily driven by expansions and higher utility usage in~~ Hong Kong and ~~Singapore; and~~

$3.3 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth and additional bonuses to IBX employees for supporting our business during the COVID-19 pandemic.Australia.

We expect Americas, EMEA and Asia-Pacific cost of revenues to increase ~~as we continue to grow~~in line with the growth of our business, including from the impact of acquisitions.

Sales and Marketing Expenses. Our sales and marketing expenses for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were split among the following geographic regions (dollars in thousands):


	Three Months Ended March 31,								% Change					Three Months Ended March 31,								% Change
	2020		%		2019		%		Actual		Constant Currency			2021		%		2020		%		Actual		Constant Currency
Americas	$	113,282	63	%	$	105,038	62	%	8	%	9	%	Americas	$	116,279	64	%	$	113,282	63	%	3	%	3	%
EMEA	42,975		24	%	41,202		24	%	4	%	6	%	EMEA	42,423		23	%	42,975		24	%	(1)	%	(4)	%
Asia-Pacific	24,193		13	%	23,475		14	%	3	%	5	%	Asia-Pacific	24,125		13	%	24,193		13	%	—	%	(6)	%
Total	$	180,450	100	%	$	169,715	100	%	6	%	7	%	Total	$	182,827	100	%	$	180,450	100	%	1	%	—	%

Sales and Marketing Expenses

(dollars in thousands; percentages indicate expenses as a percentage of revenues)

Americas Sales and Marketing Expenses. During the three months ended March 31, ~~2020,~~2021, Americas sales and marketing expenses increased by ~~8% (9%~~3% (and also 3% on a constant currency basis). The increase in our Americas sales and marketing expenses was primarily due to:

•$~~6.7~~4.3 million of higher amortization costs, primarily related to customer relationship intangibles acquired from our recent acquisitions; and

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•$3.8 million of higher compensation costs, including sales compensation, salaries and stock-based compensation, primarily due to additional ~~stock-based~~ compensation expenses incurred related to ~~the Packet acquisition~~our recent acquisitions and overall headcount ~~growth; and~~

~~$3.4 million of higher advertising and promotions expenses.~~growth.

This increase was partially offset ~~by:~~

~~$1.0~~by $4.3 million of lower travel and entertainment ~~expenses.~~

expenses resulting from travel restrictions imposed in response to the ongoing COVID-19 pandemic.

EMEA Sales and Marketing Expenses. Our EMEA sales and marketing expense did not materially change during the three months ended March 31, ~~2020~~2021 as compared to the three months ended March 31, ~~2019.~~2020.

Asia-Pacific Sales and Marketing Expenses.Our Asia-Pacific sales and marketing expense did not materially change during the three months ended March 31, ~~2020~~2021 as compared to the three months ended March 31, ~~2019.~~2020.

We anticipate that we will continue to invest in Americas, EMEA and Asia-Pacific sales and marketing initiatives and expect our Americas, EMEA and Asia-Pacific sales and marketing expenses to increase ~~as we grow~~in line with the growth of our business. We also expect travel and entertainment expenses to increase once travel restrictions that were imposed in response to the COVID-19 pandemic are reduced. Additionally, given that certain global sales and marketing functions are located within the U.S., we expect Americas sales and marketing expenses as a percentage of revenues to be higher than our other regions.

General and Administrative Expenses. Our general and administrative expenses for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were split among the following geographic regions (dollars in thousands):


	Three Months Ended March 31,								% Change					Three Months Ended March 31,								% Change
	2020		%		2019		%		Actual		Constant Currency			2021		%		2020		%		Actual		Constant Currency
Americas	$	194,026	74	%	$	147,138	69	%	32	%	33	%	Americas	$	206,195	68	%	$	194,026	74	%	6	%	7	%
EMEA	41,856		16	%	45,342		21	%	(8	)%	(9	)%	EMEA	58,981		20	%	41,856		16	%	41	%	40	%
Asia-Pacific	25,715		10	%	22,566		10	%	14	%	16	%	Asia-Pacific	36,280		12	%	25,715		10	%	41	%	36	%
Total	$	261,597	100	%	$	215,046	100	%	22	%	22	%	Total	$	301,456	100	%	$	261,597	100	%	15	%	15	%

General and Administrative Expenses

(dollars in thousands; percentages indicate expenses as a percentage of revenues)

Americas General and Administrative Expenses. During the three months ended March 31, ~~2020,~~2021, Americas general and administrative expenses increased by ~~32% (33%~~6% (7% on a constant currency basis). The increase in our Americas general and administrative expenses was primarily due to:

•$~~29.2~~8.6 million of higher depreciation expense associated with systems to support the integration and growth of our business and increase in IT projects; and

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•$5.0 million of higher compensation costs, including salaries, bonuses and stock-based compensation, ~~primarily~~partially due to additional ~~stock-based~~ compensation ~~expense~~expenses incurred related to ~~the Packet acquisition,~~our recent acquisitions, higher payroll taxes ~~higher corporate bonus payment~~ and overall headcount ~~growth;~~growth.

~~$6.1~~The increase was partially offset by $3.5 million ~~of higher consulting~~lower travel and entertainment expenses resulting from travel restrictions imposed in ~~support of our business growth;~~

~~$4.5 million of higher office expenses due~~response to ~~additional software and support services; and~~

~~$3.6 million of higher depreciation expense associated with~~ the ~~implementation of certain systems to support the integration and growth of our business.~~ongoing COVID-19 pandemic.

EMEA General and Administrative Expenses.During the three months ended March 31, ~~2020,~~2021, EMEA general and administrative expenses ~~decreased~~increased by ~~8% (9%~~41% (40% on a constant currency basis). The ~~decrease~~increase in our EMEA general and administrative expenses was primarily due to:

~~a net decrease of $6.4 million in other operating expenses due to the favorable determination of a legal claim.~~

~~This decrease was partially offset by:~~

•$~~2.1~~11.6 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount ~~growth.~~growth; and

•$6.9 million of higher other operating expenses, primarily due to the prior year having lower costs attributable to a favorable legal settlement in the first quarter of 2020.

Asia-Pacific General and Administrative Expenses. During the three months ended March 31, ~~2020,~~2021, Asia-Pacific general and administrative expenses increased by ~~14% (16%~~41% (36% on a constant currency basis). The increase in our Asia-Pacific general and administrative ~~expense~~expenses was primarily due to:

•$~~2.7~~5.5 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount ~~growth.~~growth; and

•$3.2 million of higher rent and facility costs primarily due to additional rent in Singapore.

Going forward, although we are carefully monitoring our spending, we expect Americas, EMEA and Asia-Pacific general and administrative expenses to increase as we continue to further scale our operations to support our growth, including investments in our back office systems and investments to maintain our qualification for taxation as a REIT and to integrate recent acquisitions. We also expect travel and entertainment expenses to increase once travel restrictions that were imposed in response to the COVID-19 pandemic are reduced. Additionally, given that our corporate headquarters is located within the U.S., we expect Americas general and administrative expenses as a percentage of revenues to continue to be higher than our other regions.

Transaction Costs. During the three months ended March 31, 2021, we did not record a significant amount of transaction costs. During the three months ended March 31, 2020, we recorded transaction costs of $11.5 million, primarily related to costs incurred in connection with the Packet and Axtel acquisitions. ~~During the three months ended March 31, 2019, we did not record a significant amount of transaction costs.~~

~~Impairment Charge.~~ During the three months ended March 31, 2020, we did not record any impairment charges. During the three months ended March 31, 2019, we recorded impairment charges of $14.4 million in the Americas region as a result of the fair value adjustment for the New York 12 data center, which was classified as a held for sale asset as of March 31, 2019.

Loss on Asset Sales. During the three months ended March 31, 2021 and March 31, 2020, we did not record a significant amount of ~~loss on asset sales. During the three months ended March 31, 2019, we did not record any gain or~~ loss on asset sales.

Income from Operations. Our income from operations for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 was split among the following geographic regions (dollars in thousands):


	Three Months Ended March 31,								% Change					Three Months Ended March 31,								% Change
	2020		%		2019		%		Actual		Constant Currency			2021		%		2020		%		Actual		Constant Currency
Americas	$	47,308	19	%	$	90,011	32	%	(47	)%	(46	)%	Americas	$	81,565	27	%	$	47,308	19	%	72	%	77	%
EMEA	126,004		50	%	105,007		38	%	20	%	19	%	EMEA	119,785		41	%	126,004		50	%	(5)	%	(2)	%
Asia-Pacific	80,172		31	%	84,490		30	%	(5	)%	(3	)%	Asia-Pacific	96,312		32	%	80,172		31	%	20	%	10	%
Total	$	253,484	100	%	$	279,508	100	%	(9	)%	(9	)%	Total	$	297,662	100	%	$	253,484	100	%	17	%	17	%

Americas Income from Operations. During the three months ended March 31, ~~2020,~~2021, Americas income from operations decreased by 47% (46% on a constant currency basis). The decrease in our Americas income from operations was primarily due to higher operating expenses as a percentage of revenues. Namely, a large increase in general and administrative expenses was primarily driven by higher compensation costs and consulting expenses, which were in part related to the Packet and Axtel acquisitions, along with higher office expenses and depreciation expense.

~~EMEA Income from Operations.~~ ~~During the three months ended March 31, 2020, EMEA~~ income from operations increased by ~~20% (19%~~72% (77% on a constant currency basis). The increase in our ~~EMEA~~Americas income from operations was primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth, as described above, as well as lower ~~general and administrative~~operating expenses as a percentage of ~~revenues.~~revenues, including lower utilities expenses, and lower transaction costs due to minimal acquisition activity in the first quarter of 2021.

EMEA Income from Operations. During the three months ended March 31, 2021, EMEA income from operations decreased by 5% (2% on a constant currency basis). The decrease in our EMEA income from operations was primarily due to higher operating expenses as a percentage of revenues, which included higher depreciation expense driven by expansion activity and an increase in general and administrative expenses primarily driven by higher compensation costs.

Asia-Pacific Income from Operations. During the three months ended March 31, ~~2020,~~2021, Asia-Pacific income from operations ~~decreased~~increased by ~~5% (3%~~20% (10% on a constant currency basis). The ~~decrease~~increase in our Asia-Pacific income from operations was primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth, as described above, as well as lower cost of revenues as a percentage of ~~revenue, primarily due to an increase in depreciation expense, rent and facility costs, and utilities costs due to IBX expansion activity.~~revenues.

Interest Income. Interest income was ~~$4.3~~$0.7 million and ~~$4.2~~$4.3 million, respectively, for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020. The average annualized yield for the three months ended March 31, ~~2020~~2021 was ~~1.11%~~0.17% versus ~~1.49%~~1.11% for the three months ended March 31, ~~2019.~~2020.

Interest Expense. Interest expense decreased to $89.7 million for the three months ended March 31, 2021 from $107.3 million for the three months ended March 31, 2020, ~~from $122.8 million for the three months ended March 31, 2019,~~ primarily attributable to the tender and redemption of the ~~5.375%~~2.875% Euro Senior Notes due ~~2022, 5.375%~~2024, 5.875% Senior Notes due ~~2023, and 5.750%~~2026, 2.875% Euro Senior Notes due 2025, and the 2.875% Euro Senior Notes due 2026. This decrease was partially offset by the issuance of the ~~2.625%~~1.250% Senior Notes due ~~2024, 2.900%~~2025, 1.800% Senior Notes due ~~2026 and 3.200%~~2027, 2.150% Senior Notes due ~~2029.~~2030, 3.000% Senior Notes due 2050, 1.000% Senior Notes due 2025, 1.550% Senior Notes due 2028, 2.950% Senior Notes due 2051, 0.250% Euro Senior Notes due 2027 and 1.000% Euro Senior Notes due 2033. During the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, we capitalized ~~$6.0~~$6.1 million and ~~$9.9~~$6.0 million, respectively, of interest expense to construction in progress.

Other Income (Expense). We recorded net other ~~income~~expense of ~~$5.2~~$7.0 million and net other ~~expense~~income of ~~$0.2~~$5.2 million, respectively, for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020. Other income and expense is primarily comprised of foreign currency exchange gains and losses during the periods.

Loss on Debt Extinguishment. We recorded a loss on debt extinguishment of $13.1 million and $6.4 million during the three months ended March 31, 2021 and 2020 ~~primarily~~ due to the redemption of the ~~remaining balance of the~~2.875% Euro Senior Notes due 2026 and 5.375% Senior Notes due ~~2022. We did not record a significant amount of loss on debt extinguishment during the three months ended March 31, 2019.~~2022, respectively.

Income Taxes. We operate as a REIT for U.S. federal income tax purposes. As a REIT, we are generally not subject to U.S. federal ~~and state~~ income taxes on our taxable income distributed to stockholders. We intend to distribute or have distributed the entire taxable income generated by the operations of our REIT and QRSs for the tax ~~year ended~~years ending December 31, ~~2020~~2021 and ~~the tax year ended December 31, 2019,~~2020, respectively. As such, other than tax on built-in-gains recognized, state income taxes, and foreign income and withholding taxes, as applicable, no provision for ~~U.S. federal~~ income taxes has been included for ~~the~~our REIT and QRSs ~~has been included~~ in the accompanying condensed consolidated financial statements for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

We have made TRS elections for some of our subsidiaries in and outside the U.S. In general, a TRS may provide services that ~~may~~would otherwise be considered impermissible for REITs to provide and may hold assets that may not be REIT compliant.

U.S. income taxes for the TRS entities located in the U.S. and foreign income taxes for our foreign operations regardless of whether the foreign operations are operated as QRSs or TRSs have been accrued, as necessary, for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, we recorded ~~$30.2~~$32.6 million and ~~$42.6~~$30.2 million of income tax expense, respectively. Our effective tax rates were ~~20.2%~~17.3% and ~~26.6%~~20.2% for the three months ended March 31, 2021 and 2020, ~~and 2019,~~ respectively.

Adjusted EBITDA. Adjusted EBITDA is a key factor in how we assess the operating performance of our segments and develop regional growth strategies such as IBX data center expansion decisions. We define adjusted EBITDA as income or loss from operations excluding depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs and gain or loss on asset sales. See "Non-GAAP Financial Measures" below for more information about adjusted EBITDA and a reconciliation of adjusted EBITDA to income or loss from operations. Our adjusted EBITDA for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 was split among the following geographic regions (dollars in thousands):

Americas Adjusted EBITDA. During the three months ended March 31, ~~2020,~~2021, Americas adjusted EBITDA ~~decreased~~increased by ~~5% (4%~~17% (19% on a constant currency basis). The ~~decrease~~increase in our Americas adjusted EBITDA was primarily due to ~~the increase in cash compensation expenses, consulting expenses and office expenses.~~

~~EMEA Adjusted EBITDA.~~ ~~During the three months ended March 31, 2020, EMEA adjusted EBITDA increased by 16% (and also 16% on a constant currency basis). The increase in our EMEA adjusted EBITDA was primarily due to~~

EMEA Adjusted EBITDA. During the three months ended March 31, 2021, EMEA adjusted EBITDA increased by 6% (3% on a constant currency basis). The increase in ~~general~~our EMEA adjusted EBITDA was primarily due to higher revenues as a result of our IBX data center expansion activity and ~~administrative expense.~~organic growth as described above, as well as lower sales and marketing expenses as a percentage of revenues.

Asia-Pacific Adjusted EBITDA. During the three months ended March 31, ~~2020,~~2021, Asia-Pacific adjusted EBITDA increased by 5%15% (7% on a constant currency basis). The increase in our Asia-Pacific adjusted EBITDA was primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth as described ~~above.~~above, as well as lower cost of revenues and sales and marketing expenses as a percentage of revenues.

We provide all information required in accordance with GAAP, but we believe that evaluating our ongoing ~~operating~~ results of operations may be difficult if limited to reviewing only GAAP financial measures. Accordingly, we use non-GAAP financial measures to evaluate our operations.

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. We have presented such non-GAAP financial measures to provide investors with an additional tool to evaluate our ~~operating~~ results of operations in a manner that focuses on what management believes to be our core, ongoing business operations. We believe 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 ability to perform in subsequent periods. We believe that if we 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 us 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.

Our primary non-GAAP financial measures, adjusted EBITDA and adjusted funds from operations ("AFFO"), exclude depreciation expense as these charges primarily relate to the initial construction costs of our IBX data centers and do not reflect our current or future cash spending levels to support our business. Our 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 we may incur initial construction costs in future periods with respect to additional IBX data centers, and future capital expenditures remain minor relative to our initial investment. This is a trend we expect to continue. In addition, depreciation is also based on the estimated useful lives of our IBX data centers. These estimates could vary from actual performance of the asset, are based on historical costs incurred to build out our IBX data centers and are not indicative of current or expected future capital expenditures. Therefore, we exclude depreciation from our ~~operating~~ results of operations when evaluating our operations.

In addition, in presenting adjusted EBITDA and AFFO, we exclude amortization expense related to acquired intangible assets. Amortization expense is significantly affected by the timing and magnitude of our 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. We exclude accretion expense, both as it relates to asset retirement obligations as well as accrued restructuring charge liabilities, as these expenses represent costs which we believe are not meaningful in evaluating our current operations. We exclude stock-based compensation expense, as it can vary significantly from period to period based on share price, the timing, size and nature of equity awards. As such, we, and many investors and analysts, exclude stock-based compensation expense to compare our ~~operating~~ results of operations with those of other companies. We also exclude restructuring charges. The restructuring charges relate to our decisions to exit leases for excess space adjacent to several of our IBX data centers, which we did not intend to build out, or our decision to reverse such restructuring charges. We also exclude 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. We also exclude 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, we exclude transaction costs from AFFO and adjusted EBITDA to allow more comparable comparisons of our financial results to our historical operations. The transaction costs relate to costs we incur in connection with business combinations and the formation of joint ventures, including advisory, legal, accounting, valuation, and other professional or consulting fees. Such charges generally are not relevant to assessing ~~the~~our long-term ~~performance of the company.~~performance. In addition, the frequency and amount of such charges vary significantly based on the size and timing of the transactions. Management believes items such as restructuring charges, impairment charges, gain or loss on asset sales and transaction costs are non-core transactions; however, these types of costs may occur in future periods.

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

Our adjusted EBITDA results have improved each year in total dollars due to the improved operating results discussed earlier in "Results of Operations", as well as the nature of our business model consisting of a recurring revenue stream and a cost structure which has a large base that is fixed in nature also discussed earlier in "Overview".

Funds from Operations ("FFO") and AFFO

We use FFO and AFFO, which are non-GAAP financial measures commonly used in the REIT industry. FFO is calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts. FFO represents net income (loss), excluding gain (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.

In presenting AFFO, we exclude certain items that we believe are not good indicators of our current or future operating performance. AFFO represents FFO excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, restructuring charges, impairment charges, transaction 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 (loss) on debt extinguishment, an income tax expense adjustment, recurring capital expenditures, net income (loss) from discontinued operations, net of tax, and adjustments

Our FFO and AFFO were as follows (in thousands):

Our AFFO results have improved due to the improved operating results discussed earlier in "Results of Operations," as well as due to the nature of our business model which consists of a recurring revenue stream and a cost structure which has a large base that is fixed in nature as discussed earlier in "Overview."

Constant Currency Presentation

Our revenues and certain operating expenses (cost of revenues, sales and marketing and general and administrative expenses) from our international operations have represented and will continue to represent a significant portion of our total revenues and certain operating expenses. As a result, our revenues and certain operating expenses have been and will continue to be affected by changes in the U.S. dollar against major international currencies. During the three months ended March 31, ~~2020~~2021 as compared to the same period in ~~2019,~~2020 the U.S. dollar was weaker relative to the Australian dollar, Euro, British Pound, Singapore dollar and Japanese Yen, which resulted in a favorable foreign currency impact on revenue, operating income and adjusted EBITDA, and an unfavorable foreign currency impact on operating expenses. During the three months ended March 31, 2021 as compared to the same period in 2020, the U.S. dollar was stronger relative to the Brazilian real, ~~Euro, British Pound, Singapore dollar and Australian dollar,~~ which resulted in an unfavorable foreign currency impact on revenue, operating income and adjusted EBITDA, and a favorable foreign currency impact on operating expenses. In order to provide a framework for assessing how each of our business segments performed excluding the impact of foreign currency fluctuations, we present period-over-period percentage changes in our revenues and certain operating expenses on a constant currency basis in addition to the historical amounts as reported. Our constant currency presentation excludes the impact of our foreign currency cash flow hedging activities. Presenting constant currency results of operations 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, we have presented this non-GAAP financial measure to provide investors with an additional tool to evaluate our ~~operating results.~~results of operations. To present this information, our current period revenues and certain operating expenses from entities reporting in currencies other than the U.S. dollar are converted into U.S. dollars at constant exchange rates rather than the actual exchange rates in effect during the respective periods (i.e. average rates in effect for the three months ended March 31, ~~2019~~2020 are used as exchange rates for the three months ended March 31, ~~2020~~2021 when comparing the three months ended March 31, ~~2020~~2021 with the three months ended March 31, ~~2019)~~2020).

As of March 31, ~~2020,~~2021, our total indebtedness was comprised of debt and financing obligations totaling ~~$11.8~~$13.3 billion consisting of:

During the three months ended March 31, ~~2020,~~2021, we completed the following significant financing activities:

As of March 31, ~~2020,~~2021, we had ~~$1,197.2 million~~$1.8 billion of cash, cash equivalents and short-term investments. We increased our borrowing under the revolving credit facility to preserve our financial flexibility and to strengthen our cash position in light of the current disruption and uncertainty in the global markets resulting from the outbreak of the COVID-19 pandemic. In addition to our cash and investment portfolio, we had approximately ~~$1.7~~$1.9 billion of additional liquidity available to us from our $2.0 billion revolving facility ~~$197.5 million of shares of our common stock available for sale under our ATM Program~~ and general access to both public and private debt and the equity capital markets. ~~On April 15, 2020,~~We also have additional liquidity available to us from our ATM program, under which we ~~also entered into a credit agreement that provides for senior unsecured 364-day term loan facilities~~may offer and sell from time to time our common stock in ~~an aggregate principal amount of $750.0 million. On April 15, 2020, we borrowed $391.0 million, as well as €100.0 million or $109.8 million at~~"at the ~~exchange rate in effect on that~~market" transactions. No sales have been made to date under ~~these facilities. On May 6,~~our 2020 ATM program, which allows for aggregate sales of our common stock of up to $1.5 billion.

~~Customer~~may pursue, customer collections are our primary source of ~~cash, in addition to any further financing activity we may pursue. While we~~cash. We believe we have a strong customer base, and have continued to experience relatively strong collections, if the current market conditions were to deteriorate, some of our customers may have difficulty paying us and we may experience increased churn in our customer base, including reductions in their commitments to us, all of which could have a material adverse effect on our liquidity. Additionally, we may pursue additional expansion opportunities, primarily the build out of new IBX data centers, in certain of our existing markets which are at or near capacity within the next year, as well as potential acquisitions and joint ventures.

collections. We believe we have sufficient cash, coupled with anticipated cash generated from operating activities and external financing sources, to meet our operating requirements, including repayment of the current portion of our debt as it becomes due, distribution of dividends and completion of our publicly-announced acquisition and expansion projects. ~~However,~~We also believe that our financial resources will allow us to manage future possible impact of the ongoing COVID-19 pandemic on our business operations for the foreseeable future, which could include reductions in revenue and delays in payments from customers and partners.

As the impact of the COVID-19 pandemic continues to evolve and if the current market conditions were to deteriorate further, some of our customers may have difficulty paying us which will adversely affect our liquidity. In addition, we may be unable to secure additional financing or any such additional financing may only be available to us on unfavorable terms. We will continue to evaluate our operating requirements and financial ~~position~~resources in light of future developments, ~~particularly~~including those relating to the ongoing COVID-19 pandemic.

Operating Activities

Cash provided by our operations is generated by colocation, interconnection, managed infrastructure and other revenues. Our primary use of cash from our operating activities includes compensation and related costs, interest payments, other general corporate expenditures and taxes. Net cash provided by operating activities ~~increased~~decreased from the three months ended March 31, ~~2019~~2020 to the three months ended March 31, ~~2020~~2021 primarily due to ~~improved operating results offset~~increases in cash paid for settlement of foreign currency forward contracts, largely driven by ~~timing~~a general weakening of ~~customers' payments and increases in~~the U.S. Dollar, cash paid for cost of revenues, operating expenses and income ~~taxes.~~taxes partially offset by improved results of operations.

Investing Activities

The net cash used in investing activities for the three months ended March 31, 2021 was primarily due to capital expenditures of $563.6 million as a result of our expansion activity, purchases of real estate of $53.7 million, and purchases of investments of $22.4 million, partially offset by proceeds from sales of investments of $4.1 million. The net cash used in investing activities for the three months ended March 31, 2020 was primarily due to capital expenditures of $400.9 million as a result of our expansion activity, purchases of real estate of $36.4 million, business acquisitions of Packet and Axtel for $478.3 million, and purchases of investments of $44.8 million, partially offset by proceeds from sales of investments of $5.9 million. The net cash used in investing activities for the three months ended March 31, 2019 was primarily due to capital expenditures of $364.0 million as a result of our expansion activity, purchase of certificates of deposit of $9.3 million, and purchases of real estate of $5.7 million, partially offset by proceeds from sales of investments of $0.5 million.

We anticipate our IBX data center expansion construction activity will be similar or increase from our ~~2019~~2020 levels. If the opportunity to expand is greater than planned and we have sufficient funding to pursue such expansion opportunities, we may further increase the level of capital expenditure to support this growth as well as pursue additional business and real estate acquisitions or joint ventures.

Financing Activities

Contractual Obligations and Off-Balance-Sheet Arrangements

We lease a majority of our IBX data centers and certain equipment under long-term lease agreements. The following represents our debt maturities, financings, leases and other contractual commitments as of March 31, ~~2020~~2021 (in thousands):


	2021 (9 months remaining)		2022		2023		2024		2025		Thereafter		Total
Term loans and other loans payable (1)	$	59,968	$	1,214,144	$	6,778	$	6,322	$	4,665	$	19,804	$	1,311,681
Senior notes (1)	150,000		—		—		1,000,000		1,200,000		7,590,850		9,940,850
Interest (2)	213,752		264,555		244,656		244,474		218,005		1,252,448		2,437,890
Finance leases (3)	183,906		231,600		226,851		224,965		221,551		2,084,622		3,173,495
Operating leases (3)	139,653		196,704		181,741		168,996		160,384		1,037,936		1,885,414
Other contractual commitments (4)	1,710,702		299,031		119,322		51,769		42,186		364,733		2,587,743
Asset retirement obligations (5)	3,681		11,280		5,941		7,470		6,778		78,525		113,675
	$	2,461,662	$	2,217,314	$	785,289	$	1,703,996	$	1,853,569	$	12,428,918	$	21,450,748

2020 (9 months remaining) 2021 2022 2023 2024 Thereafter Total
Term loans and other loans payable ⁽¹⁾
$ 55,962
$ 74,507
$ 1,383,505
$ 6,357
$ 5,874
$ 21,792
$ 1,547,997
Senior notes ⁽¹⁾
300,000
150,000
—
—
1,825,300
6,350,800
8,626,100
Interest ⁽²⁾
265,567
330,058
324,461
301,927
289,944
572,901
2,084,858
Finance leases ⁽³⁾
141,162
191,679
188,362
183,177
181,116
1,796,773
2,682,269
Operating leases⁽³⁾
137,567
190,031
182,747
167,266
155,392
1,080,313
1,913,316
Other contractual commitments ⁽⁴⁾
1,276,909
272,609
100,964
51,312
37,795
282,785
2,022,374
Asset retirement obligations ⁽⁵⁾
2,074
4,026
12,777
5,449
7,035
72,117
103,478
$ 2,179,241
$ 1,212,910
$ 2,192,816
$ 715,488
$ 2,502,456
$ 10,177,481
$ 18,980,392

(1)Represents principal and unamortized mortgage premium only.

⁽¹⁾

(2)Represents interest on mortgage payable, loans payable, senior notes and term loans based on their respective interest rates as of March 31, 2021, as well as the credit facility fee for the revolving credit facility.

(3)Represents lease payments under finance and operating lease arrangements, including renewal options that are certain to be exercised.

(4)Represents off-balance sheet arrangements. Other contractual commitments are described below.

(5)Represents liability, net of future accretion expense.

As of March 31, 2021, we were contractually committed for $1.3 billion of unaccrued capital expenditures, primarily for IBX data center equipment not yet delivered and labor not yet provided in connection with the work necessary to complete construction and open these IBX data centers prior to making them available to customers for installation. This amount, which is expected to be paid during the remainder of 2021 and thereafter, is reflected in the table above as "other contractual commitments."

We had other non-capital purchase commitments in place as of March 31, 2021, such as commitments to purchase power in select locations and other open purchase orders, which contractually bind us for goods or services to be delivered or provided during 2021 and beyond. Such other purchase commitments as of March 31, 2021, which total $1.3 billion, are also reflected in the table above as "other contractual commitments."

Ta b le of Contents

Other commitments

We entered into lease agreements in various locations, primarily for data center spaces and ground leases, which have not yet commenced as of March 31, 2021. These lease agreements will commence between 2021 and 2023 with lease terms of 10 to 47 years and a total lease commitment of approximately $566.6 million, which are not reflected in the table above.

~~Represents principal and unamortized mortgage premium only.~~


⁽²⁾	Represents interest on mortgage payable, loans payable, senior notes and term loans based on their respective interest rates as of March 31, 2020, as well as the credit facility fee for the revolving credit facility.


⁽³⁾	~~Represents lease payments under finance and operating lease arrangements, including renewal options that are certain to be exercised.~~


⁽⁴⁾	~~Represents off-balance sheet arrangements. Other contractual commitments are described below.~~


⁽⁵⁾	~~Represents liability, net of future accretion expense.~~

In connection with certain of our leases and other contracts requiring deposits, we entered into 4137 irrevocable letters of credit totaling ~~$76.1~~$75.7 million under the revolving credit facility. These letters of credit were provided in lieu of cash deposits under certain lease obligations. If beneficiaries of the letters of credit were to draw down on these letters of credit triggered by an event of default under the lease, we would be required to fund these letters of credit either through cash collateral or borrowing under the revolving credit facility. These contingent commitments are not reflected in the table above.

We had accrued liabilities related to uncertain tax positions totaling approximately ~~$129.4~~$168.3 million as of March 31, ~~2020.~~2021. These liabilities, which are reflected on our balance sheet, are not reflected in the table above since it is unclear when these liabilities will be paid.

As of March 31, 2020, we were contractually committed for $881.1 million of unaccrued capital expenditures, primarily for IBX data center equipment not yet delivered and labor not yet provided in connection with the work necessary to complete construction and open these IBX data centers prior to making them available to customers for installation. This amount, which is expected to be paid during the remainder of 2020 and thereafter, is reflected in the table above as "other contractual commitments."

We had other non-capital purchase commitments in place as of March 31, 2020, such as commitments to purchase power in select locations and other open purchase orders, which contractually bind us for goods or services to be

delivered or provided during 2020 and beyond. Such other purchase commitments as of March 31, 2020, which total $1,141.2 million, are also reflected in the table above as "other contractual commitments."

In connection with the EMEA Joint Venture, ~~which closed in October 2019,~~ we agreed to make future equity contributions to the EMEA Joint ~~Venture.~~Venture to fund its future development. As of March 31, ~~2020,~~2021, we had future equity contribution commitments of ~~€16.1~~$24.9 million ~~and £13.1 million, or $33.9 million in total at the exchange rate in effect on March 31, 2020,~~ to ~~fund~~ the EMEA Joint ~~Venture’s future development over the next 3 years,~~Venture, which are not reflected in the table above.

~~Additionally,~~In connection with the sale of the PA9 data center, we ~~entered into lease agreements~~also have a commitment to the EMEA Joint Venture to complete a residual portion of the PA9 center for an estimated cost of $22.4 million in ~~various locations for~~ total, ~~lease~~which is reimbursable in full upon completion and is not reflected in the table above. As March 31, 2021, we had contract assets, current of $17.1 million, in relation to the progress in completing this commitment.

We also committed to make future equity contributions to the Asia-Pacific Joint Venture. As of March 31, 2021, we had future equity contribution commitments of ~~approximately $680.8~~$7.8 million ~~excluding potential lease renewals. These lease agreements will commence between fiscal years 2020 and 2022 with lease terms of 2~~ to ~~49 years,~~the Asia-Pacific Joint Venture, which ~~are~~is not reflected in the table above.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements and accompanying notes are prepared in accordance with U.S. GAAP. The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates the accounting policies, assumptions, estimates and judgments to ensure that our condensed consolidated financial statements are presented fairly and in accordance with U.S. GAAP. Management bases its assumptions, estimates and judgments on historical experience, current trends and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. However, because future events and their effects cannot be determined with certainty, actual results may differ from these assumptions and estimates, and such differences could be material. Critical accounting policies for Equinix that affect our more significant judgment and estimates used in the preparation of our condensed consolidated financial statements include accounting for income taxes, accounting for business combinations, accounting for impairment of goodwill, ~~and~~ accounting for property, plant and equipment and accounting for leases, which are discussed in more detail under the caption "Critical Accounting Policies and Estimates" in Management's Discussion and Analysis of Financial Condition and Results of Operations, set forth in Part II Item 7, of our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Recent Accounting Pronouncements

See Note 1 of Notes to Condensed Consolidated Financial Statements in Part I Item 1 of this Quarterly Report on Form 10-Q.



Item 3.			Quantitative and Qualitative Disclosures about Market Risk

There have been no significant changes to our exposure management and procedures in relation to our market risk, investment portfolio risk, interest rate risk, foreign currency risk and commodity price risk exposures and procedures during the three months ended March 31, ~~2020~~2021 as compared to the respective risk exposures and procedures disclosed in Quantitative and Qualitative Disclosures About Market Risk, set forth in Part II Item 7A, of our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, other than factors discussed below.

The uncertainty that exists with respect to the economic impact of the ongoing COVID-19 pandemic introduced significant volatility in the financial markets. See Part II, Item 1A. Risk Factors for additional information regarding potential risks to our business, financial condition and ~~operating~~ results of operations related to the ongoing COVID-19 pandemic.

To help manage the exposure to foreign currency exchange rate fluctuations, we have implemented a number of hedging programs, in particular (i) a cash flow hedging program to hedge the forecasted revenues and expenses in our EMEA region, (ii) a balance sheet hedging program to hedge the re-measurement of monetary assets and liabilities denominated in foreign currencies, and (iii) a net investment hedging program to hedge the long term investments in our foreign subsidiaries. Our hedging programs reduce, but do not entirely eliminate, the impact of currency exchange rate movements and its impact on the consolidated statements of operations.

We have entered into various foreign currency debt obligations. As of March 31, ~~2020,~~2021, the total principal amount of foreign currency debt obligations was ~~$4.2~~$2.5 billion, including ~~$3.0~~$1.3 billion denominated in Euro, ~~$558.4~~$586.0 million denominated in British Pound, ~~$407.3~~$375.3 million denominated in Japanese Yen and ~~$253.4~~$272.8 million denominated in Swedish Krona. As of March 31, ~~2020,~~2021, we have designated ~~$4.2~~$2.2 billion of the total principal amount of foreign currency debt obligations as net investment hedges against our net investments in foreign subsidiaries. For a net investment hedge, changes in the fair value of the hedging instrument designated as a net investment hedge are recorded as a component of other comprehensive income (loss) in the consolidated balance sheets. Fluctuations in the exchange rates between these foreign currencies and the U.S. Dollar will impact the amount of U.S. Dollars that we will require to settle the foreign currency debt obligations at maturity. If the U.S. Dollar would have been weaker or stronger by 10% in comparison to these foreign currencies as of March 31, ~~2020,~~2021, we estimate our obligation to cash settle the principal of these foreign currency debt obligations in U.S. Dollars would have increased or decreased by approximately ~~$471.7~~$280.5 million and ~~$385.9~~$229.5 million, respectively.

~~In 2019, we~~We also entered into cross-currency interest rate swaps where we receive a fixed amount of U.S. Dollars and pay a fixed amount of ~~Euros,~~Euros. As of March 31, 2021, U.S. Dollar to Euro cross-currency interest rate swap contracts with a total notional amount of ~~$750.0 million.~~$3.3 billion were outstanding. The cross-currency interest rate swaps are designated as hedges of our net investment in European operations and changes in the fair value of these swaps are recorded as a component of accumulated other comprehensive income (loss) in the condensed consolidated balance ~~sheet.~~sheets. If the U.S. Dollar weakened or strengthened by 10% in comparison to Euro, we estimate our obligation to cash settle these hedges would have increased or decreased by approximately ~~$91.1~~$390.8 million and ~~$74.6~~$325.3 million, respectively.

The U.S. Dollar strengthened relative to certain of the currencies of the foreign countries in which we operate during the three months ended March 31, ~~2020.~~2021. This has impacted our condensed consolidated financial position and results of operations during this period, including the amount of revenues that we reported. Continued strengthening or weakening of the U.S. Dollar will continue to impact us in future periods.

With the existing cash flow hedges in place, a hypothetical additional 10% strengthening of the U.S. Dollar for the three months ended March 31, ~~2020~~2021 would have resulted in a reduction of our revenues and operating expenses including depreciation and amortization expense by approximately ~~$41.3~~$51.1 million and ~~$38.7~~$47.5 million, respectively.

With the existing cash flow hedges in place, a hypothetical additional 10% weakening of the U.S. Dollar for the three months ended March 31, ~~2020~~2021 would have resulted in an increase of our revenues and operating expenses including depreciation and amortization expense by approximately ~~$50.5~~$58.7 million and ~~$48.7~~$58.7 million, respectively.

We are exposed to interest rate risk related to our outstanding debt. An immediate increase or decrease in current interest rates from their position as of March 31, ~~2020~~2021 would not have a material impact on our interest expense due to the fixed coupon rate on the majority of our debt obligations. However, the interest expense associated with our senior credit facility and term loans that bear interest at variable rates could be affected. For every ~~100 basis~~100-basis point increase or decrease in interest rates, our annual interest expense could increase by approximately ~~$13.8~~$12.0 million or decrease by approximately ~~$5.8~~$0.5 million based on the total balance of our term loan borrowings as of March 31, ~~2020.~~2021. As of March 31, ~~2020,~~2021, we had not employed any interest rate derivative products to hedge our variable rate debt obligations. However, we may enter into interest rate hedging agreements in the future to mitigate our exposure to interest rate risk.


	Three Months Ended March 31,							Three Months Ended March 31,
	2020			2019				2021		2020
	(Unaudited)							(Unaudited)
Cash flows from operating activities:							Cash flows from operating activities:
Net income	$	118,957		$	117,747		Net income	$	156,074	$	118,957
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	287,378			263,643			Depreciation	341,622		287,378
Stock-based compensation	64,499			49,023			Stock-based compensation	78,350		64,499
Amortization of intangible assets	48,491			49,535			Amortization of intangible assets	53,395		48,491
Amortization of debt issuance costs and debt discounts and premiums	3,460			2,995			Amortization of debt issuance costs and debt discounts and premiums	3,940		3,460
Provision for allowance for doubtful accounts	3,934			4,594
Impairment charges	—			14,448
Provision for credit loss allowance							Provision for credit loss allowance	2,740		3,934

Loss on asset sales	1,199			—			Loss on asset sales	1,720		1,199

Loss on debt extinguishment	6,441			382			Loss on debt extinguishment	13,058		6,441
Other items	4,484			5,157			Other items	7,743		4,484
Changes in operating assets and liabilities:							Changes in operating assets and liabilities:
Accounts receivable	15,306			(84,350		)	Accounts receivable	(17,620)		15,306
Income taxes, net	3,697			15,825			Income taxes, net	(10,274)		3,697
Other assets	(101,882		)	(7,833		)	Other assets	(73,255)		(101,882)
Operating lease right-of-use assets	38,797			41,264			Operating lease right-of-use assets	40,924		38,797
Operating lease liabilities	(35,193		)	(38,886		)	Operating lease liabilities	(36,563)		(35,193)
Accounts payable and accrued expenses	(25,681		)	(11,463		)	Accounts payable and accrued expenses	(76,362)		(25,681)
Other liabilities	82,943			(940		)	Other liabilities	(94,334)		82,943
Net cash provided by operating activities	516,830			421,141			Net cash provided by operating activities	391,158		516,830
Cash flows from investing activities:							Cash flows from investing activities:
Purchases of investments	(44,813		)	(9,297		)	Purchases of investments	(22,406)		(44,813)
Sales of investments	5,873			518			Sales of investments	4,057		5,873
Business acquisitions, net of cash and restricted cash acquired	(478,287		)	—			Business acquisitions, net of cash and restricted cash acquired	0		(478,287)
Purchases of real estate	(36,373		)	(5,721		)	Purchases of real estate	(53,737)		(36,373)
Purchases of other property, plant and equipment	(400,941		)	(363,967		)	Purchases of other property, plant and equipment	(563,598)		(400,941)

Net cash used in investing activities	(954,541		)	(378,467		)	Net cash used in investing activities	(635,684)		(954,541)
Cash flows from financing activities:							Cash flows from financing activities:
Proceeds from employee equity awards	30,391			27,593			Proceeds from employee equity awards	40,034		30,391
Payment of dividends and special distribution	(233,479		)	(204,603		)
Payment of dividends							Payment of dividends	(263,039)		(233,479)
Proceeds from public offering of common stock, net of issuance costs	101,792			1,213,434			Proceeds from public offering of common stock, net of issuance costs	0		101,792
Proceeds from revolving credit facility	250,000			—
Proceeds from senior notes, net of debt discounts							Proceeds from senior notes, net of debt discounts	1,290,752		—
Proceeds from mortgage and loans payable							Proceeds from mortgage and loans payable	0		250,000
Repayments of finance lease liabilities	(18,977		)	(31,158		)	Repayments of finance lease liabilities	(32,584)		(18,977)
Repayments of mortgage and loans payable	(18,501		)	(18,334		)	Repayments of mortgage and loans payable	(20,186)		(18,501)
Repayment of senior notes	(343,711		)	—			Repayment of senior notes	(590,650)		(343,711)
Debt extinguishment costs	(4,619		)	—			Debt extinguishment costs	(8,521)		(4,619)
Debt issuance costs							Debt issuance costs	(3,152)		0

Net cash provided by (used in) financing activities	(237,104		)	986,932			Net cash provided by (used in) financing activities	412,654		(237,104)
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash	(25,287		)	(1,695		)	Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash	(22,019)		(25,287)
Net increase (decrease) in cash, cash equivalents and restricted cash	(700,102		)	1,027,911

Net increase in cash, cash equivalents and restricted cash							Net increase in cash, cash equivalents and restricted cash	146,109		(700,102)
Cash, cash equivalents and restricted cash at beginning of period	1,886,613			627,604			Cash, cash equivalents and restricted cash at beginning of period	1,625,695		1,886,613
Cash, cash equivalents and restricted cash at end of period	$	1,186,511		$	1,655,515		Cash, cash equivalents and restricted cash at end of period	$	1,771,804	$	1,186,511

Cash and cash equivalents	$	1,171,339		$	1,633,844		Cash and cash equivalents	$	1,752,990	$	1,171,339
Current portion of restricted cash included in other current assets	6,483			11,305			Current portion of restricted cash included in other current assets	9,702		6,483
Non-current portion of restricted cash included in other assets	8,689			10,366			Non-current portion of restricted cash included in other assets	9,112		8,689
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows	$	1,186,511		$	1,655,515		Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows	$	1,771,804	$	1,186,511


	Accounts receivable, net (1)		Contract assets, current		Contract assets, non-current		Deferred revenue, current		Deferred revenue, non-current
Beginning balances as of January 1, 2021	$	676,738	$	13,534	$	54,050	$	101,258	$	71,242
Closing balances as of March 31, 2021	684,642		29,671		50,546		105,283		64,648
Increase (Decrease)	$	7,904	$	16,137	$	(3,504)	$	4,025	$	(6,594)



Balance at December 31, 2019	$	13,026
Adjustments due to adoption of ASU 2016-13	900
Provision for allowance for doubtful accounts	3,934
Net write-offs and recoveries	(2,688		)
Impact of foreign currency exchange and others	(379		)
Balance at March 31, 2020	$	14,793



	Accounts receivable, net			Contract asset, current		Contract asset, non-current		Deferred revenue, current		Deferred revenue, non-current
Beginning balances as of January 1, 2020	$	689,134		$	10,033	$	31,521	$	76,193	$	46,555
Closing balances as of March 31, 2020	687,153			10,457		33,619		79,575		48,107
Increase/(decrease)	$	(1,981	)	$	424	$	2,098	$	3,382	$	1,552


⁽¹⁾ (1)Included component represents foreign exchange spot rates. (2)Excluded component represents cross-currency basis spread and interest rates. (3)Excluded component represents foreign currency forward points.	~~Included component represents foreign exchange spot rates.~~


⁽²⁾	~~Excluded component represents cross-currency basis spread and interest rates.~~


⁽²⁾	~~Excluded component represents option's time value.~~



	March 31, 2020				December 31, 2019
	Assets ⁽¹⁾		Liabilities ⁽²⁾		Assets ⁽¹⁾		Liabilities ⁽²⁾
Designated as hedging instruments:
Cash flow hedges
Foreign currency forward and option contracts	$	46,544	$	19	$	24,853	$	5,898
Interest rate locks	4,373		21,295		—		—
Net investment hedges
Cross-currency interest rate swaps	72,095		—		26,251		—
Total designated as hedging	123,012		21,314		51,104		5,898

Not designated as hedging instruments:
Embedded derivatives	10,733		1,102		4,595		2,268
Economic hedges of embedded derivatives	4,507		23		1,367		—
Foreign currency forward contracts	73,939		59,751		641		27,446
Total not designated as hedging	89,179		60,876		6,603		29,714
Total Derivatives	$	212,191	$	82,190	$	57,707	$	35,612


⁽¹⁾ (1)As presented in our condensed consolidated balance sheets within other current assets and other assets. (2)As presented in our condensed consolidated balance sheets within other current liabilities and other liabilities.	~~As presented in the Company's condensed consolidated balance sheets within other current assets and other assets.~~



	Fair Value at March 31, 2020		Fair Value Measurement Using
	Fair Value at March 31, 2020		Level 1		Level 2
Assets:
Money market and deposit accounts	$	453,349	$	453,349	$	—
Publicly traded equity securities	2,664		2,664		—
Certificates of deposit	23,169		—		23,169
Derivative instruments ⁽¹⁾	212,191		—		212,191
Total	$	691,373	$	456,013	$	235,360
Liabilities:
Derivative instruments ⁽¹⁾	$	82,190	$	—	$	82,190



	Fair Value at December 31, 2019		Fair Value Measurement Using
	Fair Value at December 31, 2019		Level 1		Level 2
Assets:
Money market and deposit accounts	$	886,547	$	886,547	$	—
Publicly traded equity securities	2,779		2,779		—
Certificates of deposit	7,583		—		7,583
Derivative instruments ⁽¹⁾	57,707		—		57,707
Total	$	954,616	$	889,326	$	65,290
Liabilities:
Derivative instruments ⁽¹⁾	$	35,612	$	—	$	35,612



	Three Months Ended March 31, 2020		Three Months Ended March 31, 2019
Finance lease cost
Amortization of right-of-use assets ⁽¹⁾	$	25,166	$	20,086
Interest on lease liabilities	27,825		27,523
Total finance lease cost	52,991		47,609

Operating lease cost	53,791		51,639
Total lease cost	$	106,782	$	99,248



Years ending:
2020 (9 months remaining)	$	355,962
2021	224,507
2022	1,383,505
2023	6,357
2024	1,831,174
Thereafter	6,372,592
Total	$	10,174,097



	Balance as of December 31, 2019			Net Change			Balance as of March 31, 2020
Foreign currency translation adjustment ("CTA") loss	$	(1,056,918	)	$	(413,781	)	$	(1,470,699	)
Unrealized gain on cash flow hedges ⁽¹⁾	15,638			(3,256		)	12,382
Net investment hedge CTA gain ⁽¹⁾	107,619			144,946			252,565
Net actuarial loss on defined benefit plans ⁽²⁾	(952		)	35			(917		)
Accumulated other comprehensive loss attributable to Equinix	$	(934,613	)	$	(272,056	)	$	(1,206,669	)


◦	~~an injunction, law or order that makes unlawful the consummation of the acquisition;~~


◦	~~inaccuracy or breach of the representations and warranties of, or the non-compliance with covenants by, either party;~~



		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Filing Date/ Period End Date	Exhibit	Filed Herewith

2.1	Rule 2.7 Announcement, dated as May 29, 2015. Recommended Cash and Share Offer for Telecity Group plc by Equinix, Inc.	8-K	5/29/2015	2.1

2.2	Cooperation Agreement, dated as of May 29, 2015, by and between Equinix, Inc. and Telecity Group plc.	8-K	5/29/2015	2.2

2.3	Amendment to Cooperation Agreement, dated as of November 24, 2015, by and between Equinix, Inc. and Telecity Group plc.	10-K	12/31/2015	2.3

2.4	Transaction Agreement, dated as of December 6, 2016, by and between Verizon Communications Inc. and Equinix, Inc.	8-K	12/6/2016	2.1

2.5	Amendment No. 1 to the Transaction Agreement, dated February 23, 2017, by and between Verizon Communications Inc. and Equinix, Inc.	10-K	12/31/2016	2.5

2.6	Amendment No.2 to the Transaction Agreement, dated April 30, 2017, by and between Verizon Communications Inc. and Equinix, Inc.	8-K	5/1/2017	2.1

2.7	Amendment No.3 to the Transaction Agreement, dated June 29, 2018, by and between Verizon Communications Inc. and Equinix, Inc.	10-Q	8/8/2018	2.7

3.1	Amended and Restated Certificate of Incorporation of the Registrant, as amended to date.	10-K/A	12/31/2002	3.1

3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant.	8-K	6/14/2011	3.1

3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant.	8-K	6/11/2013	3.1

3.4	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant.	10-Q	6/30/2014	3.4

3.5	Certificate of Designation of Series A and Series A-1 Convertible Preferred Stock.	10-K/A	12/31/2002	3.3

3.6	Amended and Restated Bylaws of the Registrant.	8-K	3/29/2016	3.1

4.1	Reference is made to Exhibits 3.1, 3.2, 3.3, 3.4, 3.5 and 3.6.

4.2	Indenture, dated as of November 20, 2014, between Equinix, Inc. and U.S. Bank National Association as trustee.	8-K	11/20/2014	4.1



4.4	Form of 5.375% Senior Notes due 2027 (see Exhibit 4.3).

4.5	Fifth Supplemental Indenture, dated as of September 20, 2017 among Equinix, Inc. and U.S. Bank National Association, as trustee, and Elavon Financial Services DAC, UK Branch, as paying agent.	8-K	9/20/2017	4.2

4.6	Indenture, dated as of December 12, 2017, between Equinix, Inc. and U.S. Bank National Association, as trustee.	8-K	12/5/2017	4.1

4.7	Supplemental Indenture, dated as of December 12, 2017, among Equinix, Inc. and U.S. Bank National Association, as trustee, and Elavon Financial Services DAC, UK Branch, as paying agent.	8-K	12/5/2017	4.2

4.8	Form of 2.875% Senior Notes due 2026 (see Exhibit 4.7).

4.9	Third Supplemental Indenture, dated as of April 2, 2018, among Equinix, Inc. and U.S. Bank National Association, as trustee.	8-K	4/3/2018	4.2

4.10	Form of 5.00% Senior Notes due October 2020 (see Exhibit 4.9).

4.11	Form of 5.00% Senior Notes due April 2021 (see Exhibit 4.9).

4.12	Fourth Supplemental Indenture, dated as of November 18,2019, among Equinix, Inc and U.S. Bank National Association, as trustee.	8-K	11/18/2019	4.2

4.13	Form of 2.625% Senior Notes due 2024 (See Exhibit 4.12).

4.14	Fifth Supplemental Indenture, dated as of November 18, 2019, among Equinix, Inc. and U.S. Bank National Association, as trustee.	8-K	11/18/2019	4.4

4.15	Form of 2.900% Senior Notes due 2026 (See Exhibit 4.14).

4.16	Sixth Supplemental Indenture, dated as of November 18, 2019, among Equinix, Inc. and U.S. Bank National Association, as trustee.	8-K	11/18/2019	4.6

4.17	Form of 3.200% Senior Notes due 2029 (See Exhibit 4.16)	8-K	6/22/2020

4.18	Seventh Supplemental Indenture, dated as of June 22, 2020, among Equinix, Inc. and U.S. Bank National Association, as trustee	8-K	6/22/2020	4.2

4.19	Form of 1.250% Senior Note due 2025 (See Exhibit 4.18)	8-K	6/22/2020	4.3

4.20	Eighth Supplemental Indenture, dated as of June 22, 2020, among Equinix, Inc. and U.S. Bank National Association, as trustee	8-K	6/22/2020	4.4

4.21	Form of 1.800% Senior Note due 2027 (See Exhibit 4.20)	8-K	6/22/2020	4.5

4.22	Ninth Supplemental Indenture, dated as of June 22, 2020, among Equinix, Inc. and U.S. Bank National Association, as trustee	8-K	6/22/2020	4.6



4.3	First Supplemental Indenture, dated as of November 20, 2014, between Equinix, Inc. and U.S. Bank National Association, as trustee.	8-K	11/20/2014	4.2

4.4	Form of 5.375% Senior Note due 2022 (see Exhibit 4.3).

4.5	Third Supplemental Indenture, dated as of December 4, 2015, between Equinix, Inc. and U.S. Bank National Association, as trustee.	8-K	12/4/2015	4.2

4.6	Form of 5.875% Senior Note due 2026 (see Exhibit 4.5).

4.7	Fourth Supplemental Indenture, dated as of March 22, 2017 between Equinix, Inc. and U.S. Bank National Association, as trustee.	8-K	3/22/2017	4.2

4.8	Form of 5.375% Senior Notes due 2027 (see Exhibit 4.7).

4.9	Fifth Supplemental Indenture, dated as of September 20, 2017 among Equinix, Inc. and U.S. Bank National Association, as trustee, and Elavon Financial Services DAC, UK Branch, as paying agent.	8-K	9/20/2017	4.2

4.10	Form of 2.875% Senior Notes due 2025 (see Exhibit 4.9).

4.11	Indenture, dated as of December 12, 2017, between Equinix, Inc. and U.S. Bank National Association, as trustee.	8-K	12/5/2017	4.1
				��
4.12	Supplemental Indenture, dated as of December 12, 2017, among Equinix, Inc. and U.S. Bank National Association, as trustee, and Elavon Financial Services DAC, UK Branch, as paying agent.	8-K	12/5/2017	4.2

4.13	Form of 2.875% Senior Notes due 2026 (see Exhibit 4.12).

4.14	Second Supplemental Indenture, dated as of March 14, 2018, among Equinix, Inc. and U.S. Bank National Association, as trustee, and Elavon Financial Services DAC, UK Branch, as paying agent.	8-K	3/14/2018	4.2

4.15	Form of 2.875% Senior Notes due 2024 (see Exhibit 4.14).

4.16	Third Supplemental Indenture, dated as of April 2, 2018, among Equinix, Inc. and U.S. Bank National Association, as trustee.	8-K	4/3/2018	4.2

4.17	Form of 5.00% Senior Notes due April 2020 (see Exhibit 4.16).

4.18	Form of 5.00% Senior Notes due October 2020 (see Exhibit 4.16).

4.19	Form of 5.00% Senior Notes due April 2021 (see Exhibit 4.16).

4.20	Fourth Supplemental Indenture, dated as of November 18,2019, among Equinix, Inc and U.S. Bank National Association, as trustee.	8-K	11/18/2019	4.2

4.21	Form of 2.625% Senior Notes due 2024 (See Exhibit 4.20).



10.17**	2019 Form of Time-Based Restricted Stock Unit Agreement for Executives.	10-Q	3/31/2019	10.31

10.18**	2020 Equinix, Inc. Annual Incentive Plan.				X

10.19**	2020 Form of Revenue/AFFO per Share Restricted Stock Unit Agreement for Executives.				X

10.20**	2020 Form of TSR Restricted Stock Unit Agreement for Executives.				X

10.21**	2020 Form of Time-Based Restricted Stock Agreement for Executives.				X

10.22	Agreement for Purchase and Sale of Shares Among RW Brasil Fundo de Investimentos em Participação, Antônio Eduardo Zago De Carvalho and Sidney Victor da Costa Breyer, as Sellers, and Equinix Brasil Participaçãoes Ltda., as Purchaser, and Equinix South America Holdings LLC., as a Party for Limited Purposes and ALOG Soluções de Tecnologia em Informática S.A. as Intervening Consenting Party dated July 18, 2014.	10-Q	9/30/2014	10.67

10.23	Share Purchase Agreement with Digital Realty Trust, L.P., relating to the sale and purchase of shares in TelecityGroup UK LON Limited, Telecity Netherlands AMS01 AMS04 BV, Equinix Real Estate (TCY AMS04) B.V. and TelecityGroup Germany Fra2 GmbH, dated May 14, 2016.	10-Q	6/30/2016	10.55

10.24	Credit Agreement dated as of December 12, 2017 among Equinix, Inc. as Borrower, The Guarantors Parties (defined therein), Bank of America, N.A., as Administrative Agent, Lender and L/C issuer, Barclays Bank PLS, Goldman Sachs Bank USA, HSBC Securities (USA) Inc. ING Capital LLC, TD Securities (USA) LLC, and Wells Fargo Bank, National Association as Co-Documentation Agents, the Other Lenders Party (defined therein) and Bank of America, N.A., Citibank, N.A., JPMorgan Chase Bank, N.A., MUFG, and RBC Capital Markets as Joint Lead Arrangers and Joint Book Runners.	10-K	12/31/2017	10.40

10.25	Consent and First Amendment to Credit Agreement, dated as of June 28, 2018 by and among Equinix, Inc. as Borrower, the Guarantors (defined therein), the Lenders (as such term is defined in the Credit Agreement referred to therein), and BANK OF AMERICA, N.A., as Administrative Agent.	10-Q	8/8/2018	10.35

10.26	Second Amendment to Credit Agreement, dated as of July 26, 2018, by and between Equinix, Inc. as Borrower, the financial institutions defined therein, MUFG Bank, Ltd., as Technical Agent and Bank of America, N.A. as Administrative Agent, under that certain Credit Agreement dated December 12, 2017.	10-Q	8/8/2018	10.36



10.27	Third Amendment to Credit Agreement, dated as of April 26, 2019, by and among Equinix, Inc., Delaware corporation ("Equinix" or the "Borrower"), each "Lender" (as such term is defined in the Credit Agreement referred to therein) party hereto, and BANK OF AMERICA, N.A., as Administrative Agent, under that certain Credit Agreement dated December 12, 2017.	10-Q	6/30/2019	10.34

10.28**	Relocation Letter Agreement by and between Equinix, Inc. and Charles Meyers dated October 12, 2018.	10-K	2/22/2019	10.37

10.29**	Change in Control Severance Agreement between Equinix, Inc and Mike Campbell dated October 3, 2019.	10-Q	9/30/2019	10.25

10.30**	Change in Control Severance Agreement between Equinix, Inc and Brandi Galvin Morandi dated October 3, 2019.	10-Q	9/30/2019	10.26

10.31**	Change in Control Severance Agreement between Equinix, Inc and Karl Strohmeyer dated October 3, 2019.	10-Q	9/30/2019	10.27

10.32**	Change in Control Severance Agreement between Equinix, Inc and Peter Van Camp dated October 3, 2019.	10-Q	9/30/2019	10.28

10.33**	Change in Control Severance Agreement between Equinix, Inc and Charles Meyers dated October 4, 2019.	10-Q	9/30/2019	10.29

10.34**	Change in Control Severance Agreement between Equinix, Inc and Eric Schwartz dated October 3, 2019.	10-Q	9/30/2019	10.30

10.35**	Change in Control Severance Agreement between Equinix, Inc and Keith Taylor dated October 3, 2019.	10-Q	9/30/2019	10.31

10.36**	Change in Control Severance Agreement between Equinix, Inc and Sara Baack dated October 3, 2019.	10-Q	9/30/2019	10.32

10.37**	Side Letter Agreement Regarding RSUs between Equinix, Inc. and Sara Baack dated October 3, 2019.	10-Q	9/30/2019	10.33

10.38**	Side Letter Agreement Regarding RSUs between Equinix, Inc. and Charles Meyers dated October 4, 2019.	10-Q	9/30/2019	10.34

10.39**	Side Letter Agreement Regarding RSUs between Equinix, Inc. and Eric Schwartz dated October 3, 2019.	10-Q	9/30/2019	10.35

10.40**	Side Letter Agreement Regarding RSUs between Equinix, Inc. and Keith Taylor dated October 3, 2019.	10-Q	9/30/2019	10.36

10.41**	Side Letter Agreement Regarding RSUs between Equinix, Inc. and Mike Campbell dated October 3, 2019.	10-Q	9/30/2019	10.37

10.42**	Side Letter Agreement Regarding RSUs between Equinix, Inc. and Brandi Galvin Morandi dated October 3, 2019.	10-Q	9/30/2019	10.38



	EQUINIX, INC.
Date: ~~May 7, 2020~~April 30, 2021
	By:	/s/ KEITH D. TAYLOR
		Chief Financial Officer
		(Principal Financial Officer)