Item 16. Form 10-K Summary

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Item 16. Form 10-K Summary

Not applicable.

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.


		EQUINIX, INC. (Registrant)

February 19, 2021	By	/s/ CHARLES MEYERS
		Charles Meyers
		Chief Executive Officer and President

Power of Attorney

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Charles Meyers or Keith D. Taylor, or either of them, each with the power of substitution, their attorney-in-fact, to sign any amendments to this Annual Report on Form 10-K (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date
/s/ CHARLES MEYERS	Chief Executive Officer and President (Principal Executive Officer)	February 19, 2021
Charles Meyers
/s/ KEITH D. TAYLOR	Chief Financial Officer (Principal Financial Officer)	February 19, 2021
Keith D. Taylor
/s/ SIMON MILLER	Chief Accounting Officer (Principal Accounting Officer)	February 19, 2021
Simon Miller
/s/ PETER F. VAN CAMP	Executive Chairman	February 19, 2021
Peter F. Van Camp
/s/ THOMAS A. BARTLETT	Director	February 19, 2021
Thomas A. Bartlett
/s/ NANCI CALDWELL	Director	February 19, 2021
Nanci Caldwell
/s/ ADAIRE FOX-MARTIN	Director	February 19, 2021
Adaire Fox-Martin
/s/ GARY F. HROMADKO	Director	February 19, 2021
Gary F. Hromadko
/s/ WILLIAM K. LUBY	Director	February 19, 2021
William K. Luby
/s/ IRVING F. LYONS, III	Director	February 19, 2021
Irving F. Lyons, III
/s/ CHRISTOPHER B. PAISLEY	Director	February 19, 2021
Christopher B. Paisley
	Director
Sandra Rivera

Index to Exhibits


Exhibit Number						Description of Document

4.33						Description of Securities

21.1						Subsidiaries of Equinix, Inc.

23.1						Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.

31.1						Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Document.

101.LAB						Inline XBRL Taxonomy Extension Labels Document.

101. PRE						Inline XBRL Taxonomy Extension Presentation Document.

104						Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

** Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Equinix, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Equinix, Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders' equity and other comprehensive income (loss) and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Changes in Accounting Principles

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases as of January 1, 2019 and the manner in which it accounts for revenue from contracts with customers as of January 1, 2018.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

F-1

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Income taxes - Real estate investment trust asset tests

As described in Notes 1 and 14 to the consolidated financial statements, the Company recorded income tax expense of $146.2 million for the year ended December 31, 2020. The Company has been operating as a real estate investment trust for federal income tax purposes (“REIT”) effective January 1, 2015. As a result, the Company may deduct the dividends made to its stockholders from taxable income generated by the Company and its qualified REIT subsidiaries ("QRSs"). The Company’s qualification and taxation as a REIT depends on its satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. The Company’s ability to satisfy quarterly asset tests depends upon its analysis and the fair market values of its REIT and non-REIT assets. For purposes of the quarterly REIT asset tests, management estimates the fair market value of assets within its QRSs and taxable REIT subsidiaries (“TRSs”) using a discounted cash flow approach, by calculating the present value of forecasted future cash flows. Management applies discount rates based on industry benchmarks relative to the market and forecasting risks. Other significant assumptions used by management to estimate the fair market value of assets in QRSs and TRSs include projected revenue growth, projected operating margins, and projected capital expenditures. Management revisits significant assumptions periodically to reflect any changes due to business or economic environment.

The principal considerations for our determination that performing procedures relating to income taxes - REIT asset tests is a critical audit matter are (i) the significant judgment by management in determining the fair market value of REIT and non-REIT assets, which in turn led to a high degree of subjectivity in performing procedures relating to the REIT asset test, (ii) the significant audit effort and judgment in evaluating audit evidence related to the significant assumptions used in the REIT asset test, related to the discount rates, projected revenue growth, projected operating margins, and projected capital expenditures, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the REIT asset test, including controls over the determination of the fair market value of REIT and non-REIT assets. These procedures also included, among others, testing management’s process for estimating the fair market value of the REIT and non-REIT assets; evaluating the appropriateness of the discounted cash flow

F-2

approach; testing the completeness and accuracy of underlying data used in the approach; and evaluating the significant assumptions used by management related to the discount rates, projected revenue growth, projected operating margins, and projected capital expenditures. Evaluating management’s assumptions related to projected revenue growth, projected operating margins, and projected capital expenditures involved considering the current and past performance of the Company, economic and industry trends, as well as whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow approach and the discount rates.

/s/ PricewaterhouseCoopers LLP

San Jose, California

February 19, 2021

We have served as the Company's auditor since 2000.

F-3

EQUINIX, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)


	December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	1,604,869	$	1,869,577
Short-term investments	4,532		10,362
Accounts receivable, net of allowance of $10,677 and $13,026	676,738		689,134
Other current assets	323,016		303,543

Total current assets	2,609,155		2,872,616
Property, plant and equipment, net	14,503,084		12,152,597
Operating lease right-of-use assets	1,475,057		1,475,367
Goodwill	5,472,553		4,781,858
Intangible assets, net	2,170,945		2,102,389
Other assets	776,047		580,788
Total assets	$	27,006,841	$	23,965,615
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$	844,862	$	760,718
Accrued property, plant and equipment	301,155		301,535
Current portion of operating lease liabilities	154,207		145,606
Current portion of finance lease liabilities	137,683		75,239
Current portion of mortgage and loans payable	82,289		77,603
Current portion of senior notes	150,186		643,224
Other current liabilities	354,368		153,938

Total current liabilities	2,024,750		2,157,863
Operating lease liabilities, less current portion	1,308,627		1,315,656
Finance lease liabilities, less current portion	1,784,816		1,430,882
Mortgage and loans payable, less current portion	1,287,254		1,289,434
Senior notes, less current portion	9,018,277		8,309,673
Other liabilities	948,999		621,725
Total liabilities	16,372,723		15,125,233
Commitments and contingencies (Note 15)
Equinix stockholders' equity:
Preferred stock, $0.001 par value per share: 100,000,000 shares authorized in 2020 and 2019; zero shares issued and outstanding	—		—
Common stock, $0.001 par value per share: 300,000,000 shares authorized in 2020 and 2019; 89,462,304 issued and 89,134,252 outstanding in 2020 and 85,700,953 issued and 85,308,386 outstanding in 2019	89		86
Additional paid-in capital	15,028,357		12,696,433
Treasury stock, at cost; 328,052 shares in 2020 and 392,567 shares in 2019	(122,118)		(144,256)
Accumulated dividends	(5,119,274)		(4,168,469)
Accumulated other comprehensive loss	(913,368)		(934,613)
Retained earnings	1,760,302		1,391,425
Total Equinix stockholders' equity	10,633,988		8,840,606
Non-controlling interests	130		(224)
Total stockholders' equity	10,634,118		8,840,382
Total liabilities and stockholders' equity	$	27,006,841	$	23,965,615

See accompanying notes to consolidated financial statements.

F-4

EQUINIX, INC.

Consolidated Statements of Operations

(in thousands, except per share data)


	Years Ended December 31,
	2020		2019		2018
Revenues	$	5,998,545	$	5,562,140	$	5,071,654
Costs and operating expenses:
Cost of revenues	3,074,340		2,810,184		2,605,475
Sales and marketing	718,356		651,046		633,702
General and administrative	1,090,981		935,018		826,694
Transaction costs	55,935		24,781		34,413
Impairment charges	7,306		15,790		—
Gain on asset sales	(1,301)		(44,310)		(6,013)
Total costs and operating expenses	4,945,617		4,392,509		4,094,271
Income from operations	1,052,928		1,169,631		977,383
Interest income	8,654		27,697		14,482
Interest expense	(406,466)		(479,684)		(521,494)
Other income	6,913		27,778		14,044
Loss on debt extinguishment	(145,804)		(52,825)		(51,377)
Income before income taxes	516,225		692,597		433,038
Income tax expense	(146,151)		(185,352)		(67,679)
Net income	370,074		507,245		365,359
Net (income) loss attributable to non-controlling interests	(297)		205		—
Net income attributable to Equinix	$	369,777	$	507,450	$	365,359

Earnings per share ("EPS") attributable to Equinix:
Basic EPS	$	4.22	$	6.03	$	4.58
Weighted-average shares for basic EPS	87,700		84,140		79,779
Diluted EPS	$	4.18	$	5.99	$	4.56
Weighted-average shares for diluted EPS	88,410		84,679		80,197

See accompanying notes to consolidated financial statements.

F-5

EQUINIX, INC.

Consolidated Statements of Comprehensive Income (Loss)

(in thousands)


	Years Ended December 31,
	2020		2019		2018
Net income	$	370,074	$	507,245	$	365,359
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment ("CTA") gain (loss), net of tax effects of $—, $(51) and $4,419	548,560		(58,334)		(421,743)
Net investment hedge CTA gain (loss), net of tax effects of $—, $10 and $1,358	(444,553)		73,294		219,628

Unrealized gain (loss) on cash flow hedges, net of tax effects of $14,521, $2,938 and $(14,557)	(82,790)		(3,842)		43,671
Net actuarial gain (loss) on defined benefit plans, net of tax effects of $(23), $(9) and $(15)	85		(48)		55
Total other comprehensive income (loss), net of tax	21,302		11,070		(158,389)
Comprehensive income, net of tax	391,376		518,315		206,970
Net (income) loss attributable to non-controlling interests	(297)		205		—
Other comprehensive (income) loss attributable to non-controlling interests	(57)		19		—
Comprehensive income attributable to Equinix	$	391,022	$	518,539	$	206,970

See accompanying notes to consolidated financial statements.

F-6

EQUINIX, INC.

Consolidated Statements of Stockholders’ Equity and Other Comprehensive Income (Loss)

For the Three Years Ended December 31, 2020

(in thousands, except 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, 2017	79,440,404	$	79	(402,342)	$	(146,320)	$	10,121,323	$	(2,592,792)	$	(785,189)	$	252,689	$	6,849,790	$	—	$	6,849,790
Adjustment from adoption of new accounting standard	—	—		—	—		—		—		(2,124)		271,900		269,776		—		269,776
Net income	—	—		—	—		—		—		—		365,359		365,359		—		365,359
Other comprehensive loss	—	—		—	—		—		—		(158,389)		—		(158,389)		—		(158,389)
Issuance of common stock and release of treasury stock for employee equity awards	747,779	1		5,483	1,159		48,976		—		—		—		50,136		—		50,136
Issuance of common stock under ATM Program	930,934	1		—	—		388,171		—		—		—		388,172		—		388,172
Dividend distribution on common stock, $9.12 per share	—	—		—	—		—		(727,448)		—		—		(727,448)		—		(727,448)
Settlement of accrued dividends on vested equity awards	—	—		—	—		2,319		(876)		—		—		1,443		—		1,443
Accrued dividends on unvested equity awards	—	—		—	—		—		(10,084)		—		—		(10,084)		—		(10,084)
Stock-based compensation, net of estimated forfeitures	—	—		—	—		189,799		—		—		—		189,799		—		189,799
Noncontrolling interests	—	—		—	—		725		—		—		—		725		—		725
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	—	—		—	—		—		—		—		(5,973)		(5,973)		—		(5,973)
Net income (loss)	—	—		—	—		—		—		—		507,450		507,450		(205)		507,245
Other comprehensive income (loss)	—	—		—	—		—		—		11,089		—		11,089		(19)		11,070
Issuance of common stock and release of treasury stock for employee equity awards	692,706	1		4,292	905		51,111		—		—		—		52,017		—		52,017
Issuance of common stock for equity offering	2,985,575	3		—	—		1,213,431		—		—		—		1,213,434		—		1,213,434
Issuance of common stock under ATM Program	903,555	1		—	—		447,541		—		—		—		447,542		—		447,542
Dividend distribution on common stock, $9.84 per share	—	—		—	—		—		(825,893)		—		—		(825,893)		—		(825,893)
Settlement of accrued dividends on vested equity awards	—	—		—	—		308		(688)		—		—		(380)		—		(380)
Accrued dividends on unvested equity awards	—	—		—	—		—		(10,688)		—		—		(10,688)		—		(10,688)
Stock-based compensation, net of estimated forfeitures	—	—		—	—		232,729		—		—		—		232,729		—		232,729

F-7

Table of Conten t s

EQUINIX, INC.

Consolidated Statements of Stockholders’ Equity and Other Comprehensive Income (Loss) - Continued

For the Three Years Ended December 31, 2020

(in thousands, except 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	—	—		—	—		—		—		—		(900)		(900)		—		(900)
Net income	—	—		—	—		—		—		—		369,777		369,777		297		370,074
Other comprehensive income	—	—		—	—		—		—		21,245		—		21,245		57		21,302
Issuance of common stock and release of treasury stock for employee equity awards	758,339	—		64,515	22,138		39,979		—		—		—		62,117		—		62,117
Issuance of common stock for equity offering	2,587,500	3		—	—		1,683,103		—		—		—		1,683,106		—		1,683,106
Issuance of common stock under ATM Program	415,512	—		—	—		298,269		—		—		—		298,269		—		298,269
Dividend distribution on common stock, $10.64 per share	—	—		—	—		—		(936,269)		—		—		(936,269)		—		(936,269)
Settlement of accrued dividends on vested equity awards	—	—		—	—		189		(770)		—		—		(581)		—		(581)
Accrued dividends on unvested equity awards	—	—		—	—		—		(13,766)		—		—		(13,766)		—		(13,766)
Stock-based compensation, net of estimated forfeitures	—	—		—	—		310,384		—		—		—		310,384		—		310,384
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

See accompanying notes to consolidated financial statements.

F-8

EQUINIX, INC.

Consolidated Statements of Cash Flows

(in thousands)


	Years Ended December 31,
	2020		2019		2018
Cash flows from operating activities:
Net income	$	370,074	$	507,245	$	365,359
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	1,224,322		1,088,559		1,024,073
Stock-based compensation	294,952		236,539		180,716
Amortization of intangible assets	199,047		196,278		203,416
Amortization of debt issuance costs and debt discounts and premiums	15,739		13,042		13,618
Provision for credit loss allowance	5,069		8,459		7,236
Impairment charges	7,306		15,790		—
Gain on asset sales	(1,301)		(44,310)		(6,013)

Loss on debt extinguishment	145,804		52,825		51,377
Other items	16,643		11,620		19,660
Changes in operating assets and liabilities:
Accounts receivable	25,412		(26,909)		(52,931)
Income taxes, net	(22,641)		32,495		(10,670)
Other assets	(129,817)		(100,144)		(47,635)
Operating lease right-of-use assets	153,650		149,031		—
Operating lease liabilities	(142,863)		(152,091)		—
Accounts payable and accrued expenses	25,801		(27,928)		35,495
Other liabilities	122,629		32,227		31,725
Net cash provided by operating activities	2,309,826		1,992,728		1,815,426
Cash flows from investing activities:
Purchases of investments	(127,763)		(60,909)		(65,180)
Sales and maturities of investments	29,352		40,386		85,777
Business acquisitions, net of cash and restricted cash acquired	(1,180,272)		(34,143)		(829,687)
Purchases of real estate	(200,182)		(169,153)		(182,418)
Purchases of other property, plant and equipment	(2,282,504)		(2,079,521)		(2,096,174)
Proceeds from sale of assets, net of cash transferred	334,397		358,773		12,154
Net cash used in investing activities	(3,426,972)		(1,944,567)		(3,075,528)
Cash flows from financing activities:

Proceeds from employee equity awards	62,118		52,018		50,136
Payment of dividends and special distribution	(947,933)		(836,164)		(738,600)

Proceeds from public offering of common stock, net of issuance costs	1,981,375		1,660,976		388,172
Proceeds from senior notes, net of debt discounts	4,431,627		2,797,906		929,850
Proceeds from mortgage and loans payable	750,790		—		424,650
Repayment of senior notes	(4,363,761)		(2,206,289)		—
Repayment of finance lease liabilities	(115,288)		(126,486)		(103,774)
Repayment of mortgage and loans payable	(829,466)		(73,227)		(447,473)
Debt extinguishment costs	(111,700)		(43,311)		(20,556)
Debt issuance costs	(42,236)		(23,341)		(12,218)
Other financing activities	—		—		725
Net cash provided by financing activities	815,526		1,202,082		470,912
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash	40,702		8,766		(33,907)
Net increase (decrease) in cash, cash equivalents and restricted cash	(260,918)		1,259,009		(823,097)
Cash, cash equivalents and restricted cash at beginning of period	1,886,613		627,604		1,450,701
Cash, cash equivalents and restricted cash at end of period	$	1,625,695	$	1,886,613	$	627,604
Supplemental cash flow information
Cash paid for taxes	$	143,934	$	136,583	$	93,375
Cash paid for interest	$	498,408	$	553,815	$	496,795


Cash and cash equivalents	$	1,604,869	$	1,869,577	$	606,166
Current portion of restricted cash included in other current assets	11,135		7,090		10,887
Non-current portion of restricted cash included in other assets	9,691		9,946		10,551
Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows	$	1,625,695	$	1,886,613	$	627,604

See accompanying notes to consolidated financial statements.

F-9

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business and Summary of Significant Accounting Policies

Nature of Business

Equinix, Inc. ("Equinix" or the "Company") was incorporated in Delaware on June 22, 1998. Equinix provides colocation space and related offerings. Global enterprises, content providers, financial companies and network service providers rely upon Equinix's insight and expertise to safehouse and connect their most valued information assets. The Company operates International Business ExchangeTM ("IBX®") data centers, or IBX data centers, across the Americas; Europe, Middle East and Africa ("EMEA") and Asia-Pacific geographic regions where customers directly interconnect with a network ecosystem of partners and customers. More than 1,800 network service providers offer access to the world's internet routes inside the Company's IBX data centers. This access to internet routes provides Equinix customers improved reliability and streamlined connectivity while significantly reducing costs by reaching a critical mass of networks within a centralized physical location. As of December 31, 2020, the Company operated 224 IBX data centers in 63 markets around the world.

The Company has been operating as a real estate investment trust for federal income tax purposes ("REIT") effective January 1, 2015. See "Income Taxes" in Note 14 below for additional information.

Basis of Presentation, Consolidation and Foreign Currency

The accompanying consolidated financial statements include the accounts of Equinix and its subsidiaries, including the acquisitions of:

Infomart Dallas, including its operations and tenants, from ASB Real Estate Investments (the "Infomart Dallas Acquisition") from April 2, 2018;
Metronode from the Ontario Teachers' Pension Plan Board (the "Metronode Acquisition") from April 18, 2018;
Switch Datacenters' AMS1 data center business in Amsterdam, Netherlands from April 18, 2019;
Three data centers in Mexico acquired from Axtel S.A.B. de C.V ("Axtel") from January 8, 2020;
Packet Host, Inc. (“Packet”), including its operations and technology, from March 2, 2020; and
12 data center sites across Canada from BCE Inc. ("Bell") from October 1, 2020 and one additional data center site from November 2, 2020.

The Company consolidates all entities that are wholly owned and those entities in which the Company own less than 100% of the equity but control, including variable interest entities ("VIEs") for which the Company is the primary beneficiary. The Company's investment in consolidated VIEs have not been material to its consolidated financial statements as of and for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. Foreign exchange gains or losses resulting from foreign currency transactions, including intercompany foreign currency transactions, that are anticipated to be repaid within the foreseeable future, are reported within other income (expense) on the Company's accompanying consolidated statements of operations. For additional information on the impact of foreign currencies to the Company's consolidated financial statements, see "Accumulated Other Comprehensive Loss" in Note 12.

Use of Estimates

The preparation of consolidated financial statements in conformity with the accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the allowance for credit losses, fair values of financial and derivative instruments, intangible assets and goodwill, assets acquired and liabilities assumed from acquisitions, useful lives of intangible assets and property, plant and equipment, leases, asset retirement obligations, other accruals, and

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

income taxes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable.

Cash, Cash Equivalents and Short-Term Investments

The Company considers all highly liquid instruments with an original maturity from the date of purchase of 90 days or less to be cash equivalents. Cash equivalents consist of money market mutual funds and certificates of deposit with original maturities up to 90 days. Short-term investments generally consist of certificates of deposit with original maturities of between 90 days and 1 year. Publicly traded equity securities are measured at fair value with changes in the fair values recognized within other income (expense) in the Company's consolidated statements of operations. The Company reviews its investment portfolio quarterly to determine if any securities may be other-than-temporarily impaired due to increased credit risk, changes in industry or sector of a certain instrument or ratings downgrades.

Equity Method Investments

The Company enters into joint venture or partnership arrangements to invest in certain entities for business development objectives. At the inception of these arrangements and if a reconsideration event has occurred, the Company assesses its interests with such entities to determine whether any of the entities meet the definition of a VIE. A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. The Company is required to consolidate the assets and liabilities of VIEs when it is deemed to be the primary beneficiary. The primary beneficiary of a VIE is the entity that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. For VIEs where the Company is not the primary beneficiary, and other joint ventures or partnerships that are not VIEs, where the Company has the ability to exercise significant influence over the entity, the Company accounts its investment under the equity method of accounting.

Equity method investments are initially measured at cost, or at fair value when the investment represents a retained equity interest in a deconsolidated business or an investment recognized upon the derecognition of distinct non-financial assets. Equity investments are subsequently adjusted for cash contributions, distributions and the Company's share of the income and losses of the investees. The Company records its equity method investments in other assets in the consolidated balance sheet. The Company's proportionate share of the income or loss from its equity method investments are recorded in other income in the consolidated statement of operations.

The Company reviews its investments quarterly to determine if any investments may be impaired considering both qualitative and quantitative factors that may have a significant impact on the investees' fair value. The Company did not record any impairment charges related to its equity method investments for the years ended December 31, 2020, 2019 and 2018. For further information on the Company's Equity Method Investments, see Note 6.

Non-marketable Equity Investments

The Company also has investments in non-marketable equity securities, where the Company does not have the ability to exercise significant influence over the investees. The Company elected the measurement alternative under which the securities are measured at cost minus impairment, if any, and adjusted for changes resulting from qualifying observable price changes. The Company records non-marketable equity investment in other assets in the consolidated balance sheet. The Company reviews its non-marketable equity investments quarterly to determine if any investments may be impaired considering both qualitative and quantitative factors that may have a significant impact on the investees' fair value. The Company did not record any impairment charges related to its non-marketable equity investments for the years ended December 31, 2020, 2019 and 2018.

Financial Instruments and Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, short-term investments and accounts receivable. Risks associated with cash and cash equivalents and short-term investments are mitigated by the Company's investment policy, which limits the

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Company's investing to only those marketable securities rated at least A-1/P-1 Short Term Rating or A-/A3 Long Term Rating, as determined by independent credit rating agencies.

A significant portion of the Company's customer base is comprised of businesses throughout the Americas. However, a portion of the Company's revenues are derived from the Company's EMEA and Asia-Pacific operations. The following table sets forth percentages of the Company's revenues by geographic region for the years ended December 31:


	2020		2019		2018
Americas	45	%	47	%	49	%
EMEA	33	%	32	%	31	%
Asia-Pacific	22	%	21	%	20	%

For further information on the Company's segment information, see Note 17.

Property, Plant and Equipment

Property, plant and equipment are stated at the Company's original cost or at fair value for property, plant and equipment acquired through acquisitions, net of depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements and integral equipment at leased locations are amortized over the shorter of the lease term or the estimated useful life of the asset or improvement.

The Company capitalizes certain internal and external costs associated with the development and purchase of internal-use software in property, plant and equipment, net on the consolidated balance sheets. This includes costs incurred in cloud computing arrangements ("CCA"), where it is both feasible and contractually permissible without significant penalty for the Company to take possession of the software. All other CCAs are considered service contracts, and the licensing and implementation costs incurred associated with such contracts are capitalized in other assets on the consolidated balance sheets. Capitalized internal-use software costs and capitalized implementation costs are amortized on a straight-line basis over the estimated useful lives of the software or arrangements.

The Company's estimated useful lives of its property, plant and equipment are as follows:


Core systems	3	-	40 years
Buildings	12	-	58 years
Leasehold improvements	12	-	40 years
Personal Property, including capitalized internal-use software	3	-	10 years

The Company's construction in progress includes direct and indirect expenditures for the construction and expansion of IBX data centers and is stated at original cost. The Company has contracted out substantially all of the construction and expansion efforts of its IBX data centers to independent contractors under construction contracts. Construction in progress includes costs incurred under construction contracts including project management services, engineering and schematic design services, design development, construction services and other construction-related fees and services. In addition, the Company has capitalized interest costs during the construction phase. Once an IBX data center or expansion project becomes operational, these capitalized costs are allocated to certain property, plant and equipment categories and are depreciated over the estimated useful life of the underlying assets.

The Company reviews its property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or an asset group may not be recoverable such as a significant decrease in market price of an asset, a significant adverse change in the extent or manner in which an asset or an asset group is being used or in its physical condition, a significant adverse change in legal factors or business climate that could affect the value of an asset or an asset group or a continuous deterioration of the Company's financial condition. Recoverability of assets or asset groups to be held and used is assessed by comparing the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or the asset group. If the carrying amount of the asset or the asset group

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset or the asset group exceeds the fair value of the asset. The Company did not record any impairment charges related to its property, plant and equipment during the years ended December 31, 2020, 2019 and 2018.

The Company enters into non-cancellable lease arrangements as the lessee primarily for its data center spaces, office spaces and equipment. Assets acquired through finance leases are included in property, plant and equipment, net on the consolidated balance sheets. In addition, a portion of the Company's property, plant and equipment are used for revenue arrangements which are accounted for as operating leases where the Company is the lessor.

Assets Held for Sale

Assets and liabilities to be disposed of that meet all of the criteria to be classified as held for sale are reported at the lower of their carrying amounts or fair values less costs to sell. The Company recorded an impairment charge of $7.3 million and $15.8 million relating to assets held for sale for the year ended December 31, 2020 and 2019, respectively. Assets are not depreciated or amortized while they are classified as held for sale. For further information on the Company's assets held for sale, see Note 5.

Asset Retirement Costs and Asset Retirement Obligations

The fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred. The associated retirement costs are capitalized and included as part of the carrying value of the long-lived asset and amortized over the useful life of the asset. Subsequent to the initial measurement, the Company accretes the liability in relation to the asset retirement obligations over time and the accretion expense is recorded as a cost of revenue. The Company's asset retirement obligations are primarily related to its IBX data centers, of which the majority are leased under long-term arrangements and are required to be returned to the landlords in their original condition. The majority of the Company's IBX data center leases have been subject to significant development by the Company in order to convert them from, in most cases, vacant buildings or warehouses into IBX data centers. For further information on the Company's leases, see Note 7.

Goodwill and Other Intangible Assets

The Company has three reportable segments comprised of the 1) Americas, 2) EMEA and 3) Asia-Pacific geographic regions, which the Company also determined are its reporting units. Goodwill is not amortized and is tested for impairment at least annually or more often if and when circumstances indicate that goodwill is not recoverable.

The Company assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors considered in the assessment include industry and market conditions, overall financial performance, and other relevant events and factors affecting the reporting unit. If, after assessing the qualitative factors, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then performing a quantitative impairment test is unnecessary. However, if the Company concludes otherwise, then it is required to perform a quantitative goodwill impairment test. The quantitative impairment test, which is used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired. If the carrying value of the reporting unit exceeds its fair value, any excess of the reporting unit goodwill carrying value over the respective implied fair value is recognized as an impairment loss.

As of December 31, 2020, 2019 and 2018, the Company concluded that it was more likely than not that goodwill attributed to the Company's Americas, EMEA and Asia-Pacific reporting units was not impaired as the fair value of each reporting unit exceeded the carrying value of its respective reporting unit, including goodwill.

Substantially all of the Company's intangible assets are subject to amortization and are amortized using the straight-line method over their estimated period of benefit. The Company performs a review of intangible assets for impairment by assessing events or changes in circumstances that indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is assessed by comparing the carrying amount of an asset to estimated undiscounted future net cash flows expected to be generated by the asset. If the carrying amount

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company did not record any impairment charges related to its other intangible assets during the years ended December 31, 2020, 2019 and 2018. For further information on goodwill and other intangible assets, see Note 3 and Note 7 below.

Debt Issuance Costs

Costs and fees incurred upon debt issuances are capitalized and are amortized over the life of the related debt based on the effective interest method. Such amortization is included as a component of interest expense. Debt issuance costs related to outstanding debt are presented as a reduction of the carrying amount of the debt obligation and debt issuance costs related to the revolving credit facility are presented as other assets. For further information on debt facilities, see Note 11 below.

Derivatives and Hedging Activities

The Company uses derivative instruments, including foreign currency forwards and options and cross-currency interest rate swaps, to manage certain foreign currency exposures. Derivative instruments are viewed as risk management tools by the Company and are not used for speculative purposes. The Company recognizes all derivatives on the Company's consolidated balance sheets at fair value. The accounting for changes in the value of a derivative depends on whether the contract qualifies and has been designated for hedge accounting. In order to qualify for hedge accounting, a derivative must be considered highly effective at reducing the risk associated with the exposure being hedged and there must be documentation of the risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk exposure, and the effectiveness assessment methodology. For cash flow hedges, the Company uses regression analysis at the time they are designated to assess their effectiveness. Hedge designations are reviewed on a quarterly basis to assess whether circumstances have changed that would disrupt the hedge instrument's relationship to the forecasted transactions or net investment.

The Company uses the forward method to assess effectiveness of qualifying foreign currency forwards that are designated as cash flow hedges, whereby, the change in the fair value of the derivative is recorded in other comprehensive income (loss) and reclassified to the same line item in the consolidated statement of operations that is used to present the earnings effect of the hedged item when the hedged item affects earnings. The Company uses the spot method to assess effectiveness of qualifying foreign currency exchange options that are designated as cash flow hedges, whereby, the change in fair value due to foreign currency exchange spot rates is recorded in other comprehensive income (loss) and reclassified to the same line item in the consolidated statement of operations that is used to present the earnings effect of the hedged item when the hedged item affects earnings, and the change in fair value of the excluded component is recorded in other comprehensive income (loss) and amortized on a straight-line basis to the same line item in the consolidated statement of operations that is used to present the earnings effect of the hedged item. When two or more derivative instruments in combination are jointly designated as a cash flow hedging instrument, as with foreign currency exchange option collars, they are treated as a single instrument. If the hedge relationship is terminated for any derivatives designated as cash flow hedges, then the change in fair value of the derivative recorded in other comprehensive income (loss) is recognized in earnings when the previously hedged item affects earnings, consistent with the original hedge strategy. For hedge relationships that are discontinued because the forecasted transaction is not expected to occur according to the original strategy, then any related derivative amounts recorded in other comprehensive income (loss) are immediately recognized in earnings.

From time to time, the Company uses derivative instruments, including treasury locks and swap locks (collectively, "interest rate locks") to manage certain interest rate exposures. An interest rate lock is a synthetic forward sale of a benchmark interest rate, which is settled in cash based upon the difference between an agreed upon rate at inception and the prevailing benchmark rate at settlement. It effectively fixes the benchmark rate component of an upcoming debt issuance. The interest rate lock transactions are designated as cash flow hedges, with all changes in value reported in other comprehensive income (loss). Subsequent to settlement, amounts in other comprehensive income are amortized to interest expense over the term of the forecasted hedged transaction which is equivalent to the term interest rate locks.

The Company uses the spot method to assess effectiveness of cross-currency interest rate swaps that are designated as net investment hedges, whereby, the change in fair value due to foreign currency exchange spot

F-14

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

rates is recorded in other comprehensive income (loss) and the change in fair value of the excluded component is recorded in other comprehensive income (loss) and amortized to interest expense on a straight-line basis.

From time to time, the Company also uses foreign exchange forward contracts to hedge against the effect of foreign exchange rate fluctuations on a portion of its net investment in the foreign subsidiaries. The Company uses the spot method to assess effectiveness of qualifying foreign currency forwards that are designated as net investment hedges, whereby, the change in fair value due to foreign currency exchange spot rates is recorded in other comprehensive income (loss) and the change in fair value of the excluded component is recorded in other comprehensive income (loss) and amortized to interest expense on a straight-line basis.

Foreign currency gains or losses associated with derivatives that are not designated as hedging instruments for accounting purposes are recorded within other income (expense) in the Company's consolidated statements of operations, with the exception of (i) foreign currency embedded derivatives contained in certain of the Company's customer contracts and (ii) foreign exchange forward contracts that are entered into to hedge the accounting impact of the foreign currency embedded derivatives, which are recorded within revenues in the Company's consolidated statements of operations. For further information on derivatives and hedging activities, see Note 8 below.

Fair Value of Financial Instruments

The carrying value of the Company's cash and cash equivalents, short-term investments and derivative instruments represent their fair value, while the Company's accounts receivable, accounts payable and accrued expenses and accrued property, plant and equipment approximate their fair value due primarily to the short-term maturity of the related instruments. The fair value of the Company's debt, which is traded in the public debt market, is based on quoted market prices. The fair value of the Company's debt, which is not publicly traded, is estimated by considering the Company's credit rating, current rates available to the Company for debt of the same remaining maturities and terms of the debt.

Fair Value Measurements

The Company measures and reports certain financial assets and liabilities at fair value on a recurring basis, including its investments in money market funds, certificates of deposit, publicly traded equity securities and derivatives.

The Company also follows the accounting standard for the measurement of fair value for non-financial assets and liabilities on a nonrecurring basis. These include:

Non-financial assets and non-financial liabilities initially measured at fair value in a business combination or other new basis event, but not measured at fair value in subsequent reporting periods;
Reporting units and non-financial assets and non-financial liabilities measured at fair value for goodwill impairment tests;
Indefinite-lived intangible assets measured at fair value for impairment assessments;
Non-financial long-lived assets or asset groups measured at fair value for impairment assessments or disposal;
Asset retirement obligations initially measured at fair value but not subsequently measured at fair value; and
Assets and liabilities classified as held for sale are measured at fair value less costs to sell and reported at the lower of the carrying amounts or the fair values less costs to sell.

For further information on fair value measurements, see Note 5 and Note 9 below.

Leases

The Company determines if an arrangement is or contains a lease at its inception. The Company enters into lease arrangements primarily for land, data center spaces, office spaces and equipment. The Company recognizes a right-of-use ("ROU") asset and lease liability on the consolidated balance sheet for all leases with a term longer than 12 months, including renewals options that the Company is reasonably certain to exercise.

F-15

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

ROU assets represent the Company's right to use an underlying asset for the lease term. Lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are classified and recognized at the commencement date. When there is a lease modification, including a change in lease term, the Company reassess its classification and remeasures the ROU asset and lease liability. For the existing leases that were entered prior to January 1, 2019, the Company applied the package of practical expedients and elected not to reassess its existing leases and land easements, as well as the lease classifications and capitalized initial direct costs for those leases.

ROU lease liabilities are measured based on the present value of fixed lease payments over the lease term. ROU assets consist of (i) initial measurement of the lease liability; (ii) lease payments made to the lessor at or before the commencement date less any lease incentives received; and (iii) initial direct costs incurred by the Company. Lease payments may vary because of changes in facts or circumstances occurring after the commencement, including changes in inflation indices. Variable lease payments that depend on an index or a rate (such as the Consumer Price Index or a market interest rate) are included in the measurement of ROU assets and lease liabilities using the index or rate at the commencement date. Subsequent changes to lease payments based on changes to the index and rate are accounted for as variable lease payments and recognized in the period they are incurred. Variable lease payments that do not depend on an index or a rate are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Since most of the Company's leases do not provide an implicit rate, the Company uses its own incremental borrowing rate ("IBR") on a collateralized basis in determining the present value of lease payments. The Company utilizes a market-based approach to estimate the IBR. The approach requires significant judgment. Therefore, the Company utilizes different data sets to estimate IBRs via an analysis of (i) yields on comparable credit rating composite curves; (ii) sovereign rates; (iii) yields on our outstanding public debt; and (iv) indicative pricing on both secured and unsecured debt received from potential lenders. The Company also applies adjustments to account for considerations related to (i) tenor; and (ii) country credit rating that may not be fully incorporated by the aforementioned data sets.

The majority of the Company's lease arrangements include options to extend the lease. If the Company is reasonably certain to exercise such options, the periods covered by the options are included in the lease term. The depreciable lives of certain fixed assets and leasehold improvements are limited by the expected lease term. The Company has certain leases with an initial term of 12 months or less. For such leases, the Company elected not to recognize any ROU asset or lease liability on the consolidated balance sheet. The Company has lease agreements with lease and non-lease components. The Company elected to account for the lease and non-lease components as a single lease component for all classes of underlying assets for which the Company has identified lease arrangements. For further information on leases, see Note 10 below.

Revenue

Revenue Recognition

Equinix derives more than 90% of its revenues from recurring revenue streams, consisting primarily of (1) colocation, which includes the licensing of cabinet space and power; (2) interconnection offerings, such as cross connects and Equinix Exchange ports; (3) managed infrastructure solutions and (4) other revenues consisting of rental income from tenants or subtenants. The remainder of the Company's revenues are from non-recurring revenue streams, such as installation revenues, professional services, contract settlements and equipment sales. Revenues by service lines and geographic areas are included in segment information. For further information on segment information, see Note 17 below.

Under the revenue accounting guidance, revenues are recognized when control of these products and services is transferred to its customers, in an amount that reflects the consideration it expects to be entitled to in exchange for the products and services. Revenues from recurring revenue streams are generally billed monthly and recognized ratably over the term of the contract, generally 1 to 3 years for IBX data center colocation customers. Non-recurring installation fees, although generally paid upfront upon installation, are deferred and recognized ratably over the contract term. Professional service fees and equipment sales are recognized in the period when the services were provided. For the contracts with customers that contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct or as a series of distinct obligations if the individual performance obligations meet the series criteria. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price is allocated to the separate performance obligation on a

F-16

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

relative standalone selling price basis. The standalone selling price is determined based on overall pricing objectives, taking into consideration market conditions, geographic locations and other factors. Other judgments include determining if any variable consideration should be included in the total contract value of the arrangement such as price increases.

Revenue is generally recognized on a gross basis as a principal versus on a net basis as an agent, as the Company is primarily responsible for fulfilling the contract, bears inventory risk and has discretion in establishing the price when selling to the customer. To the extent the Company does not meet the criteria for recognizing revenue on a gross basis, the Company records the revenue on a net basis. Revenue from contract settlements, when a customer wishes to terminate their contract early, is treated as a contract modification and recognized ratably over the remaining term of the contract, if any. On January 1, 2018, the Company adopted the current revenue accounting guidance ("Topic 606") using the modified retrospective approach applied to those contracts, which were not completed as of January 1, 2018, and recognized a net increase to the opening retained earnings of $269.8 million, net of tax impacts.

The Company guarantees certain service levels, such as uptime, as outlined in individual customer contracts. If these service levels are not achieved due to any failure of the physical infrastructure or offerings, or in the event of certain instances of damage to customer infrastructure within the Company's IBX data centers, the Company would reduce revenue for any credits or cash payments given to the customer. Historically, these credits and cash payments have not been significant.

The Company enters into revenue contracts with customers for data centers and office spaces, which contain both lease and non-lease components. The Company elected to adopt the practical expedient which allows lessors to combine lease and non-lease components, by underlying class of asset, and account for them as one component if they have the same timing and pattern of transfer. The combined component is accounted for in accordance with the current lease accounting guidance ("Topic 842") if the lease component is predominant, and in accordance with Topic 606 if the non-lease component is predominant. Lessors are permitted to adopt this practical expedient on a retrospective or prospective basis. The Company elected to apply the practical expedient prospectively based on classes of underlying assets. In general, customer contracts for data centers are accounted for under Topic 606 and customer contracts for the use of office space are accounted for under Topic 842, which are generally classified as operating leases and are recognized on a straight-line basis over the lease term.

Certain customer agreements are denominated in currencies other than the functional currencies of the parties involved. Under applicable accounting rules, the Company is deemed to have foreign currency forward contracts embedded in these contracts. The Company assessed these embedded contracts and concluded them to be foreign currency embedded derivatives (see Note 8). These instruments are separated from their host contracts and held on the Company's consolidated balance sheet at their fair value. The majority of these foreign currency embedded derivatives arise in certain of the Company's subsidiaries where the local currency is the subsidiary's functional currency and the customer contract is denominated in the U.S. dollar. Changes in their fair values are recognized within revenues in the Company's consolidated statements of operations.

Contract Balances

The timing of revenue recognition, billings and cash collections result in accounts receivables, contract assets and deferred revenues. A receivable is recorded at the invoice amount, net of an allowance for credit losses and is recognized in the period when the Company has transferred products or provided services to its customers and when its right to consideration is unconditional. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 45 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the Company's contracts generally do not include a significant financing component. The Company assesses collectability based on a number of factors, including past transaction history with the customer and the credit-worthiness of the customer. The Company generally does not request collateral from its customers although in certain cases the Company obtains a security interest in a customer's equipment placed in its IBX data centers or obtains a deposit. The Company also maintains an allowance for estimated losses on a lifetime loss basis resulting from the inability of its customers to make required payments for which the Company had expected to collect the revenues in accordance with the new credit loss guidance accounting guidance ("Topic 326"). the financial condition of the Company's customers were to deteriorate or if they became insolvent, resulting in an impairment of their ability to make payments, greater allowances for credit losses may be required. Management specifically analyzes accounts receivable and current economic news, conditions and trends, historical loss rates, customer concentrations, customer credit-worthiness,

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

changes in customer payment terms and any applicable long term forecast when evaluating revenue recognition and the adequacy of the Company's reserves. Any amounts that were previously recognized as revenue and subsequently determined to be uncollectable are charged to bad debt expense included in sales and marketing expense in the consolidated statements of operations. A specific bad debt reserve of up to the full amount of a particular invoice value is provided for certain problematic customer balances. An additional reserve is established for all other accounts based an analysis of historical credits issued. Delinquent account balances are written off after management has determined that the likelihood of collection is not probable.

A contract asset exists when the Company has transferred products or provided services to its customers, but customer payment is contingent upon satisfaction of additional performance obligations. Certain contracts include terms related to price arrangements such as price increases and free months. The Company recognizes revenues ratably over the contract term, which could potentially give rise to contract assets during certain periods of the contract term. Contract assets are recorded in other current assets and other assets in the consolidated balance sheet.

Deferred revenue (a contract liability) is recognized when the Company has an unconditional right to a payment before it transfers products or services to customers. Deferred revenue is included in other current liabilities and other liabilities, respectively, in the consolidated balance sheet.

Contract Costs

Direct and indirect incremental costs solely related to obtaining revenue contracts are capitalized as costs of obtaining a contract, when they are incremental and if they are expected to be recovered. Such costs consist primarily of commission fees and sales bonuses, as well as indirect related payroll costs. In 2020, contract costs are amortized over the estimated period of five years on a straight-line basis. The Company elected to apply the practical expedient which allows the Company to expense contract costs when incurred, if the amortization period is one year or less.

For further information on revenue recognition, see Note 2 below.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and tax attributes such as operating loss, capital loss and tax credits carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are expected more likely than not to be realized in the future. A tax benefit from an uncertain income tax position may be recognized in the financial statements only if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authority's widely understood administrative practices and precedents. Recognized income tax positions are measured at the largest amount that has a greater than 50 percent likelihood of being realized. Any subsequent changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company elected to be taxed as a REIT for U.S. federal income tax purposes beginning with its 2015 taxable year. As a result, the Company may deduct the dividends made to its stockholders from taxable income generated by the Company and its qualified REIT subsidiaries ("QRSs"). The Company's dividends paid deduction generally eliminates the U.S. federal taxable income of the Company and its QRSs, resulting in no U.S. federal income tax due. However, the Company's domestic taxable REIT subsidiaries ("TRSs") are subject to the U.S. corporate income taxes on any taxable income generated by them. In addition, the 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's qualification and taxation as a REIT depends on its satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. The Company's ability to satisfy quarterly asset tests depends upon its analysis and the fair market values of its REIT and non-REIT

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assets. For purposes of the quarterly REIT asset tests, the Company estimates the fair market value of assets within its QRSs and TRSs using a discounted cash flow approach, by calculating the present value of forecasted future cash flows. The Company applies discount rates based on industry benchmarks relative to the market and forecasting risks. Other significant assumptions used to estimate the fair market value of assets in QRSs and TRSs include projected revenue growth, projected operating margins, and projected capital expenditures. The Company revisits significant assumptions periodically to reflect any changes due to business or economic environment.

For further information on income taxes, see Note 14 below.

Stock-Based Compensation

Stock-based compensation cost is measured at the grant date for all stock-based awards made to employees and directors based on the fair value of the award. The Company generally recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. However, for awards with market conditions or performance conditions, stock-based compensation expense is recognized on a straight-line basis over the requisite service period for each vesting tranche of the award. The Company elected to estimate forfeitures based on historical forfeiture rates.

The Company grants restricted stock units ("RSUs") or restricted stock awards ("RSAs") to its employees and these equity awards generally have only a service condition. The Company grants RSUs to its executives and these awards generally have a service and performance condition or a service and market condition. Performance conditions contained in an equity award are generally tied to the financial performance of the Company or a specific region of the Company. The Company assesses the probability of meeting these performance conditions on a quarterly basis. The majority of the Company's RSUs vest over four years, although certain of the equity awards for executives vest over a range of two to four years. The Company's RSAs vest over three years. The valuation of RSUs and RSAs with only a service condition or a service and performance condition requires no significant assumptions as the fair value for these types of equity awards is based solely on the fair value of the Company's stock price on the date of grant. The Company uses a Monte Carlo simulation option-pricing model to determine the fair value of RSUs with a service and market condition.

The Company uses the Black-Scholes option-pricing model to determine the fair value of its employee stock purchase plan ("ESPP"). The determination of the fair value of shares purchased under the ESPP is affected by assumptions regarding a number of complex and subjective variables including the Company's expected stock price volatility over the term of the awards and actual and projected employee stock purchase behaviors. The Company estimated the expected volatility by using the average historical volatility of its common stock that it believed was best representative of future volatility. The risk-free interest rate used was based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the equity awards. The expected dividend rate used was based on average dividend yields and the expected term used was equal to the term of each purchase window.

The accounting standard for stock-based compensation does not allow the recognition of unrealized tax benefits associated with the tax deductions in excess of the compensation recorded (excess tax benefit) until the excess tax benefit is realized (i.e., reduces taxes payable). The Company records the excess tax benefits from stock-based compensation as income tax expense through the statement of operations. For further information on stock-based compensation, see Note 13 below.

Foreign Currency Translation

The financial position of foreign subsidiaries is translated using the exchange rates in effect at the end of the period, while income and expense items are translated at average rates of exchange during the period. Gains or losses from translation of foreign operations where the local currency is the functional currency are included as other comprehensive income (loss). The net gains and losses resulting from foreign currency transactions are recorded in net income in the period incurred and recorded within other income (expense). Certain inter-company balances are designated as loans of a long-term investment-type nature. Accordingly, exchange gains and losses associated with these long-term inter-company balances are recorded as a component of other comprehensive income (loss), along with translation adjustments.

Earnings Per Share

The Company computes basic and diluted EPS for net income. Basic EPS is computed using net income and

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the weighted-average number of common shares outstanding. Diluted EPS is computed using net income and the weighted-average number of common shares outstanding plus any dilutive potential common shares outstanding. Dilutive potential common shares include the assumed exercise, vesting and issuance activity of employee equity awards using the treasury stock method. For further information on earnings per share, see Note 4 below.

Treasury Stock

The Company accounts for treasury stock under the cost method. When treasury stock is re-issued at a higher price than its cost, the difference is recorded as a component of additional paid-in capital to the extent that there are gains to offset the losses. If there are no treasury stock gains in additional paid-in capital, the losses are recorded as a component of retained earnings.

Coronavirus (COVID-19) Update

In December 2019, a novel strain of coronavirus, referred to as Coronavirus disease 2019, or COVID-19, emerged. In February 2020, the World Health Organization ("WHO") raised the COVID-19 threat from high to very high, and in March 2020, the WHO characterized COVID-19 as a global pandemic.

During the year ended December 31, 2020, the COVID-19 pandemic did not have a material impact on the Company’s financial statements. The Company recorded an insignificant amount of revenue reserve related to our response to the COVID-19 pandemic and experienced some decline in non-recurring revenue from Smart Hands services, as the Company had waived fees from affected customers in certain circumstances for a period of time. The Company has seen a modest but mixed impact from the COVID-19 pandemic to its operating costs. The Company incurred one-time cash bonuses and compensation expense of $8.6 million for its IBX data center employees, as well as other employees to support their work-from-home requirements during the first quarter of 2020. Additionally, the Company increased its allowance for credit losses for accounts receivable by an insignificant amount during the year ended December 31, 2020. This was partially offset by lower travel expenses due to travel restrictions as a result of the COVID-19 pandemic. The Company evaluated its goodwill, long-lived assets, including property, plant and equipment, lease right-of-use assets and intangible assets, noting no indicators of impairment.

The full impact that the ongoing COVID-19 pandemic will have on the Company's future consolidated financial statements remains uncertain and ultimately will depend on many factors, including the duration and potential cyclicity of the health crisis, further public policy actions to be taken in response, as well as the continued impact of the pandemic on the global economy and the Company's customers and vendors. The Company will continue to evaluate the nature and extent of these potential impacts to its business and consolidated financial statements.

Recent Accounting Pronouncements

Accounting Standards Not Yet Adopted

In 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. The Company is currently evaluating the extent of the impact of this ASU, but does not expect the adoption of this standard to have significant impact on its consolidated financial statements.

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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. 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. On January 1, 2021, the Company adopted this ASU and the adoption of this standard will not have any significant impact on the Company's consolidated financial statements.

Accounting Standards Recently Adopted

Derivatives and Hedging

In August 2017, FASB issued ASU 2017-12 Derivatives and Hedging ("Topic 815"): Targeted Improvements to Accounting for Hedging Activities. This ASU was issued to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements and to simplify the application of the hedge accounting guidance in current GAAP. This ASU permits hedge accounting for risk components involving nonfinancial risk and interest rate risk, requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the hedged item is reported, no longer requires separate measurement and reporting of hedge ineffectiveness, eases the requirement for hedge effectiveness assessment, and requires a tabular disclosure related to the effect on the income statement of fair value and cash flow hedges.

The Company adopted ASU 2017-12 on January 1, 2019 using the modified retrospective approach. For cash flow hedges existing on the date of adoption, the Company recognized the cumulative effect of the change on the opening balance of accumulated other comprehensive income (loss) with a corresponding adjustment to the opening balance of retained earnings for amounts previously recognized in earnings related to ineffectiveness. The adoption of this standard did not have any significant impact on the Company's consolidated financial statements.

Leases

In February 2016, FASB issued ASU 2016-02, Leases and issued subsequent amendments to the initial guidance, collectively referred to as "Topic 842." Topic 842 replaces the guidance in former ASC Topic 840, Leases. The new lease guidance increases transparency and comparability among organizations by requiring the recognition of the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee's future obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use ("ROU") asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term.

On January 1, 2019, the Company adopted Topic 842 using the alternative transition method. Therefore, results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while comparative information has not been restated and continues to be reported under accounting standards in effect for those periods. The Company recognized the cumulative effects of initially applying the standard as an adjustment to the opening balance of retained earnings in the period of adoption.

In adopting the new guidance, the Company elected to apply the package of practical expedients permitted under the transition guidance which allows the Company not to reassess (1) whether any expired or existing contracts contain leases under the new definition of a lease; (2) lease classification for any expired or existing leases; and (3) whether previously capitalized initial direct costs would qualify for capitalization under Topic 842. The Company also elected to apply the land easements practical expedient which permits the Company not to assess at transition whether any expired or existing land easements are, or contain, leases if they were not previously accounted for as leases under Topic 840.

Adoption of the standard had a significant impact on the Company's financial results, including the (1) recognition of new ROU assets and liabilities on its balance sheet for all operating leases; and (2) de-recognition of existing build-to-suit assets and liabilities with cumulative effects of initially applying the standard as an adjustment to the retained earnings. The cumulative effect of the changes made to its consolidated January 1, 2019 balance sheet from the adoption of Topic 842 was as follows (in thousands):

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Balance Sheet	Balances at December 31, 2018		Adjustments due to adoption of Topic 842		Balances at January 1, 2019
Assets
Other current assets	$	274,857	$	(15,949)	$	258,908
Property, plant and equipment, net	11,026,020		(293,111)		10,732,909
Operating lease right-of-use assets	—		1,468,762		1,468,762
Intangible assets, net	2,333,296		(23,205)		2,310,091
Other assets	533,252		(63,468)		469,784
Liabilities
Current portion of operating lease liabilities	—		144,405		144,405
Current portion of finance lease liabilities	—		70,795		70,795
Current portion of capital lease and other financing obligations	77,844		(77,844)		—
Other current liabilities	126,995		(6,455)		120,540
Operating lease liabilities, less current portion	—		1,312,262		1,312,262
Finance lease liabilities, less current portion	—		1,165,188		1,165,188
Capital lease and other financing obligations, less current portion	1,441,077		(1,441,077)		—
Other liabilities	629,763		(88,272)		541,491
Equity
Retained Earnings	889,948		(5,973)		883,975

Financial Instruments - Credit Losses

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 credit losses. The adoption did not have any significant impact on other financial assets within the scope of Topic 326, such as contract assets.

Reference Rate Reform

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 ASU 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 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company adopted the ASU upon its issuance and there was no impact on the Company's consolidated financial statements for the year ended December 31, 2020 as a result of adopting this standard. The Company will evaluate its debt, derivative and lease contracts that are eligible for modification relief and may apply the elections prospectively as needed.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

2. Revenue Recognition

Contract Balances

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


	Accounts receivable, net		Contract assets, current		Contract assets, 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 December 31, 2020	676,738		13,534		54,050		101,258		71,242
Increase/(decrease)	$	(12,396)	$	3,501	$	22,529	$	25,065	$	24,687

Beginning balances as of January 1, 2019	$	630,119	$	9,778	$	16,396	$	73,143	$	46,641
Closing balances as of December 31, 2019	689,134		10,033		31,521		76,193		46,555
Increase/(decrease)	$	59,015	$	255	$	15,125	$	3,050	$	(86)

The difference between the opening and closing balances of the Company's accounts receivable, net, contract assets and deferred revenues primarily results from revenue growth and the timing difference between the satisfaction of the Company's performance obligation and the customer's payment, as well as business combinations closed during the years ended December 31, 2020 and 2019. The amounts of revenue recognized during the years ended December 31, 2020, 2019 and 2018 from the opening deferred revenue balance were $87.0 million, $87.3 million and $81.8 million, respectively. For the years ended December 31, 2020, 2019 and 2018, no impairment loss related to contract balances was recognized in the consolidated statement of operations.

Contract Costs

The ending balances of net capitalized contract costs as of December 31, 2020 and 2019 were $268.0 million and $229.2 million, respectively, which were included in other assets in the consolidated balance sheet. $85.4 million, $72.9 million, and $73.1 million of contract costs were amortized during years ended December 31, 2020, 2019, and 2018, respectively, which were included in sales and marketing expense in the consolidated statement of operations.

Remaining performance obligations

As of December 31, 2020, approximately $8.4 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 xScaleTM 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 considered the lessor.

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3. Acquisitions

2020 Acquisitions

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

On October 1, 2020, the Company completed the acquisition of 12 data center sites across Canada from BCE Bell, with one additional data center in Ottawa Canada acquired on November 2, 2020, for a total combined purchase consideration of approximately C$931.7 million, or $702.0 million at the exchange rates in effect on those dates. The acquisition supports the Company’s ongoing expansion to meet customer demand in Canada.

Acquisition of Packet (the "Packet Acquisition")

On March 2, 2020, the Company acquired all outstanding shares and equity awards of Packet, a leading bare metal automation platform for total purchase consideration of approximately $290.3 million in cash. In connection with the close of the transaction, the Company 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. The Company 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 Equinix MetalTM, is expected to accelerate the Company's strategy to help enterprises deploy hybrid multicloud architectures on Equinix's data center platform.

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

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

Purchase price allocation

These acquisitions constitute businesses 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 December 31, 2020, the Company completed the detailed valuation analysis and the final allocation of purchase price for the Packet Acquisition and the Axtel Acquisition. The Company continues 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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A summary of the final allocation of total purchase consideration is presented as follows (in thousands):


	Bell		Packet (1)		Axtel (2)
	Provisional		Final
Cash and cash equivalents	$	—	$	1,068	$	—
Accounts receivable	—		5,098		—
Other current assets	803		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	75,631		58,500		22,750
Goodwill	170,548		230,620		78,902
Deferred tax and other assets	722		138		—
Total assets acquired	800,780		325,187		193,753
Accounts payable and accrued liabilities	(895)		(1,275)		(238)
Other current liabilities	—		(860)		—
Operating lease liabilities	(13,340)		(1,519)		(1,586)
Finance lease liabilities	(80,026)		(27,945)		—
Deferred tax and other liabilities	(4,495)		(3,290)		(2,911)
Net assets acquired	$	702,024	$	290,298	$	189,018

(1)For the Packet Acquisition, the adjustments made from the provisional amounts reported as of March 31, 2020 primarily resulted in a decrease in intangible assets of $10.1 million and an increase in goodwill of $7.5 million. The changes in fair value of acquired assets and liabilities assumed did not have a significant impact on the Company's results of operations for any reporting periods prior to December 31, 2020.

(2)For the Axtel Acquisition, there were no purchase price allocation adjustments since the provisional amounts reported as of March 31, 2020.

Property, plant and equipment - The fair values of property, plant and equipment acquired from these three acquisitions were 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.

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	$	75,631	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. The Company 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.

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The fair value of the Packet trade name was estimated using the relief from royalty method under the income approach. The Company 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.

Goodwill

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 the Company's Americas region. Goodwill from the Bell Acquisition is expected to be deductible for local tax purposes while goodwill from the Packet and Axtel Acquisitions are not amortizable for local tax purposes.

Revenues and net income and loss from operations

The operating results of these three acquisitions are reported in the Americas region following the dates of acquisitions. During the year ended December 31, 2020, the Company's results of operations include $78.0 million of revenues and $41.0 million of net loss from operations from the Bell, Packet and Axtel Acquisitions. The net loss during the year ended December 31, 2020 was partially attributable to the $16.1 million stock-based compensation expense incurred to accelerate the vesting of certain Packet employees’ unvested Packet equity awards at the close of the Packet Acquisition.

Transaction costs

During the year ended December 31, 2020, the Company incurred total transaction costs of $36.5 million for these three acquisitions.

Pending Acquisition

On August 7, 2020, the Company entered into an agreement to purchase the India operations of GPX Global Systems, Inc. ("GPX India"), representing two data centers in Mumbai, India for approximately $161.0 million in an all-cash transaction (the “GPX India Acquisition”). The GPX India Acquisition is expected to close in the second quarter of 2021, subject to customary closing conditions including regulatory approval. Upon the close of the acquisition, the operating results of the acquired business will be reported in the Asia-Pacific region.

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.

2018 Acquisitions

On April 18, 2018, the Company acquired all of the equity interests in Metronode from the Ontario Teachers' Pension Plan Board for a cash purchase price of A$1.034 billion, or approximately $804.6 million at the exchange rate in effect on April 18, 2018. Metronode operated 10 data centers in six metro areas in Australia.

On April 2, 2018, the Company completed the acquisition of Infomart Dallas, including its operations and tenants, from ASB Real Estate Investments, for total consideration of approximately $804.0 million. Upon acquisition, the Company effectively terminated the leases and settled the related financing obligations and other liabilities related to the leases for approximately $170.3 million and $1.9 million, respectively, and recognized a loss on debt extinguishment of $19.5 million.

The Company incurred transaction costs of approximately $31.1 million during the year ended December 31, 2018 for both acquisitions. The Company's results of operations include $78.7 million of revenues and an

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insignificant amount of net income from operations from the combined operations of Metronode and Infomart Dallas during the year ended December 31, 2018.

4. Earnings Per Share

The following table sets forth the computation of basic and diluted EPS for the years ended December 31 (in thousands, except per share amounts):


	2020		2019		2018
Net income	$	370,074	$	507,245	$	365,359
Net (income) loss attributable to non-controlling interests	(297)		205		—
Net income attributable to Equinix	$	369,777	$	507,450	$	365,359

Weighted-average shares used to calculate basic EPS	87,700		84,140		79,779
Effect of dilutive securities:
Employee equity awards	710		539		418
Weighted-average shares used to calculate diluted EPS	88,410		84,679		80,197

EPS attributable to Equinix:
Basic EPS	$	4.22	$	6.03	$	4.58
Diluted EPS	$	4.18	$	5.99	$	4.56

The following table sets forth potential shares of common stock that are not included in the diluted EPS calculation above because to do so would be anti-dilutive for the years ended December 31 (in thousands):


	2020	2019	2018


Common stock related to employee equity awards	19	21	265
Total	19	21	265

5. Assets Held for Sale

Sale of xScale™ data center facilities in Europe

In June 2019, the Company entered into an agreement to form 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**™** data centers in Europe, with ownership upon close for GIC and the Company being established at 80% and 20%, respectively. In connection with the transaction, the Company agreed to sell its London 10 and Paris 8 data centers, as well as certain construction development and leases in London and Frankfurt to the EMEA Joint Venture. The assets and liabilities of these data center sites, which were included within the Company's EMEA region, were classified as held for sale as of June 30, 2019. On October 8, 2019, the Company closed the transaction, including the sale of these sites to the EMEA Joint Venture in exchange for a total consideration, which is comprised of 1) net cash proceeds of $351.8 million and 2) contingent consideration with fair value of approximately $39.3 million, receivable upon completion of certain performance milestones, primarily contingent on the local regulatory approvals for certain sites. As part of the transaction, the Company recorded liabilities of $41.4 million within other liabilities on the consolidated balance sheet, which represents its obligation to complete future construction for certain sites sold. During the year ended December 31, 2019, the Company recognized a total gain of $45.1 million on the sale of these xScale™ data center facilities.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In September 2020, the Company entered into an agreement to sell its Paris 9 ("PA9") data center to the EMEA Joint Venture. The assets and liabilities of the PA9 data center, which were included within the Company's EMEA region, were classified as held for sale as of September 30, 2020. On December 15, 2020, the Company closed the transaction for a total consideration of $131.5 million, which is comprised of 1) cash proceeds of $124.6 million, 2) a contract asset with a fair value of $5.6 million and 3) an insignificant amount of contingent consideration that is receivable upon completion of certain performance milestones. During the year ended December 31, 2020, the Company recognized an insignificant loss on the sale of the PA9 data center. In connection with this transaction, the Company has a commitment with the EMEA Joint Venture to complete a residual portion of the PA9 data center for an estimated cost of $17.7 million on December 31, 2020, reimbursable upon completion.

The contingent consideration recognized on both EMEA Joint Venture transactions are considered derivatives and are remeasured at 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 December 31, 2020 and 2019, the total fair value of the contingent consideration was $44.2 million and $40.1 million, respectively, which was included in other current assets and other assets on the consolidated balance sheet. Changes in the fair value of the contingent consideration were recorded in gain (loss) on asset sales on the consolidated statement of operations.

Sale of xScale™ data center facilities in Asia-Pacific

In April 2020, the Company entered into an agreement to form its 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”), with ownership upon close for GIC and the Company being established at 80% and 20%, respectively. The assets and liabilities of three Japan xScale**™** data center sites, the Osaka 2, Tokyo 12, and Tokyo 14 development sites, which were included within the Company's Asia-Pacific region, were classified as held for sale as of June 30, 2020. In the third quarter of 2020, the Company recorded an impairment charge of $7.3 million, reducing the carrying value of the development site assets to the estimated fair value less cost to sell. On December 17, 2020, the Company closed the transaction including the sale of the three development sites to the Asia-Pacific Joint Venture in exchange for $209.8 million of cash proceeds and $15.6 million of receivables. During the year ended December 31, 2020, the Company recognized an insignificant gain on the sale of these xScale**™** data center development sites.

The Company's investments in the EMEA Joint Venture and the Asia-Pacific Joint Venture are accounted for using the equity method of accounting. For further information, see Note 6 below.

Sale of New York 12 ("NY12") data center

In January 2019, the Company entered into an agreement to sell its NY12 data center, which was reported in its Americas' region. The assets of the NY12 data center to be divested were classified as held for sale as of March 31, 2019. During the year ended December 31, 2019, the Company recorded an impairment charge of $15.8 million, reducing the carrying value of NY12 assets to the estimated fair value less cost to sell. The transaction closed in October 2019 and the gain on sale recognized was insignificant.

6. Equity Method Investments

The following table summarizes the equity method investments as of December 31 (in thousands):


Investee	Ownership Percentage		2020		2019
EMEA Joint Venture with GIC	20	%	$	101,892	$	51,092
Asia-Pacific Joint Venture with GIC	20	%	43,432		—
Other	Various		17,747		8,645
Total			$	163,071	$	59,737

F-28

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

EMEA Joint Venture

As described in Note 5 above, the Company and GIC closed the EMEA Joint Venture transaction on October 8, 2019. The Company concluded the EMEA Joint Venture is not a VIE because its equity investors have the characteristics of a controlling financial interest and it is sufficiently capitalized to sustain its operations, requiring additional funding from its partners only when expanding operations. Upon closing the EMEA Joint Venture, the Company recorded its initial 20% partnership interest at fair value of $41.9 million, which was subsequently adjusted for cash contributions and the Company's share of the income and losses of the investees.

During the year ended December 31, 2020, the Company made additional equity contributions of $48.0 million to the EMEA Joint Venture, including an additional contribution of $10.6 million in connection with the sale of the PA9 data center. The Company's share of income and losses of equity method investments from this joint venture, which is attributable to the Company's EMEA region, was insignificant for the years ended December 31, 2020 and 2019 and was included in other income on the consolidated statement of operations.

The Company committed to make future equity contributions to the EMEA Joint Venture for funding its future development. As of December 31, 2020, the Company had future equity contribution commitments of €13.8 million and £6.6 million, or $25.8 million in total at the exchange rate in effect on December 31, 2020.

Variable Interest Entity

Asia-Pacific Joint Venture

As described in Note 5 above, the Company closed the Asia-Pacific Joint Venture with GIC on December 17, 2020 to develop and operate xScale**™** data centers in the Asia-Pacific region. The Company provides certain management services to the Asia-Pacific Joint Venture operations and earns 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 result, it was determined to be a VIE. The power to direct the activities of the Asia-Pacific Joint Venture that most significantly impact economic performance 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 the Company and GIC. The Company 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, the Company recorded its initial 20% partnership interest at fair value of ¥4.4 billion or $42.8 million in total at the exchange rate in effect on December 31, 2020. The Company's share of income and losses of equity method investments from this joint venture, which was attributable to the Company's Asia-Pacific region, was not significant for the period from the closing date through December 31, 2020.

The Company committed to make future equity contributions to the Asia-Pacific Joint Venture for funding its future development. As of December 31, 2020, the Company had future equity contribution commitments of ¥6.3 billion, or $60.7 million in total at the exchange rate in effect on December 31, 2020.

In addition to the investment in Asia-Pacific Joint Venture, the company also had ¥1.7 billion or $16.9 million, in total at the exchange rate in effect on December 31, 2020, 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 consolidated balance sheet as of December 31, 2020.

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 ¥21.5 billion and ¥10.0 billion, respectively, or $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, the Company and its joint venture partner GIC 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 construction phases.

F-29

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company's maximum exposure to loss related to this unconsolidated VIE is limited to its 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 December 31, 2020, the Company's maximum exposure to loss related to the Asia-Pacific Joint Venture was approximately ¥12.4 billion or $121.1 million in total at the exchange rate in effect on December 31, 2020.

7. Balance Sheet Components

Cash, Cash Equivalents and Short-Term Investments

Cash, cash equivalents and short-term investments consisted of the following as of December 31 (in thousands):


	2020		2019
Cash and cash equivalents:
Cash	$	993,798	$	983,030
Cash equivalents:
Money market funds	611,071		886,547

Total cash and cash equivalents	1,604,869		1,869,577
Short-term investments:
Certificates of deposit	4,373		7,583
Publicly traded equity securities	159		2,779
Total short-term investments	4,532		10,362
Total cash, cash equivalents and short-term investments	$	1,609,401	$	1,879,939

As of December 31, 2020 and 2019, cash and cash equivalents included investments which were readily convertible to cash and had original maturity dates of 90 days or less. The maturities of certificates of deposit classified as short-term investments were one year or less as of December 31, 2020 and 2019. The Company does not have any certificates of deposits with maturities greater than one year as of December 31, 2020 and 2019.

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and generally do not bear interest. Accounts receivable, net, consisted of the following as of December 31 (in thousands):


	2020		2019
Accounts receivable	$	687,415	$	702,160
Allowance for credit losses	(10,677)		(13,026)
Accounts receivable, net	$	676,738	$	689,134

F-30

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the activity of the Company's allowance for credit losses (in thousands):


Balance as of December 31, 2017	$	18,228
Provision for doubtful accounts	7,236
Net write-offs	(8,396)
Impact of foreign currency exchange	(1,118)
Balance as of December 31, 2018	15,950
Provision for doubtful accounts	8,459
Net write-offs	(11,341)
Impact of foreign currency exchange	(42)
Balance as of December 31, 2019	13,026
Adjustments due to adoption of ASU 2016-13	900
Provision for credit losses	5,069
Net write-offs	(10,050)
Impact of foreign currency exchange	1,732
Balance as of December 31, 2020	$	10,677

Other Current Assets

Other current assets consisted of the following as of December 31 (in thousands):


	2020		2019
Prepaid expenses	$	61,424	$	55,954
Taxes receivable	125,614		122,823
Restricted cash, current	11,135		7,090
Other receivables	44,333		36,350
Derivative instruments	8,906		25,426
Contract assets, current	13,534		10,033
Other current assets (1)	58,070		45,867
Total other current assets	$	323,016	$	303,543

(1)Other current assets included $44.2 million and $34.3 million of the current portion of the fair value of the contingent consideration from the sale of xScale™ data center facilities to the EMEA Joint Venture as of December 31, 2020 and 2019, respectively. See Note 5 for further discussion.

F-31

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following as of December 31 (in thousands):


	2020		2019
Core systems	$	9,659,908	$	8,131,835
Buildings	6,557,121		5,398,525
Leasehold improvements	1,946,644		1,764,058
Construction in progress	1,363,917		1,002,104
Personal property (1)	1,207,669		1,009,701
Land	944,094		781,024
	21,679,353		18,087,247
Less accumulated depreciation	(7,176,269)		(5,934,650)
Property, plant and equipment, net	$	14,503,084	$	12,152,597

(1)Personal property included $885.5 million and $687.4 million of capitalized internal-use software as of December 31, 2020 and 2019, respectively.

Goodwill and Other Intangibles

The following table presents goodwill and other intangible assets, net, for the years ended December 31, 2020 and 2019 (in thousands):


	2020		2019
Goodwill:
Americas	$	2,212,782	$	1,741,689
EMEA	2,611,166		2,426,306
Asia-Pacific	648,605		613,863
	$	5,472,553	$	4,781,858
Intangible assets, net:
Intangible assets - customer relationships	$	2,891,060	$	2,712,701
Intangible assets - trade names	11,512		46,601
Intangible assets - in-place leases	33,770		33,295
Intangible assets - licenses	9,697		9,697
Intangible assets - at-the-money lease contracts (1)	64,905		—
Intangible assets - other	12,802		6,402
	3,023,746		2,808,696
Accumulated amortization - customer relationships	(818,370)		(646,632)
Accumulated amortization - trade names	(2,337)		(37,885)
Accumulated amortization - in-place leases	(20,037)		(14,329)
Accumulated amortization - licenses	(6,600)		(4,529)
Accumulated amortization - other	(5,457)		(2,932)
	(852,801)		(706,307)
Total intangible assets, net	$	2,170,945	$	2,102,389

(1) In December 2020, the Company acquired an at-the-money lease contract intangible asset through an asset acquisition in Amsterdam. This intangible asset represents premiums paid to acquire a land lease at market terms. The lease has a remaining lease term of 12 years with available renewal options in 50-year increments. The intangible asset has an estimated amortization period of 12 years. The total purchase consideration for this asset acquisition was $49.4 million and the

F-32

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Company recorded $16.1 million of deferred tax liability in connection with this purchase. The transaction was accounted for as an asset acquisition since substantially all of the fair value of the acquired assets is for the identified at-the-money lease intangible asset.

Changes in the carrying amount of goodwill by geographic regions are as follows (in thousands):


	Americas		EMEA		Asia-Pacific		Total
Balance as of December 31, 2018	$	1,745,804	$	2,474,164	$	616,420	$	4,836,388
Purchase accounting - acquisition	—		25,863		(3,683)		22,180
Sale of xScale data center facilities	—		(59,246)		—		(59,246)
Sale of NY12 data center	(950)		—		—		(950)
Impact of foreign currency exchange	(3,165)		(14,475)		1,126		(16,514)
Balance as of December 31, 2019	1,741,689		2,426,306		613,863		4,781,858
Purchase of Packet	230,620		—		—		230,620
Purchase of Bell	170,548		—		—		170,548
Purchase of Axtel	78,902		—		—		78,902
Sale of xScale data center facilities	—		—		(7,306)		(7,306)
Impact of foreign currency exchange	(8,977)		184,860		42,048		217,931
Balance as of December 31, 2020	$	2,212,782	$	2,611,166	$	648,605	$	5,472,553

Changes in the net book value of intangible assets by geographic regions are as follows (in thousands):


	Americas		EMEA		Asia-Pacific		Total
Balance as of December 31, 2017	$	1,646,373	$	631,219	$	107,380	$	2,384,972
Infomart Dallas acquisition	65,847		—		—		65,847
Metronode acquisition	—		—		128,229		128,229
Other acquisitions	—		8,342		—		8,342
Write-off of intangible asset	(334)		(1,661)		(3)		(1,998)
Amortization of intangibles	(125,683)		(62,283)		(15,450)		(203,416)
Impact of foreign currency exchange	(7,232)		(31,757)		(9,691)		(48,680)
Balance as of December 31, 2018	1,578,971		543,860		210,465		2,333,296
ASC 842 adoption adjustment	(108)		(20,692)		(2,405)		(23,205)
Switch AMS1 data center acquisition	—		4,889		—		4,889
Asset sales - NY12 data center	(8,412)		—		—		(8,412)
Other	—		1,096		472		1,568
Amortization of intangibles	(125,390)		(54,432)		(16,456)		(196,278)
Impact of foreign currency exchange	(1,769)		(8,157)		457		(9,469)
Balance as of December 31, 2019	1,443,292		466,564		192,533		2,102,389
Axtel acquisition	22,750		—		—		22,750
Packet acquisition	58,500		—		—		58,500
Bell acquisition	75,631		—		—		75,631
Other asset acquisition(1)	—		64,905		—		64,905
Amortization of intangibles	(133,608)		(49,417)		(16,022)		(199,047)
Impact of foreign currency exchange	(3,476)		35,975		13,318		45,817
Balance as of December 31, 2020	$	1,463,089	$	518,027	$	189,829	$	2,170,945

F-33

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(1) For further discussion, refer to footnote 1 of the table on the previous page.

The Company's goodwill and intangible assets which are denominated in currencies other than the U.S. Dollar are subject to foreign currency fluctuations. The Company's foreign currency translation gains and losses, including goodwill and intangibles, are a component of other comprehensive income and loss.

Estimated future amortization expense related to these intangibles is as follows (in thousands):


Years ending:
2021	$	206,244
2022	201,455
2023	199,698
2024	198,323
2025	195,742
Thereafter	1,169,483
Total	$	2,170,945

Other Assets

Other assets consisted of the following as of December 31 (in thousands):


	2020		2019
Deferred tax assets, net	$	66,424	$	35,806
Prepaid expenses (1)	82,443		61,690
Debt issuance costs, net	4,261		6,395
Deposits	69,043		56,567
Restricted cash	9,691		9,946
Derivative instruments	2,793		32,280
Contract assets, non-current	54,050		31,521
Contract costs	267,978		229,205
Equity method investments	163,071		59,737
Other assets (2)	56,293		57,641
Total other assets	$	776,047	$	580,788

(1)As of December 31, 2020, the Company had $21.1 million of capitalized CCA implementation costs, net.

(2)In connection with the Metronode Acquisition in 2018, the Company had indemnification assets of $42.8 million and $37.7 million, as of December 31, 2020 and 2019, respectively, which represented the seller's obligation under the purchase agreement to reimburse pre-acquisition tax liabilities settled after the acquisition.

F-34

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of December 31 (in thousands):


	2020		2019
Accounts payable	$	77,705	$	52,232
Accrued compensation and benefits	317,117		241,361
Accrued interest	79,437		103,345
Accrued taxes (1)	153,804		135,099
Accrued utilities and security	76,910		107,404
Accrued other	139,889		121,277
Total accounts payable and accrued expenses	$	844,862	$	760,718

(1)Accrued taxes included income taxes payable of $59.8 million and $57.7 million as of December 31, 2020 and 2019, respectively.

Other Current Liabilities

Other current liabilities consisted of the following as of December 31 (in thousands):


	2020		2019
Deferred revenue, current	$	101,258	$	76,193
Customer deposits	17,115		16,707
Derivative instruments	188,726		31,596

Dividends payable, current	10,873		9,029
Asset retirement obligations	3,993		2,081
Other current liabilities	32,403		18,332
Total other current liabilities	$	354,368	$	153,938

Other Liabilities

Other liabilities consisted of the following as of December 31 (in thousands):


	2020		2019
Asset retirement obligations	$	109,776	$	100,334
Deferred tax liabilities, net	290,366		247,179
Deferred revenue, non-current	71,242		46,555

Accrued taxes	178,371		146,046
Dividends payable, non-current	7,947		7,108
Customer deposits	1,088		9,306
Derivative instruments	211,733		4,017
Other liabilities (1)	78,476		61,180
Total other liabilities	$	948,999	$	621,725

(1)Other liabilities included $46.0 million and $41.4 million of the Company’s obligation to pay for future construction for certain sites sold as a part of the EMEA Joint Venture transaction as of December 31, 2020 and 2019, respectively. See Note 5 for further discussion.

F-35

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the activities of the Company's asset retirement obligation ("ARO") (in thousands):


Asset retirement obligations as of December 31, 2017	$	98,539
Additions	5,126
Adjustments (1)	(11,288)
Accretion expense	6,285
Impact of foreign currency exchange	(1,999)
Asset retirement obligations as of December 31, 2018	96,663
Additions	6,980
Adjustments (1)	(7,969)
Accretion expense	6,290
Impact of foreign currency exchange	451
Asset retirement obligations as of December 31, 2019	102,415
Additions	5,909
Adjustments (1)	(4,241)
Accretion expense	6,331
Impact of foreign currency exchange	3,355
Asset retirement obligations as of December 31, 2020	$	113,769

(1)The ARO adjustments are primarily due to lease amendments and acquisition of real estate assets, as well as other adjustments.

8. Derivatives and Hedging Instruments

Derivatives Designated as Hedging Instruments

Net Investment Hedges. The Company is exposed to the impact of foreign exchange rate fluctuations on the value of investments in its 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 entered into various foreign currency debt obligations, which are designated as hedges against the Company's net investments in foreign subsidiaries. As of December 31, 2020 and 2019, the total principal amounts of foreign currency debt obligations designated as net investment hedges were $1.9 billion and $4.1 billion, respectively.

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

From time to time, the Company uses foreign currency forward contracts to hedge against the effect of foreign exchange rate fluctuations on a portion of its net investment in its foreign subsidiaries. As of December 31, 2020, the total notional amount of foreign currency forward contracts designated as net investment hedges was $355.6 million. The Company had no foreign currency forward contracts designated as net investment hedges outstanding as of December 31, 2019.

F-36

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The effect of net investment hedges on accumulated other comprehensive income and the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018 was as follows (in thousands):


Amount of gain or (loss) recognized in accumulated other comprehensive income:
			Years Ended December 31,
			2020			2019			2018
Foreign currency debt			$	(208,281)		$	47,033		$	218,269
Cross-currency interest rate swaps (included component) (1)			(218,843)			15,514			—
Cross-currency interest rate swaps (excluded component) (2)			(347)			10,737			—
Foreign currency forward contracts (included component) (1)			(17,115)			—			—
Foreign currency forward contracts (excluded component) (3)			32			—			—
Total			$	(444,554)		$	73,284		$	218,269

Amount of gain or (loss) recognized in earnings:
	Location of gain or (loss)		Years Ended December 31,
		2020			2019			2018
Cross-currency interest rate swaps (excluded component) (2)	Interest expense		$	27,196		$	19,261		$	—
Foreign currency forward contracts (excluded component) (3)	Interest expense		42			—			—
Total			$	27,238		$	19,261		$	—

(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 foreign currency translation exposure for forecasted revenues and expenses in its 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 to hedge this exposure are designated as cash flow hedges. As of December 31, 2020 and 2019, the total notional amounts of these foreign exchange contracts were $912.9 million and $824.8 million, respectively.

As of December 31, 2020, the Company's foreign currency cash flow hedge instruments had maturity dates ranging from January 2021 to December 2022 and the Company 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 currency cash flow hedge instruments had maturity dates ranging from January 2020 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 revenues and expenses as they mature in the next 12 months.

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 Company hedges the interest rate exposure created by anticipated fixed rate debt issuances through the use of treasury locks and swap locks (collectively, interest rate locks), which are designated as cash flow hedges. As of December 31, 2020 and 2019, the Company had no interest rate locks outstanding. During the year ended December 31, 2020, interest rate locks with a combined aggregate notional amount of $1.9 billion were settled related to the issuance of Senior Notes in 2020 and anticipated issuance of Senior Notes in 2021. The settlement of these contracts during 2020, resulted in a loss of $31.6 million, which was deferred and included as a component of other comprehensive income (loss), and is being amortized to interest expense over the term of the forecasted hedged transaction which is equivalent to the term of the interest rate locks. As of December 31, 2020, the Company recorded a net loss of $4.1 million within accumulated other comprehensive income (loss) to be reclassified to interest expense in the next 12 months for interest rate locks.

F-37

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

During the fourth quarter of 2019, interest rate locks with a combined aggregate notional amount of $1.5 billion were entered into and settled. The settlement of these contracts during the fourth quarter of 2019, resulted in a gain of $5.1 million, which was deferred and included as a component of other comprehensive income (loss), and is being amortized to interest expense over the term of the forecasted hedged transaction which is equivalent to the term of the interest rate locks. As of December 31, 2019, the net gain in accumulated other comprehensive income (loss) to be reclassified to interest expense in the next 12 months for interest rate locks was not significant.

The effect of cash flow hedges on accumulated other comprehensive income and the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018 was as follows (in thousands):


Amount of gain or (loss) recognized in accumulated other comprehensive income:
		Years Ended December 31,
		2020		2019		2018
Foreign currency forward and option contracts (included component) (1)		$	(68,573)	$	(9,945)	$	58,227
Foreign currency option contracts (excluded component) (2)		1,655		(1,807)		—
Interest rate locks		(30,393)		4,972		—
Total		$	(97,311)	$	(6,780)	$	58,227

Amount of gain or (loss) reclassified from accumulated other comprehensive income to income:
		Years Ended December 31,
	Location of gain or (loss)	2020		2019		2018
Foreign currency forward contracts	Revenues	$	37,198	$	80,046	$	(30,603)
Foreign currency forward contracts	Costs and operating expenses	(19,890)		(41,262)		15,341
Interest rate locks	Interest Expense	(1,204)		79		—
Total		$	16,104	$	38,863	$	(15,262)

Amount of gain or (loss) excluded from effectiveness testing and included in income:
		Years Ended December 31,
	Location of gain or (loss)	2020		2019		2018
Foreign currency forward contracts	Other income (expense)	$	—	$	88	$	16,470
Foreign currency option contracts (excluded component) (2)	Revenues	(1,761)		(1,082)		—
Total		$	(1,761)	$	(994)	$	16,470

(1)Included component represents foreign exchange spot rates.

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

Derivatives Not Designated as Hedging Instruments

Embedded Derivatives. The Company is deemed to have foreign currency forward contracts embedded in certain of the Company's 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 balance sheet at their fair value. The majority of these embedded derivatives arise as a result of the Company's foreign subsidiaries pricing their customer contracts in U.S. Dollars.

Economic Hedges of Embedded Derivatives. The Company uses foreign currency forward contracts to manage the foreign exchange risk associated with the Company's 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 also uses foreign currency forward contracts to manage the foreign exchange risk associated with certain foreign currency-denominated monetary assets and liabilities. As a

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

result of foreign currency fluctuations, the U.S. Dollar equivalent values of its 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 December 31, 2020 and 2019, the total notional amounts of these foreign currency contracts were $3.4 billion and $2.5 billion, respectively.

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


Amount of gain or (loss) recognized in earnings:
		Years Ended December 31,
	Location of gain or (loss)	2020		2019		2018
Embedded derivatives	Revenues	$	(3,043)	$	63	$	618
Economic hedge of embedded derivatives	Revenues	2,142		550		(877)
Foreign currency forward contracts	Other income (expense)	(127,648)		36,846		91,233
Total		$	(128,549)	$	37,459	$	90,974

Fair Value of Derivative Instruments

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


	December 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	$	351	$	52,804	$	24,853	$	5,898
Net investment hedges
Cross-currency interest rate swaps	—		192,939		26,251		—
Foreign currency forward contracts	—		17,041		—		—
Total designated as hedging	351		262,784		51,104		5,898

Not designated as hedging instruments:
Embedded derivatives	3,255		3,858		4,595		2,268
Economic hedges of embedded derivatives	4,372		12		1,367		—
Foreign currency forward contracts	3,721		133,805		641		27,446
Total not designated as hedging	11,348		137,675		6,603		29,714
Total Derivatives	$	11,699	$	400,459	$	57,707	$	35,612

(1)As presented in the Company's consolidated balance sheets within other current assets and other assets.

(2)As presented in the Company's consolidated balance sheets within other current liabilities and other liabilities.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Offsetting Derivative Assets and Liabilities

The Company presents its derivative instruments and the accrued interest related to cross-currency interest rate swaps at gross fair values in the consolidated balance sheets. The Company enters into master netting agreements with its 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 consolidated balance sheets, the Company does 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 December 31, 2020 and 2019 (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
December 31, 2020
Derivative assets	$	38,447	$	—	$	38,447	$	(35,100)	$	3,347
Derivative liabilities	415,628		—		415,628		(35,100)		380,528

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

9. Fair Value Measurements

Valuation Methods

Fair value estimates are made as of a specific point in time based on methods using the market approach valuation method which uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities or other valuation techniques. These techniques involve uncertainties and are affected by 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 1 of the fair value hierarchy because they are valued using quoted prices for identical instruments in active markets. The fair value 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 such 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.

The Company uses the specific identification method in computing realized gains and losses. Realized gains and losses from the sale of investments are included within other income (expense) in the Company's 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.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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.

Other than the assets and liabilities that were classified as held for sale as described in Note 5 above, the Company did not have any nonfinancial assets or liabilities measured at fair value on a recurring basis during the years ended December 31, 2020 and 2019.

The Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 were as follows (in thousands):


	Fair Value at December 31, 2020			Fair Value Measurement Using
			Level 1			Level 2
Assets:
Money market and deposit accounts	$	611,071		$	611,071		$	—
Publicly traded equity securities	159			159			—
Certificates of deposit	4,373			—			4,373
Derivative instruments (1)	11,699			—			11,699
	$	627,302		$	611,230		$	16,072
Liabilities:
Derivative instruments (1)	$	400,459		$	—		$	400,459

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

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


	Fair Value at December 31,		Fair Value Measurement Using
	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
	$	954,616	$	889,326	$	65,290
Liabilities:
Derivative instruments (1)	$	35,612	$	—	$	35,612

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

Other than the contingent consideration related to the EMEA Joint Venture as described in Note 6 above, the Company did not have any Level 3 financial assets or financial liabilities during the years ended December 31, 2020 and 2019.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

10. 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 five years. The Company determined that the two remaining renewal options of five-years each are also reasonably certain to be exercised and; therefore concluded the lease term is 15 years and 7 months. The lease was previously accounted for as an operating lease. The Company reassessed the lease classification of the SV4 lease 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.

Hong Kong 1 ("HK1") Data Center

In March 2020, the Company entered into four lease agreements with the landlord to lease multiple premises in the HK1 Data Center. The first lease commenced in March 2020 with an initial term of 18 years with no renewal option available. The Company assessed the lease classification of that space at the commencement date and determined the lease should be accounted for as a finance lease. The Company will assess the remaining space when the leases commence. During the three months ended March 31, 2020, the Company recorded finance lease ROU asset and liability of $163.0 million Hong Kong dollars or $21.0 million at the exchange rate in effect on March 31, 2020.

In November 2020, the Company took possession and commence the lease of the second space in the HK1 Data Center with an initial lease term of approximately 17 years with no renewal option available. The Company assessed the lease classification of the second space at the commencement date and determined the lease should be accounted for as a finance lease. During the three months ended December 31, 2020, the Company recorded finance lease ROU asset and liability of $65.9 million Hong Kong dollars or $8.5 million at the exchange rate in effect on December 31, 2020.

Headquarters Office in Redwood City, California ("HQ Office")

In April 2020, the Company entered into a lease amendment to (i) extend the lease term of the existing space for another 10.5 years and (ii) lease additional space within its HQ Office building, which commenced on June 1, 2020. Both spaces have two five-year renewal options which the Company determined were not reasonably certain to be exercised. Therefore, the concluded lease term for both spaces was approximately 11 years, expiring on March 31, 2031. The existing space was previously accounted for as a finance lease. The Company concluded that the building and land components for both spaces should be accounted for as finance leases and operating leases, respectively. During the three months ended June 30, 2020, the Company recorded incremental finance lease ROU asset and liability of $42.2 million and operating lease ROU asset and liability of $8.3 million.

Singapore 1 ("SG1") Data Center

In May 2020, the Company exercised a three-year renewal option on the lease of the existing space and entered into a lease agreement to lease additional space in the SG1 Data Center. The building and land were originally accounted for as a finance lease and operating lease, respectively. The Company determined the remaining five three-year renewal options were reasonably certain to be exercised and therefore, the concluded lease term was 18 years. The Company reassessed the lease classification and determined that the lease should be accounted for as finance lease. Land was determined to not be a component of the lease as the Company no longer controlled substantially all of the economic benefits from its use. The Company recorded incremental finance lease ROU asset and liability of $99.5 million Singapore dollars, or approximately $71.4 million, and de-recognized operating lease ROU asset and liability of $11.4 million Singapore dollars, or approximately $8.1 million, at the exchange rate in effect on June 30, 2020, during the three months ended June 30, 2020.

Abu Dhabi 1 ("AD1") Data Center

In June 2020, the Company entered into two lease agreements to lease additional space in the AD1 Data Center. The Company concluded lease terms of both leases are 10 years, inclusive of a three-year renewal option

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

for one of the leases determined to be reasonably assured of exercise. The Company assessed the lease classifications and determined that the leases should be accounted for as finance leases. During the three months ended June 30, 2020, the Company recorded finance lease ROU assets and liabilities of 261.9 million United Arab Emirates Dirham in aggregate, or approximately $71.3 million at the exchange rate in effect on June 30, 2020.

Singapore Office ("SGO")

In April 2020, the Company entered into an office lease agreement, which commenced on August 1, 2020 with an initial term of seven years, two three-year renewal options and a one-time early termination option for a certain floor after the third year of the lease. The Company determined that the renewal options and the early termination option were not reasonably certain to be exercised and therefore, concluded the lease term was seven years. The Company assessed the lease classification at the commencement date and concluded that the lease should be accounted for as an operating lease. During the three months ended September 30, 2020, the Company recorded operating lease ROU asset and liability of $64.2 million Singapore dollars, or approximately $47.1 million, at the exchange rate in effect on September 30, 2020.

Seoul 1 ("SL1") Data Center

In September 2020, the phase 2 from a previously signed lease for the SL1 data center was delivered and commenced, with an initial lease term of approximately four years and three five-year renewal options. The Company concluded that one renewal option of five years is reasonably certain to be exercised and therefore, the concluded lease term was approximately nine years. The Company assessed the lease classification of the lease at the commencement date and determined the lease should be accounted for as a finance lease. During the three months ended September 30, 2020, the Company recorded finance lease ROU asset and liability of 31,777 million Korean Won and 30,386 million Korean Won, respectively, or $27.2 million and $26.0 million, respectively, at the exchange rate in effect on September 30, 2020.

Lease Expenses

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


	Years Ended December 31,
	2020		2019
Finance lease cost
Amortization of right-of-use assets (1)	$	120,169	$	82,893
Interest on lease liabilities	113,699		110,688
Total finance lease cost	233,868		193,581

Operating lease cost	217,299		219,021
Variable lease cost	13,588		1,763
Total lease cost	$	464,755	$	414,365

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

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Other Information

Other information related to leases is as follows (in thousands, except years and percent):


	Years Ended December 31,
	2020			2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	109,558		$	107,000
Operating cash flows from operating leases	206,512			210,848
Financing cash flows from finance leases	115,288			126,486

Right-of-use assets obtained in exchange for lease obligations: (1)
Finance leases	$	487,592		$	387,808
Operating leases	108,797			145,025

	As of December 31,
	2020			2019
Weighted-average remaining lease term - finance leases (2)	14 years			15 years
Weighted-average remaining lease term - operating leases (2)	12 years			13 years
Weighted-average discount rate - finance leases	7		%	9		%
Weighted-average discount rate - operating leases	4		%	4		%
Finance lease ROU assets (3)	$	1,688,032		$	1,277,614

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

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

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

Maturities of Lease Liabilities

Maturities of lease liabilities as of December 31, 2020 are as follows (in thousands):


Year ended December 31,	Operating Leases		Finance Leases		Total
2021	$	199,291	$	232,415	$	431,706
2022	205,411		221,058		426,469
2023	188,724		215,909		404,633
2024	176,626		213,186		389,812
2025	165,437		209,424		374,861
Thereafter	1,032,186		1,928,094		2,960,280
Total lease payments	1,967,675		3,020,086		4,987,761
Plus amount representing residual property value	—		17,331		17,331
Less imputed interest	(504,841)		(1,114,918)		(1,619,759)
Total	$	1,462,834	$	1,922,499	$	3,385,333

The Company entered into lease agreements in various locations that have not yet commenced as of December 31, 2020. These leases will commence between 2021 and 2022, with lease terms of 10 to 49 years and a total lease commitment of approximately $684.1 million.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

11. Debt Facilities

Mortgage and Loans Payable

The Company's mortgage and loans payable consisted of the following as of December 31 (in thousands):


	2020		2019
Term loans	$	1,292,067	$	1,287,151
Mortgage payable and loans payable	78,903		82,967
	1,370,970		1,370,118
Less amount representing unamortized debt discount and debt issuance cost	(3,288)		(4,849)
Add amount representing unamortized mortgage premium	1,861		1,768
	1,369,543		1,367,037
Less current portion	(82,289)		(77,603)
	$	1,287,254	$	1,289,434

Senior Credit Facility

On December 12, 2017, the Company entered into a credit agreement with a group of lenders for a $3.0 billion credit facility ("Senior Credit Facility"), comprised of a $2.0 billion senior unsecured multicurrency revolving credit facility ("Revolving Facility") and an approximately $1.0 billion senior unsecured multicurrency term loan facility ("Term Loan Facility"). The Senior Credit Facility contains customary covenants, including financial covenants which require the Company to maintain certain financial coverage and leverage ratios, as well as customary events of default. The Senior Credit Facility has a five year term, maturing on December 12, 2022.

Revolving Facility

The Revolving Facility allows the Company 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. Borrowings under the Revolving Facility bear interest at a rate based on a benchmark rate defined in the credit agreement plus a margin that can vary from 0.85% to 1.40% or, at the Company's option, the base rate, which is defined as the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Bank of America prime rate and (c) one-month LIBOR plus 1% plus a margin that can vary from 0.0% to 0.4%. The Company is required to pay a quarterly letter of credit fee on the face amount of each letter of credit, which fee is based on the same margin that applies from time to time to borrowings under the Revolving Facility. The Company is also required to pay a quarterly facility fee ranging from 0.15% to 0.30% per annum based on the total Revolving Facility amount.

In March 2020, the Company borrowed a total of $250.0 million under the Revolving Facility, which was fully repaid in May 2020. As of December 31, 2020, there was no outstanding balance under the Revolving Facility. As of December 31, 2020, the Company had 37 irrevocable letters of credit totaling $74.6 million issued and outstanding under the Revolving Facility and the amount available to the Company to borrow under the Revolving Facility was approximately $1.9 billion as of December 31, 2020.

Term Loan Facility

On December 12, 2017, the Company borrowed £500.0 million and SEK 2.8 billion under the Term Loan Facility, or approximately $997.1 million at the exchange rates in effect on that date. The Company is required to repay the Term Loan Facility at the 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. The Term Loan Facility bears interest at a rate based on LIBOR plus a margin that can vary from 1.00% to 1.70%. As of December 31, 2020, the Company had £431.3 million and SEK2,415.0 million, or approximately $883.6 million in U.S. dollars at the exchange rates in effect as of December 31, 2020, outstanding under the Term Loan Facility with a weighted average effective interest rate of 1.85% per annum. Debt issuance costs related to the Term Loan Facility, net of amortization, were $1.2 million as of December 31, 2020.

On July 26, 2018, the Company entered into an amendment to its Senior Credit Facility. The amendment provided for a senior unsecured term loan in an aggregate principal amount of ¥47.5 billion (the "JPY Term Loan").

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

On July 31, 2018, the Company drew down the full ¥47.5 billion of the JPY Term Loan, or approximately $424.7 million at the exchange rate effective on July 31, 2018, and prepaid the remaining principal of its existing Japanese Yen Term Loan of ¥43.8 billion or approximately $391.3 million. The Company is required to repay the JPY Term Loan at the 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. The JPY Term Loan bears interest at a rate based on LIBOR plus a margin that can vary from 1.00% to 1.70% and contains customary covenants consistent with the Senior Credit Facility. As of December 31, 2020, total outstanding borrowings under the JPY Term Loan were ¥42.2 billion, or approximately $408.5 million at the exchange rate effective on that date, with an effective interest rate of 1.74%. Debt issuance costs, net of amortization, related to the JPY Term Loan were $2.1 million as of December 31, 2020.

364-Day Facilities

On April 15, 2020, the Company entered into a credit agreement which provided for senior unsecured 364-day term loan facilities in an aggregate principal amount 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" and together with the Closing Date Facility, the "364-Day Facilities"). On April 15, 2020, the Company 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. During the quarter ended June 30, 2020, the Company repaid all amounts outstanding under the Closing Date Facility and terminated the 364-Day Facilities. The loss on debt extinguishment incurred in connection with the redemption and termination was not significant.

Mortgage Payable

In October 2013, as a result of the Frankfurt Kleyer 90 Carrier Hotel Acquisition, the Company assumed a mortgage payable of $42.9 million with an effective interest rate of 4.25%. The mortgage payable has monthly principal and interest payments and has an expiration date of August 2022.

In December 2019, as a result of the TR2 Data Center purchase, the Company assumed a mortgage payable of $43.8 million with an effective interest rate of 3.63%. The mortgage payable has monthly principal and interest payments and has an expiration date of November 2029.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Senior Notes

The Company's senior notes consisted of the following as of December 31 (in thousands):


			2020				2019
Senior Notes	Issuance Date	Maturity Date	Amount		Effective Rate		Amount		Effective Rate
5.000% Infomart Senior Notes	April 2018	April 2021	$	150,000	4.51	%	$	450,000	4.46	%
5.375% Senior Notes due 2022	November 2014	January 2022	—		—	%	343,711		5.56	%
2.625% Senior Notes due 2024	November 2019	November 2024	1,000,000		2.79	%	1,000,000		2.79	%
2.875% Euro Senior Notes due 2024	March 2018	March 2024	—		—	%	841,500		3.08	%
1.250% Senior Notes due 2025	June 2020	July 2025	500,000		1.46	%	—		—	%
1.000% Senior Notes due 2025	October 2020	September 2025	700,000		1.18	%	—		—	%
2.875% Euro Senior Notes due 2025	September 2017	October 2025	—		—	%	1,122,000		3.04	%
2.900% Senior Notes due 2026	November 2019	November 2026	600,000		3.04	%	600,000		3.04	%
5.875% Senior Notes due 2026	December 2015	January 2026	—		—	%	1,100,000		6.03	%
2.875% Euro Senior Notes due 2026	December 2017	February 2026	611,050		3.04	%	1,122,000		3.04	%
1.800% Senior Notes due 2027	June 2020	July 2027	500,000		1.96	%	—		—	%
5.375% Senior Notes due 2027	March 2017	May 2027	1,250,000		5.51	%	1,250,000		5.51	%
1.550% Senior Notes due 2028	October 2020	March 2028	650,000		1.67	%	—		—	%
3.200% Senior Notes due 2029	November 2019	November 2029	1,200,000		3.30	%	1,200,000		3.30	%
2.150% Senior Notes due 2030	June 2020	July 2030	1,100,000		2.27	%	—		—	%
3.000% Senior Notes due 2050	June 2020	July 2050	500,000		3.09	%	—		—	%
2.950% Senior Notes due 2051	October 2020	September 2051	500,000		3.00	%	—		—	%
			9,261,050				9,029,211
Less amount representing unamortized debt discount and debt issuance cost			(92,773)				(78,030)
Add amount representing unamortized debt premium			186				1,716
			9,168,463				8,952,897
Less current portion			(150,186)				(643,224)
			$	9,018,277			$	8,309,673

Redemption of 5.375% Senior Notes due 2022

On January 2, 2020, the Company redeemed the remaining $343.7 million principal amount of the 5.375% Senior Notes due 2022. In connection with the redemption, the Company incurred $5.9 million of loss on debt extinguishment, including $4.6 million redemption premium that was paid in cash and $1.3 million related to the write-off of unamortized debt issuance costs.

1.250% Senior Notes due 2025, 1.800% Senior Notes due 2027, 2.150% Senior Notes due 2030, and 3.000% Senior Notes due 2050

On June 22, 2020, the Company issued $500.0 million aggregate principal amount of 1.250% senior notes due 2025 (the "2025 Notes"), $500.0 million aggregate principal amount of 1.800% senior notes due 2027 (the "2027 Notes"), $1.1 billion aggregate principal amount of 2.150% senior notes due 2030 (the "2030 Notes"), and $500.0 million aggregate principal amount of 3.000% senior notes due 2050 (the "2050 Notes"). Interest on these notes is payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2021. Debt issuance costs and debt discounts related to the 2025 Notes, 2027 Notes, 2030 Notes, and 2050 Notes were $5.3 million, $5.6 million, $12.9 million, and $14.2 million, respectively.

Redemption of 2.875% Euro Senior Notes due 2024 and 5.875% Senior Notes due 2026

On July 8, 2020, using a portion of the net cash proceeds from the 2025, 2027, 2030, and 2050 Notes, the Company redeemed all of the outstanding €750.0 million 2.875% Senior Notes due 2024 and $1.1 billion 5.875% Senior Notes due 2026. In connection with the redemption, the Company incurred $93.5 million of loss on debt

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

extinguishment, including $77.8 million in redemption premium that was paid in cash and $15.7 million related to the write-off of unamortized debt issuance costs.

1.000% Senior Notes due 2025, 1.550% Senior Notes due 2028, and 2.950% Senior Notes due 2051

On October 7, 2020, the Company issued $700.0 million aggregate principal amount of 1.000% Senior Notes due 2025 (the “2025 Notes”), $650.0 million aggregate principal amount of 1.550% Senior Notes due 2028 (the “2028 Notes"), and $500.0 million aggregate principal amount of 2.950% Senior Notes due 2051 (the “2051 Notes”). Interest on these notes is payable semi-annually on March 15 and September 15 of each year, commencing March 15, 2021. Debt issuance costs and debt discounts related to the 2025 Notes, 2028 Notes, and 2051 Notes were $6.2 million, $5.8 million, and $8.1 million, respectively.

Redemption of 2.875% Senior Notes due 2025 and 2.875% Senior Notes due 2026

On October 23, 2020, the Company used a portion of the net cash proceeds from the issuance of the 2025, 2028, and 2051 Notes, as described above, to fund the redemption of all of the outstanding €1.0 billion 2.875% Senior Notes due 2025 and €0.5 billion aggregate principal amount of its outstanding €1.0 billion aggregate principal amount 2.875% Senior Notes due 2026. In connection with the redemption, the Company incurred $44.2 million of loss on debt extinguishment, including $29.3 million in redemption premium that was paid in cash and $14.9 million related to the write-off of unamortized debt issuance costs.

All of the Company's senior notes are unsecured and rank equal in right of payment to the Company's existing or future senior indebtedness and senior in right of payment to the Company's existing and future subordinated indebtedness. Interest on the senior notes is paid semi-annually in arrears. The senior notes are effectively subordinated to all of the existing and future secured debt, including debt outstanding under any bank facility or secured by any mortgage, to the extent of the assets securing such debt. They are also structurally subordinated to any existing and future indebtedness and other liabilities (including trade payables) of any of the Company's subsidiaries.

Each series of senior notes is governed by an indenture and a supplemental indenture between the Company and U.S. Bank National Association, as trustee. These supplemental indentures contain covenants that limit the Company's ability and the ability of its subsidiaries to, among other things:

purchase, redeem or retire capital stock or subordinated debt(1);
incur liens;
enter into sale-leaseback transactions (1);
make investments(1); and
merge or consolidate with any other person.

(1) The supplemental indentures for the 2.875% Euro Senior Notes due 2026 and the 5.375% due 2027 contain these covenants.

As of December 31, 2020, the Company was in compliance with all covenants. Subject to compliance with the limitations described above, the Company may issue an unlimited principal amount of additional notes at later dates under the same indenture as the senior notes.

The Company is not required to make any mandatory redemption with respect to the senior notes; however, upon the event of a change in control, the Company may be required to offer to purchase the senior notes.

F-48

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Optional Redemption Schedule

Each series of the Company's senior notes, with the exception of 5.000% Infomart Senior Notes, provide for optional redemption. Two series of the Company’s senior notes provide for optional redemption as summarized below:


Senior Notes Description	Early Equity Redemption Price (1)	First Scheduled Redemption Date (2)	First Scheduled Redemption Price	Second Year Redemption Price	Third Year Redemption Price	Fourth Year (if scheduled) Redemption Price
2.875% Euro Senior Notes due 2026	102.875%	February 1, 2021	101.438%	100.719%	100.000%
5.375% Senior Notes due 2027	105.375%	May 15, 2022	102.688%	101.792%	100.896%	100.000%

(1)Within 90 days of the closing of one or more equity offerings and at any time prior to the first scheduled redemption date, the Company may redeem up to 35% of the aggregate principal amount of any series of senior notes outstanding, at the respective early equity redemption price, plus accrued and unpaid interest to the redemption date, provided that at least 65% of the aggregate principal amount of the senior notes issued in such series remains outstanding immediately after such redemption(s).

(2)On or after the first scheduled redemption date, the Company may redeem all or a part of a series of senior notes at the first scheduled redemption price plus accrued and unpaid interest thereon, if redeemed during the 12 month period beginning on the first scheduled redemption date and at reduced scheduled redemption prices during the 12 or 18 month periods beginning on the anniversaries of the first scheduled redemption date.

At any time prior to the first scheduled redemption date, the Company may redeem all or a part of any series of senior notes at a redemption price equal to 100% of the principal amount of such senior notes redeemed plus an applicable premium and accrued and unpaid interest, subject to the rights of the holders of record of such senior notes on the relevant record date to receive interest due on the relevant interest payment date.

With respect to the rest of the Notes listed below, the Company may redeem at its election, at any time or from time to time, some or all of the notes of any series before they mature. The redemption price will equal the sum of (1) an amount equal to one hundred percent (100%) of the principal amount of the notes being redeemed plus accrued and unpaid interest up to, but not including, the redemption date and (2) a make-whole premium. If the Notes are redeemed on or after the First Par Call Date listed in the table below, the redemption price will not include a make-whole premium for the applicable notes.


Senior Notes Description			First Par Call Date
2.625% Senior Notes due 2024			October 18, 2024
1.000% Senior Notes due 2025			August 15, 2025
1.250% Senior Notes due 2025			June 15, 2025
2.900% Senior Notes due 2026			September 18, 2026
1.800% Senior Notes due 2027			May 15, 2027
1.550% Senior Notes due 2028			January 15, 2028
3.200% Senior Notes due 2029			August 18, 2029
2.150% Senior Notes due 2030			April 15, 2030
3.000% Senior Notes due 2050			January 15, 2050
2.950% Senior Notes due 2051			March 15, 2051

Loss on Debt Extinguishment

During the year ended December 31, 2020, the Company recorded $145.8 million of loss on debt extinguishment primarily comprised of:

$5.9 million of loss on debt extinguishment from the redemption of the 2022 Notes, which included $4.6 million redemption premium that was paid in cash and $1.3 million related to the write-off of unamortized debt issuance costs.

F-49

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

$93.5 million of loss on debt extinguishment from the redemption of the 2024 and 2026 Notes, which included $77.8 million redemption premium that was paid in cash and $15.7 million related to the write-off of unamortized debt issuance costs.
$44.2 million of loss on debt extinguishment from the redemption of the 2025 and 2026 Notes, which included $29.3 million redemption premium that was paid in cash and $14.9 million related to the write-off of unamortized debt issuance costs.

During the year ended December 31, 2019, the Company recorded $52.8 million of loss on debt extinguishment primarily comprised of:

$52.9 million of loss on debt extinguishment from the tender and subsequent redemption of the 2022, 2023 and 2025 Notes, which included $43.3 million tender and redemption premium that was paid in cash and $9.6 million related to the write-off of unamortized debt issuance costs.

During the year ended December 31, 2018, the Company recorded $51.4 million of loss on debt extinguishment comprised of:

$17.1 million of loss on debt extinguishment as a result of amendments to leases impacting the related financing obligations;
$19.5 million of loss on debt extinguishment from the settlement of financing obligations as a result of the Infomart Dallas Acquisition;
$12.6 million of loss on debt extinguishment as a result of the settlement of financing obligations for properties purchased; and
$2.2 million of loss on debt extinguishment as a result of the redemption of the Japanese Yen Term Loan.

Maturities of Debt Instruments

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


Years ending:
2021	$	232,289
2022	1,253,106
2023	6,896
2024	1,006,395
2025	1,204,605
Thereafter	6,930,590
	$	10,633,881

Fair Value of Debt Instruments

The following table sets forth the estimated fair values of the Company's mortgage and loans payable and senior notes, including current maturities, as of December 31 (in thousands):


	2020		2019
Mortgage and loans payable	$	1,379,129	$	1,378,429

Senior notes	9,705,486		9,339,497

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 credit rating, current rates available to the Company 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).

F-50

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Interest Charges

The following table sets forth total interest costs incurred and total interest costs capitalized for the years ended December 31 (in thousands):


	2020		2019		2018
Interest expense	$	406,466	$	479,684	$	521,494
Interest capitalized	26,750		32,173		19,880
Interest charges incurred	$	433,216	$	511,857	$	541,374

Total interest paid in cash, net of capitalized interest, during the years ended December 31, 2020, 2019 and 2018 was $471.7 million, $521.6 million and $476.9 million, respectively.

12. Stockholders' Equity

The Company's authorized share capital is 300,000,000 shares of common stock and 100,000,000 shares of preferred stock, of which 25,000,000 is designated Series A, 25,000,000 is designated as Series A-1 and 50,000,000 is undesignated. As of December 31, 2020 and 2019, the Company had no preferred stock issued and outstanding.

Common Stock

In March 2019, the Company issued and sold 2,985,575 shares of common stock in a public offering pursuant to a registration statement and a related prospectus and prospectus supplement. The Company received net proceeds of approximately $1.2 billion, net of underwriting discounts, commissions and offering expenses. In May 2020, the Company issued and sold 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 received net proceeds of approximately $1.7 billion, net of underwriting discounts, commissions and offering expenses.

In August 2017, the Company established an "at the market" equity offering program (the "2017 ATM Program"), under which the Company may, from time to time, offer and sell shares of its common stock to or through sales agents up to an aggregate of $750.0 million. For the year ended December 31, 2018, the Company sold 930,934 shares for approximately $388.2 million, net of payment of commissions to the sales agents and estimated equity offering costs under the 2017 ATM Program. As of December 31, 2018, no shares remained available for sale under the 2017 ATM Program. In December 2018, the Company established another ATM program to offer and sell up to an aggregate of $750.0 million of its common stock to or through sales agents in "at the market" transactions (the "2018 ATM Program"). For the year ended December 31, 2020 and 2019, the Company sold 415,512 shares and 903,555 shares, respectively, for approximately $298.3 million and $447.5 million, respectively, net of payment of commissions to sales agents and other offering expenses, under the 2018 ATM Program. As of December 31, 2020, no shares remained available for sale under the 2018 ATM Program. In October 2020, the Company established another ATM program, under which it may, from time to time, offer and sell up to an aggregate of $1.5 billion of its common stock to or through sales agents in "at the market" transactions (the "2020 ATM Program"). For the year ended December 31, 2020, the Company did not sell any shares under the 2020 ATM Program.

As of December 31, 2020, the Company had reserved the following authorized but unissued shares of common stock for future issuances:


Common stock options and restricted stock units			5,960,946
Common stock employee purchase plans			2,806,672
Total			8,767,618

F-51

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accumulated Other Comprehensive Loss

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


	December 31, 2017		Net Change		Cumulative Effect Adjustment		December 31, 2018		Net Change		December 31, 2019		Net Change		December 31, 2020
Foreign currency translation adjustment ("CTA") gain (loss)	$	(576,860)	$	(421,743)	$	—	$	(998,603)	$	(58,315)	$	(1,056,918)	$	548,503	$	(508,415)
Unrealized gain (loss) on cash flow hedges (1)	(24,191)		43,671		—		19,480		(3,842)		15,638		(82,790)		(67,152)
Net investment hedge CTA gain (loss) (1)	(185,303)		219,628		—		34,325		73,294		107,619		(444,553)		(336,934)
Unrealized gain (loss) on available for sale securities (2)	2,124		—		(2,124)		—		—		—		—		—
Net actuarial gain (loss) on defined benefit plans (3)	(959)		55		—		(904)		(48)		(952)		85		(867)
	$	(785,189)	$	(158,389)	$	(2,124)	$	(945,702)	$	11,089	$	(934,613)	$	21,245	$	(913,368)

(1)Refer to Note 8 for a discussion of the amounts reclassified from accumulated other comprehensive loss to net income.

(2)Upon adoption of ASU 2016-01 during the three months ended March 31, 2018, the Company recorded a net cumulative effect adjustment of $2.1 million from accumulated other comprehensive loss to retained earnings.

(3)The Company has a defined benefit pension plan covering all employees in two countries where such plans are 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 consolidated balance sheets (as evidenced above in the Company's foreign currency translation loss), as well as its consolidated results of operations, as amounts in foreign currencies are generally translated into more U.S. dollars when the U.S. dollar weakens or less U.S. dollars when the U.S. dollar strengthens. As of December 31, 2020, the U.S. dollar was generally weaker relative to certain of the currencies of the foreign countries in which the Company operates as compared to December 31, 2019. Because of this, the U.S. dollar had an overall favorable impact on the Company's consolidated financial position because the foreign denominations translated into more U.S. dollars as evidenced by a decrease in foreign currency translation loss for the year ended December 31, 2020 as reflected in the above table. The volatility of the U.S. dollar as compared to the other currencies in which the Company operates could have a significant impact on its consolidated financial position and results of operations including the amount of revenue that the Company reports in future periods.

F-52

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Dividends

During the years ended December 31, 2020, 2019 and 2018, the Company's Board of Directors declared quarterly dividends whose treatment for federal income tax purposes were as follows:


Declaration Date	Record Date	Payment Date	Total Distribution (1)		Nonqualified Ordinary Dividend (2)		Total Distribution Amount
			(per share)				(in thousands)
Fiscal 2020
2/12/2020	2/26/2020	3/18/2020	$	2.660000	$	2.660000	$	227,386
5/6/2020	5/20/2020	6/17/2020	2.660000		2.660000		235,449
7/29/2020	8/19/2020	9/23/2020	2.660000		2.660000		236,424
10/28/2020	11/18/2020	12/9/2020	2.660000		2.660000		237,010
Total			$	10.640000	$	10.640000	$	936,269

Fiscal 2019
2/13/2019	2/27/2019	3/20/2019	$	2.460000	$	2.460000	$	198,933
5/1/2019	5/22/2019	6/19/2019	2.460000		2.460000		207,949
7/31/2019	8/21/2019	9/18/2019	2.460000		2.460000		209,226
10/30/2019	11/20/2019	12/11/2019	2.460000		2.460000		209,785
Total			$	9.840000	$	9.840000	$	825,893

Fiscal 2018
2/14/2018	2/26/2018	3/21/2018	$	2.280000	$	2.280000	$	180,640
5/2/2018	5/23/2018	6/20/2018	2.280000		2.280000		181,207
8/8/2018	8/22/2018	9/19/2018	2.280000		2.280000		182,304
11/1/2018	11/14/2018	12/12/2018	2.280000		2.280000		183,297
Total			$	9.120000	$	9.120000	$	727,448

(1)Common stock dividends are characterized for federal income tax purposes as nonqualified ordinary dividend, qualified ordinary dividend, capital gains or return of capital. During the years ended December 31, 2020, 2019 and 2018, the Company did not classify any portion of the distributions as qualified ordinary dividend, capital gains or return of capital.

(2)All nonqualified ordinary dividends are eligible for the 20% deduction generally allowable to non-corporate shareholders under Internal Revenue Code Section 199A.

In addition, as of December 31, 2020, for dividends and special distributions attributed to the RSUs, the Company recorded a short term dividend payable of $10.9 million and a long term dividend payable of $7.9 million for the RSUs that have not yet vested. As of December 31, 2019, for dividends and special distributions attributed to the RSUs, the Company recorded a short term dividend payable of $9.0 million and a long term dividend payable of $7.1 million for the RSUs that have not yet vested.

13. Stock-Based Compensation

Equity Compensation Plans

As of December 31, 2020, The Company’s equity compensation plans include:

2000 Equity Incentive Plan: Under the 2000 Equity Incentive Plan, nonstatutory stock options, RSAs, RSUs and stock appreciation rights may be granted to employees, outside directors and consultants at not less than 85% of the fair value on the date of grant, and incentive stock options may be granted to employees at not less than 100% of the fair value on the date of grant. Equity awards granted under the 2000 Equity Incentive Plan generally vest over 4 years. On June 18, 2020, the 2000 Equity Incentive Plan was terminated and replaced by the 2020 Equity Incentive Plan (the "2020 Equity Incentive Plan").

F-53

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

2000 Director Option Plan*:* Under the 2000 Director Option Plan, each non-employee board member who was not previously an employee of the Company would receive an automatic initial nonstatutory stock option grant as well as an annual non-statutory stock option grant on the date of the Company's regular Annual Meeting of Stockholders. On December 18, 2008, the Company's Board of Directors passed resolutions eliminating all automatic stock option grant mechanisms under the 2000 Director Option Plan and replaced them with an automatic RSU grant mechanism under the 2000 Equity Incentive Plan. On June 18, 2020, the 2000 Director Option Plan was terminated and all shares remaining available under this Plan were retired.
2001 Supplemental Stock Plan*:* Under the 2001 Supplemental Stock Plan, non-statutory stock options and RSAs/RSUs may be granted to consultants and employees who are not executive officers or board members, at not less than 85% of the fair value on the date of grant. Current stock options granted under the 2001 Supplemental Stock Plan generally vest over four years. On June 18, 2020, the 2001 Supplemental Stock Plan was terminated and all shares remaining available under this Plan were retired.
2004 Employee Stock Purchase Plan (2004 Purchase Plan)**: The 2004 Purchase Plan permits eligible employees to purchase common stock on favorable terms via payroll deductions of up to 15% of the employee's cash compensation, subject to certain share and statutory dollar limits. Two overlapping offering periods commence during each calendar year, on each February 15 and August 15 or such other periods or dates as determined by the Compensation Committee from time to time, and the offering periods last up to 24 months with a purchase date every 6 months. The price of each share purchased is 85% of the lower of a) the fair value per share of common stock on the last trading day before the commencement of the applicable offering period or b) the fair value per share of common stock on the purchase date.
2020 Equity Incentive Plan (the "2020 Equity Plan"): On April 23, 2020, the Company Board of Directors approved the 2020 Equity Plan, which provides for the grant of stock options, including incentive stock options and non-qualified stock options, stock appreciation rights, RSAs, RSUs, other stock-based incentive awards, dividend equivalents, and cash-based incentive awards. The 2020 Equity Plan's awards may be granted to employees, non-employee members of the Board and consultants. Equity awards granted under the 2020 Equity Incentive Plan generally vest over four years. The maximum numbers of shares of Equinix common stock available for issuance under the 2020 Equity Plan is equal to the sum of 4.0 million shares and the shares transferred from the 2000 Equity Incentive Plan.

The Equity compensation plans are administered by the Compensation Committee of the Board of Directors (the "Compensation Committee"), and the Compensation Committee may terminate or amend these plans, with approval of the stockholders as may be required by applicable law, at any time. As of December 31, 2020, shares reserved and available for issuance under the equity compensation plans are as follows:


	Shares reserved	Shares available for grant


2004 Purchase Plan	5,392,206	2,806,672
2020 Equity Incentive Plan	4,687,435	4,623,380

F-54

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Restricted Stock Units

Since 2008, the Company primarily grants RSUs to its employees, including executives and non-employee directors, in lieu of stock options. The Company generally grants RSUs that have a service condition only or have both a service and performance condition. Each RSU is not considered issued and outstanding and does not have voting rights until it is converted into one share of the Company's common stock upon vesting. RSUs activity is summarized as follows:


	Number of Shares Outstanding	Weighted Average Grant Date Fair Value per Share		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (1) (Dollars in Thousands)
RSUs outstanding, December 31, 2017	1,303,891	$	252.30
RSUs granted	704,249	387.31

RSUs released, vested	(593,528)	299.07
Special distribution shares released	(13,880)	283.14
RSUs canceled	(173,460)	336.75
Special distribution shares canceled	(485)	295.77
RSUs outstanding, December 31, 2018	1,226,787	361.22
RSUs granted	779,478	448.16

RSUs released, vested	(549,259)	362.66
Special distribution shares released	(1,781)	295.31
RSUs canceled	(142,477)	364.42
Special distribution shares canceled	(23)	297.04
RSUs outstanding, December 31, 2019	1,312,725	411.99
RSUs granted	695,383	596.80

RSUs released, vested	(606,250)	426.03
Special distribution shares released	(722)	264.57
RSUs canceled	(63,502)	457.91

RSUs outstanding, December 31, 2020	1,337,634	$	499.60	1.22	$	955,311

(1)The intrinsic value is calculated based on the market value of the stock as of December 31, 2020.

The total fair value of RSUs vested and released during the years ended December 31, 2020, 2019 and 2018 was $417.0 million, $269.1 million and $249.8 million, respectively.

Employee Stock Purchase Plan

The Company provides the following disclosures for the 2004 Purchase Plan as of December 31 (dollars, except shares):


	2020		2019		2018
Weighted-average purchase price per share	$	371.71	$	354.72	$	341.48
Weighted average grant-date fair value per share of shares purchased	$	114.08	$	104.84	$	90.04
Number of shares purchased	167,113		146,640		145,346

F-55

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company uses the Black-Scholes option-pricing model to determine the fair value of shares under the 2004 Purchase Plan with the following assumptions during the years ended December 31:


	2020		2019		2018
Range of dividend yield	1.94 - 2.08%		2.07 - 2.09%		1.97 - 2.00%
Range of risk-free interest rate	0.10 - 1.55%		1.55 - 2.58%		1.79 - 2.68%
Range of expected volatility	19.28 - 51.93%		19.27 - 25.55%		19.04 - 24.33%
Weighted-average expected volatility	32.94	%	22.95	%	20.74	%
Weighted average expected life (in years)	1.36		1.24		1.43

Stock-Based Compensation

The following table presents, by operating expense, the Company's stock-based compensation expense recognized in the Company's consolidated statement of operations for the years ended December 31 (in thousands):


	2020		2019		2018
Cost of revenues	$	32,893	$	25,355	$	18,247
Sales and marketing	72,895		56,719		53,448
General and administrative	205,232		154,465		109,021
Total	$	311,020	$	236,539	$	180,716

The Company's stock-based compensation recognized in the consolidated statement of operations was comprised of the following types of equity awards for the years ended December 31 (in thousands):


	2020		2019		2018

RSUs	$	289,426	$	217,541	$	165,141
RSAs(1)	8,289		—		—
Employee stock purchase plan	13,305		18,998		15,575
Total	$	311,020	$	236,539	$	180,716

(1) During the year ended December 31, 2020, the Company awarded 48,799 shares of RSAs. See Note 1 for further discussion.

During the years ended December 31, 2020, 2019 and 2018, the Company capitalized $20.3 million, $9.1 million and $9.1 million, respectively, of stock-based compensation expense as construction in progress in property, plant and equipment.

As of December 31, 2020, the total stock-based compensation cost related to unvested equity awards not yet recognized, net of estimated forfeitures, totaled $512.9 million which is expected to be recognized over a weighted-average period of 2.13 years.

14. Income Taxes

Income before income taxes is attributable to the following geographic locations for the years ended December 31, (in thousands):


	2020		2019		2018
Domestic	$	18,395	$	328,806	$	298,009
Foreign	497,830		363,791		135,029
Income before income taxes	$	516,225	$	692,597	$	433,038

F-56

EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The tax benefit (expenses) for income taxes consisted of the following components for the years ended December 31, (in thousands):


	2020		2019		2018
Current:
Federal	$	4,552	$	(17,906)	$	7,085
State and local	1,597		(4,624)		(2,663)
Foreign	(171,092)		(135,356)		(118,175)
Subtotal	(164,943)		(157,886)		(113,753)
Deferred:
Federal	16,553		(7,459)		(27,874)
State and local	704		(1,775)		(1,165)
Foreign	1,535		(18,232)		75,113
Subtotal	18,792		(27,466)		46,074
Income tax expense	$	(146,151)	$	(185,352)	$	(67,679)

State and foreign taxes not based on income are included in general and administrative expenses and the aggregate amounts were not significant for the years ended December 31, 2020, 2019 and 2018.

The fiscal 2020, 2019, and 2018 income tax benefit (expenses) differed from the amounts computed by applying the U.S. federal income tax rate of 21% to pre-tax income as a result of the following for the years ended December 31 (in thousands):


	2020		2019		2018
Federal tax at statutory rate	$	(109,906)	$	(145,445)	$	(90,938)
State and local tax (expense) benefit	2,071		(5,852)		(3,616)
Deferred tax assets generated in current year not benefited	(12,852)		(5,398)		(3,777)
Foreign income tax rate differential	(16,364)		(11,610)		(4,072)
Non-deductible expenses	(4,427)		(1,021)		(756)
Stock-based compensation expense	(954)		(2,105)		(2,308)
Change in valuation allowance	390		(2,870)		38,684
Foreign financing activities	(11,743)		(18,738)		(17,548)
Loss on divestments	—		(3,277)		—
Uncertain tax positions reserve	(38,014)		(35,724)		(20,440)
Tax adjustments related to REIT	50,107		63,614		32,189
Change in deferred tax adjustments	(136)		(10,574)		—
Other, net	(4,323)		(6,352)		4,903
Total income tax expense	$	(146,151)	$	(185,352)	$	(67,679)

The Tax Cuts and Jobs Act of 2017 included a Global Intangible Low-Taxed Income ("GILTI") provision that increases U.S. federal taxable income by certain foreign subsidiary income in the year it is earned. The Company's accounting policy is to treat any tax on GILTI inclusions as a current period cost included in the tax expense in the year incurred. The Company believes the GILTI inclusion provision will result in no financial statement impact provided the Company satisfies its REIT distribution requirement with respect to the GILTI inclusions.

As a result of the Company's conversion to a REIT effective January 1, 2015, it is no longer the Company's intent to indefinitely reinvest undistributed foreign earnings. However, no deferred tax liability has been recognized to account for this change because the expected recovery of the basis difference will not result in U.S. taxes in the post-REIT conversion periods due to the fact that none of its foreign subsidiaries is owned by a U.S. taxable REIT subsidiary and the foreign withholding tax effect would be immaterial. The Company continues to assess the foreign withholding tax impact of its current policy and does not believe the distribution of its foreign earnings would trigger

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

any significant foreign withholding taxes, as a majority of the foreign jurisdictions where the Company operates do not impose withholding taxes on dividend distributions to a corporate U.S. parent.

The types of temporary differences that give rise to significant portions of the Company's deferred tax assets and liabilities are set out below as of December 31 (in thousands):


	2020		2019 (1)
Deferred tax assets:
Stock-based compensation expense	$	5,583	$	2,675
Unrealized losses	17,268		6,492
Lease liabilities	214,560		189,951
Loss carryforwards and tax credits	117,150		59,735
Others, net	14,976		8,500
Gross deferred tax assets	369,537		267,353
Valuation allowance	(82,344)		(57,812)
Total deferred tax assets, net	287,193		209,541
Deferred tax liabilities:
Property, plant and equipment (2)	(346,916)		(271,262)
Deferred income	(31,538)		(5,248)
Intangible assets	(132,681)		(144,404)
Total deferred tax liabilities	(511,135)		(420,914)
Net deferred tax liabilities	$	(223,942)	$	(211,373)

(1) The prior year amounts presented in the table above have been reclassified to conform with the current year presentation.

(2) Property, plant and equipment included the net deferred tax liabilities related to operating and finance lease ROU assets.

The tax basis of REIT assets, excluding investments in TRSs, is greater than the amounts reported for such assets in the accompanying consolidated balance sheet by approximately $2.0 billion as of December 31, 2020.

The Company's accounting for deferred taxes involves weighing positive and negative evidence concerning the realizability of the Company's deferred tax assets in each taxing jurisdiction. After considering such evidence as the nature, frequency and severity of current and cumulative financial reporting losses, the sources of future taxable income and tax planning strategies, the Company concluded that valuation allowances were required in certain foreign jurisdictions. The operations in the jurisdictions for which a valuation allowance has been established have a history of significant losses as of December 31, 2020. As such, the Company does not believe these operations have established a sustained history of profitability and that a valuation allowance is, therefore, necessary. The Company also provided a valuation allowance against certain gross deferred tax assets in certain taxing jurisdictions as these deferred tax assets are not expected to be realizable in the foreseeable future.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Changes in the valuation allowance for deferred tax assets for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands):


	2020		2019		2018
Beginning balance	$	57,812	$	57,003	$	84,573
Amounts from acquisitions	5,777		(2,707)		33,070
Divested balances	—		(351)		—
Amounts recognized into income	(390)		2,870		(38,684)
Current increase (decrease)	15,044		697		(13,086)
Impact of foreign currency exchange	4,101		300		(8,870)
Ending balance	$	82,344	$	57,812	$	57,003

The Company's NOL carryforwards for federal, state and foreign tax purposes which expire, if not utilized, at various intervals from 2021, are outlined below (in thousands):


Expiration Date	Federal (1)		State		Foreign (2) (3)		Total
2021	$	110,035	$	—	$	1,580	$	111,615
2022 to 2024	46,827		—		17,829		64,656
2025 to 2027	13,005		—		34,561		47,566
2028 to 2030	—		—		32,393		32,393
2031 to 2033	—		767		—		767
2034 to 2036	4,246		2,088		3,807		10,141
Thereafter	152,495		38,929		399,501		590,925
	$	326,608	$	41,784	$	489,671	$	858,063

(1)The total amount of NOL carryforwards that will not be available to offset the Company's future taxable income after dividend paid deduction due to Section 382 limitations was $165.1 million for federal.

(2)In certain jurisdictions, the net operating loss carryforwards can only be used to offset a percentage of taxable income in a given year.

(3)If certain substantial changes in the entity's ownership occur or have determined to have occurred, there may be a limitation on the amount of the carryforwards that can be utilized.

As of December 31, 2020, the Company had tax credit carryforwards of $8.3 million, which expire, if not utilized, from 2021 to 2031. The Company also had capital losses of $8.0 million, which can be carried forward indefinitely.

The beginning and ending balances of the Company's unrecognized tax benefits are reconciled below for the years ended December 31 (in thousands):


	2020		2019		2018
Beginning balance	$	173,726	$	150,930	$	82,390
Gross increases related to prior year tax positions	14,732		—		33,436
Gross decreases related to prior year tax positions	—		(1,160)		—
Gross increases related to current year tax positions	29,149		31,332		48,685
Decreases resulting from expiration of statute of limitation	(6,518)		(2,112)		(1,276)
Decreases resulting from settlements	(3,330)		(5,264)		(12,305)
Ending balance	$	207,759	$	173,726	$	150,930

The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense in the consolidated statements of operations. The Company accrued $21.3 million, $14.2 million, and $8.4 million for interest and penalties as of December 31, 2020, 2019 and 2018, respectively.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The unrecognized tax benefits of $207.8 million as of December 31, 2020, of which $33.8 million is subject to an indemnification agreement, if subsequently recognized, will affect the Company's effective tax rate favorably at the time when such a benefit is recognized.

Due to various tax years open for examination and the ongoing tax audits and inquiries by the tax authorities in different jurisdictions, it is reasonably possible that the balance of unrecognized tax benefits could significantly increase or decrease over the next 12 months as the Company may be subject to either examination by tax authorities, tax audit settlements, or a lapse in statute of limitations. The Company is currently unable to estimate the range of possible adjustments to the balance of unrecognized tax benefits.

The Company's income tax returns for the years from 2017 through current year remain open to examination by federal and state taxing authorities. In addition, the Company's tax years of 2007 through current year remain open and subject to examination by local tax authorities in certain foreign jurisdictions in which the Company has major operations.

15. Commitments and Contingencies

Purchase Commitments

As a result of the Company's various IBX data center expansion projects, as of December 31, 2020, the Company was contractually committed for approximately $1.1 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 customers for installation. The Company also had numerous other, non-capital purchase commitments in place as of December 31, 2020, such as commitments to purchase power in select locations through 2021 and thereafter, and other open purchase orders for goods, or services to be delivered or provided during 2021 and thereafter. Such other miscellaneous purchase commitments totaled $1.3 billion as of December 31, 2020. In addition, the Company entered into lease agreements for various locations that have not yet commenced as of December 31, 2020. For further information on lease commitments, see Note 10 above.

Equity Contribution Commitments

In connection with the EMEA Joint Venture closed in October 2019, the Company committed to make future equity contributions to the EMEA Joint Venture. As of December 31, 2020, the Company had future equity contribution commitments of €13.8 million and £6.6 million, or $25.8 million in total at the exchange rate in effect on December 31, 2020.

The Company also committed to make future equity contributions to the Asia-Pacific Joint Venture, which was closed on December 17, 2020. As of December 31, 2020, the Company had future equity contribution commitments of ¥6.3 billion, or $60.7 million in total at the exchange rate in effect on December 31, 2020.

Contingent Liabilities

The Company estimates 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 records what it 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 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 IBX data center leases or a municipality changing the assessment value in a jurisdiction and, as a result, the Company's property tax obligations may vary from period to period. Based upon the most current facts and circumstances, the Company makes the necessary property tax accruals for each of its reporting periods. However, revisions in the Company's estimates of the potential or actual liability could materially impact the financial position, results of operations or cash flows of the Company.

The Company's 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

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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 and appealing the tentative assessments in a number of jurisdictions where we operate, such as Brazil and France. The final results of these audits and the outcomes of the appeals are uncertain and may not be resolved in our favor. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations and appeals that would affect the adequacy of its 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 expectations, the revision of the estimates of the potential or actual liabilities could materially impact the financial position, results of operations, or cash flows of the Company.

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. In the opinion of management, there are no pending claims for which the outcome is expected to result in a material adverse effect in the financial position, results of operations or cash flows of the Company.

Employment Agreements

The Company has entered into a severance agreement with certain of its executive officers that provides for a severance payment equal to 100% of the executive officer's annual base salary and maximum bonus in the event his or her employment is terminated for any reason other than cause or he or she voluntarily resigns under certain circumstances as described in the agreement, or 200% of the executive officer's annual base salary and maximum bonus in the event this occurs after a change-in-control of the Company. For certain other executive officers, these benefits are only triggered after a change-in-control of the Company, in which case the officer is entitled to 200% of the executive officer's annual base salary and maximum bonus. In addition, under these agreements, the executive officer is entitled to the payment of his or her monthly health care premiums under the Consolidated Omnibus Budget Reconciliation Act for up to 24 months.

Indemnification and Guarantor Arrangements

As permitted under Delaware law, the Company has agreements whereby the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was serving, at the Company's 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 the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits the Company's exposure and enables the Company to recover a portion of any future amounts paid. As a result of the Company's insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. The Company has no liabilities recorded for these agreements as of December 31, 2020.

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company's 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 the Company's offerings. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. The Company has no liabilities recorded for these agreements as of December 31, 2020.

The Company enters into arrangements with its business partners, whereby the business partner agrees to provide services as a subcontractor for the Company's installations. Accordingly, the Company enters into standard indemnification agreements with its customers, whereby the Company indemnifies them for other acts, such as personal property damage, of its subcontractors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has general and umbrella insurance policies that enable the Company to recover a portion of any amounts paid. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result,

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

the Company believes the estimated fair value of these agreements is minimal. The Company has no liabilities recorded for these agreements as of December 31, 2020.

The Company has service level commitment obligations to certain of its customers. As a result, service interruptions or significant equipment damage in the Company's IBX data centers, whether or not within the Company's control, could result in service level commitments to these customers. The Company's liability insurance may not be adequate to cover those expenses. In addition, any loss of services, equipment damage or inability to meet the Company's service level commitment obligations could reduce the confidence of the Company's customers and could consequently impair the Company's ability to obtain and retain customers, which would adversely affect both the Company's ability to generate revenues and the Company's operating results. The Company generally has the ability to determine such service level credits prior to the associated revenue being recognized. The Company does not have significant liabilities in connection with service level credits as of December 31, 2020.

16. Related Party Transactions

EMEA Joint Venture

As described in Note 5 above, the Company sold certain data center facilities in Europe to the EMEA Joint Venture in October 2019 and recognized a gain on asset sale of $45.1 million during the year ended December 31, 2019. In December 2020, the Company sold the PA9 data center to its EMEA Joint Venture and recognized an insignificant loss on the sale. For further information on the sale of data center transactions, see Note 5 above.

In 2019, the Company also entered into a sub-lease agreement with the EMEA Joint Venture to sub-lease a portion of Equinix's London ("LD") 10-2 data center or former LD10 data center, for 15 years. The Company accounted for the lease of the LD10-2 data center as a finance lease. As of December 31, 2020, the Company recorded a finance lease ROU asset of £94.7 million and liability of £97.3 million, or approximately $127.2 million and $130.8 million, respectively, at the exchange rate in effect on December 31, 2020. As of December 31, 2019, the ROU asset and liability was £103.2 million, or approximately $136.7 million at the exchange rate in effect on December 31, 2019. For the year ended December 31, 2020, the Company recorded £11.1 million, or approximately $14.9 million at the exchange rate in effect as of December 31, 2020, of rent expense for the LD10-2 data center. For the year ended December 31, 2019, the rent expense for the data center was insignificant.

In 2019, the Company also entered an agreement to lease to the EMEA Joint Venture a portion of land at its Frankfurt 2 data center site (or referred to as the Frankfurt 9 xScaleTM data center) and a new building that is under construction at the land. The lease will have an initial term of 30 years and 2 renewal options of 10 years each. The consideration of the lease agreement will be based on the total cost of construction as determined when the construction is completed. As of December 31, 2020, the lease has not commenced yet and the Company recorded €14.1 million, or approximately $17.3 million at the exchange rate in effect as of December 31, 2020, of other liabilities in connection with the construction of the Frankfurt 9 xScaleTM data center.

The Company provides various services to the EMEA Joint Venture through multiple agreements, including sales and marketing, development management, facilities management, and asset management services. During the year ended December 31, 2020 and December 31, 2019, the Company had $6.5 million and $7.2 million, respectively, in total of receivables from the EMEA Joint Venture. During the year ended December 31, 2020, the total revenue recorded from these services was $21.3 million. For the year ended December 31, 2019, the total revenue recorded from these services was insignificant. See Note 6 above for more information on the EMEA Joint Venture. The transactions with the EMEA Joint Venture are generally considered to have been negotiated arm's length.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Asia-Pacific Joint Venture

In December 2020, the Company also sold certain data center facilities in Asia-Pacific region to the Asia-Pacific Joint Venture and recognized an insignificant gain on assets sale during the year ended December 31, 2020. For See Note 5 above for more information on the transaction.

In connection with the Asia-Pacific Joint Venture investment, the Company also entered several agreements to provide various services to the Asia-Pacific Joint Venture, including portfolio management, sales and marketing, development, and facilities management services. During the year ended December 31, 2020, the Company had ¥1.7 billion or $16.9 million, in total at the exchange rate in effect on December 31, 2020, of receivables from the Asia-Pacific Joint Venture. During the year ended December 31, 2020, the total revenue recorded from these services and the accounts payable was insignificant. See Note 6 above for more information on the Asia-Pacific Joint Venture. The transactions with the Asia-Pacific Joint Venture are generally considered to have been negotiated arm's length.

Other Related Party Transactions

The Company has several significant stockholders and other related parties that are also customers and/or vendors. The Company's activity of other related party transactions was as follows (in thousands):


	Years ended December 31,
	2020		2019		2018
Revenues	$	95,264	$	25,905	$	19,439
Costs and services	10,849		15,844		19,708


	As of December 31,
	2020		2019
Accounts receivable	$	6,519	$	3,345
Accounts payable	—		800

17. Segment Information

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

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


	Twelve Months Ended December 31, 2020
	Americas (2)		EMEA		Asia-Pacific		Total
Colocation (1)	$	1,820,709	$	1,504,770	$	933,522	$	4,259,001
Interconnection	622,327		213,490		187,441		1,023,258
Managed infrastructure	120,159		127,722		89,464		337,345
Other (1)	19,605		18,738		83		38,426
Recurring revenues	2,582,800		1,864,720		1,210,510		5,658,030
Non-recurring revenues	124,958		131,669		83,888		340,515
Total	$	2,707,758	$	1,996,389	$	1,294,398	$	5,998,545

(1) Includes some leasing and hedging activities.

(2) Includes revenues of $2.5 billion attributed to the U.S.

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


	Twelve Months Ended December 31, 2019
	Americas (2)		EMEA		Asia-Pacific		Total
Colocation (1)	$	1,769,654	$	1,395,544	$	857,009	$	4,022,207
Interconnection	576,709		161,552		155,328		893,589
Managed infrastructure	90,262		113,631		88,735		292,628
Other (1)	19,743		10,019		—		29,762
Recurring revenues	2,456,368		1,680,746		1,101,072		5,238,186
Non-recurring revenues	131,359		125,698		66,897		323,954
Total	$	2,587,727	$	1,806,444	$	1,167,969	$	5,562,140

(1) Includes some leasing and hedging activities.

(2) Includes revenues of $2.4 billion attributed to the U.S.


	Twelve Months Ended December 31, 2018
	Americas (2)		EMEA		Asia-Pacific		Total
Colocation (1)	$	1,732,998	$	1,201,769	$	735,404	$	3,670,171
Interconnection	532,163		138,874		130,928		801,965
Managed infrastructure	75,595		118,685		85,352		279,632
Other (1)	16,570		8,164		—		24,734
Recurring revenues	2,357,326		1,467,492		951,684		4,776,502
Non-recurring revenues	127,408		95,145		72,599		295,152
Total	$	2,484,734	$	1,562,637	$	1,024,283	$	5,071,654

(1) Includes some leasing and hedging activities.

(2) Includes revenues of $2.3 billion attributed to the U.S.

No single customer accounted for 10% or greater of the Company's accounts receivable or revenues for the year ended December 31, 2020, 2019, and 2018.

The Company defines adjusted EBITDA as income from operations excluding depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, transaction costs and gain on asset sales as presented below for the years ended December 31 (in thousands):


	2020		2019		2018
Adjusted EBITDA:
Americas	$	1,186,022	$	1,237,622	$	1,183,831
EMEA	974,246		827,980		698,280
Asia-Pacific	692,630		622,125		531,129
Total adjusted EBITDA	2,852,898		2,687,727		2,413,240
Depreciation, amortization and accretion expense	(1,427,010)		(1,285,296)		(1,226,741)
Stock-based compensation expense	(311,020)		(236,539)		(180,716)
Transaction costs	(55,935)		(24,781)		(34,413)
Impairment charges	(7,306)		(15,790)		—
Gain on asset sales	1,301		44,310		6,013
Income from operations	$	1,052,928	$	1,169,631	$	977,383

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company provides the following segment disclosures related to its operations as follows for the years ended December 31 (in thousands):


	2020		2019		2018
Depreciation and amortization:
Americas	$	729,611	$	669,498	$	636,214
EMEA	389,332		353,765		355,895
Asia-Pacific	304,426		261,574		235,380
Total	$	1,423,369	$	1,284,837	$	1,227,489

Capital expenditures:
Americas	$	866,989	$	805,360	$	773,514
EMEA	888,239		733,326		884,790
Asia-Pacific	527,276		540,835		437,870
Total	$	2,282,504	$	2,079,521	$	2,096,174

The Company's long-lived assets, including property, plant and equipment, net and operating lease right-of-use assets, are located in the following geographic areas as of December 31 (in thousands):


	2020		2019
Americas (1)	$	6,429,861	$	5,400,287
EMEA	5,002,271		4,051,701
Asia-Pacific	3,070,952		2,700,609
Total Property, plant and equipment, net	$	14,503,084	$	12,152,597

(1)Includes $5.2 billion and $4.8 billion, respectively, of property, plant and equipment, net attributed to the U.S. as of December 31, 2020 and 2019.


	2020		2019
Americas (1)	$	363,515	$	387,598
EMEA	547,547		521,129
Asia-Pacific	563,995		566,640
Total Operating lease right-of-use assets	$	1,475,057	$	1,475,367

(1)Includes $334.7 million and $373.7 million of operating lease ROU assets attributed to the U.S. as of December 31, 2020 and 2019, respectively.

18. Subsequent Events

On February 10, 2021, the Company's Board of Directors declared a quarterly cash dividend of $2.87 per share, which is payable on March 17, 2021 to the Company's common stockholders of record as of the close of business on February 24, 2021.

19. Quarterly Financial Information (Unaudited)

The Company believes that period-to-period comparisons of its financial results should not be relied upon as an indication of future performance. The Company's revenues and results of operations have been subject to significant fluctuations, particularly on a quarterly basis, and the Company's revenues and results of operations could fluctuate significantly quarter-to-quarter and year-to-year. Significant quarterly fluctuations in revenues will cause fluctuations in the Company's cash flows and the cash and cash equivalents and accounts receivable accounts on the Company's consolidated balance sheet. Causes of such fluctuations may include the volume and timing of new orders and renewals, the timing of the opening of new IBX data centers, the sales cycle for the

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EQUINIX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Company's offerings, the introduction of new offerings, changes in prices and pricing models, trends in the internet infrastructure industry, general economic conditions, extraordinary events such as acquisitions or litigation and the occurrence of unexpected events.

The unaudited quarterly financial information presented below has been prepared by the Company and reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary to present fairly the financial position and results of operations for the interim periods presented.

The following tables present selected quarterly information (in thousands, except per share data):


	2020
	Quarters Ended
	March 31		June 30		September 30		December 31
Revenues	$	1,444,542	$	1,470,121	$	1,519,767	$	1,564,115
Gross profit	708,260		730,777		751,788		733,380
Net income attributable to Equinix	118,792		133,304		66,687		50,994

Earnings per share attributable to Equinix:
Basic	1.39		1.53		0.75		0.57
Diluted	1.38		1.52		0.74		0.57


	2019
	Quarters Ended
	March 31		June 30		September 30		December 31
Revenues	$	1,363,218	$	1,384,977	$	1,396,810	$	1,417,135
Gross profit	681,188		686,798		692,471		691,499
Net income attributable to Equinix	118,078		143,527		120,850		124,995

Earnings per share attributable to Equinix:
Basic	1.44		1.70		1.42		1.47
Diluted	1.44		1.69		1.41		1.46

F-66

EQUINIX INC.

SCHEDULE III - SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION

DECEMBER 31, 2020

(Dollars in Thousands)


	Initial Costs to Company (1)			Costs Capitalized Subsequent to Acquisition or Lease		Total Costs
	Encumbrances	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Accumulated Depreciation (3)	Date of Acquisition or Lease (4)
Americas:
AT1 ATLANTA (METRO)	$—	$—	$—	$—	$149,726	$—	$149,726	$(71,990)	2010
AT2 ATLANTA (METRO)	—	—	—	—	38,752	—	38,752	(25,341)	2010
AT3 ATLANTA (METRO)	—	—	—	—	4,453	—	4,453	(2,920)	2010
AT4 ATLANTA (METRO)	—	5,400	20,209	—	19,094	5,400	39,303	(11,019)	2017
AT5 ATLANTA (METRO)	—	—	5,011	—	2,085	—	7,096	(4,093)	2017
BG1 BOGOTÁ (METRO), COLOMBIA	—	—	8,779	869	6,723	869	15,502	(4,376)	2017
BO1 BOSTON (METRO)	—	—	—	—	6,128	—	6,128	(6,128)	2010
BO2 BOSTON (METRO)	—	2,500	30,383	—	34,228	2,500	64,611	(12,739)	2017
CH1 CHICAGO (METRO)	—	—	—	—	159,193	—	159,193	(101,581)	1999
CH2 CHICAGO (METRO)	—	—	—	—	115,685	—	115,685	(66,162)	2005
CH3 CHICAGO (METRO)	—	9,759	—	351	341,835	10,110	341,835	(137,686)	2006
CH4 CHICAGO (METRO)	—	—	—	—	22,322	—	22,322	(13,361)	2009
CH7 CHICAGO (METRO)	—	670	10,564	—	6,790	670	17,354	(5,145)	2017
CL1 CALGARY (METRO), CANADA	—	—	11,572	—	480	—	12,052	(434)	2020
CL2 CALGARY (METRO), CANADA	—	—	14,145	—	529	—	14,674	(765)	2020
CL3 CALGARY (METRO), CANADA	—	7,910	69,334	327	2,954	8,237	72,288	(1,321)	2020
CU1 CULPEPER (METRO)	—	1,019	37,581	—	4,871	1,019	42,452	(14,421)	2017
CU2 CULPEPER (METRO)	—	1,244	48,000	—	11,928	1,244	59,928	(15,169)	2017
CU3 CULPEPER (METRO)	—	1,088	37,387	—	2,521	1,088	39,908	(11,474)	2017
CU4 CULPEPER (METRO)	—	1,372	27,832	—	34,465	1,372	62,297	(9,689)	2017
DA1 DALLAS (METRO)	—	—	—	—	66,965	—	66,965	(40,362)	2000
DA2 DALLAS (METRO)	—	—	—	—	81,465	—	81,465	(32,195)	2010
DA3 DALLAS (METRO)	—	—	—	—	97,116	—	97,116	(41,659)	2010
DA4 DALLAS (METRO)	—	—	—	—	16,354	—	16,354	(8,639)	2010
DA6 DALLAS (METRO)	—	—	20,522	—	169,212	—	189,734	(39,429)	2012
DA7 DALLAS (METRO)	—	—	—	—	30,166	—	30,166	(13,438)	2015
DA9 DALLAS (METRO)	—	610	15,398	—	4,922	610	20,320	(6,383)	2017
DA10 DALLAS (METRO)	—	—	117	—	4,652	—	4,769	(4,509)	2017
DA11 DALLAS (METRO)	—	—	—	—	149,413	—	149,413	(3,357)	2018
INFOMART BUILDING DALLAS (METRO)	—	24,380	337,643	3,293	19,306	27,673	356,949	(31,254)	2018
DC1 WASHINGTON, DC (METRO)	—	—	—	—	5,074	—	5,074	(1,724)	1999
DC2 WASHINGTON, DC (METRO)	—	—	—	5,047	125,215	5,047	125,215	(96,720)	1999
DC3 WASHINGTON, DC (METRO)	—	—	37,451	—	48,143	—	85,594	(52,185)	2004

F-67


	Initial Costs to Company (1)			Costs Capitalized Subsequent to Acquisition or Lease		Total Costs
	Encumbrances	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Accumulated Depreciation (3)	Date of Acquisition or Lease (4)
DC4 WASHINGTON, DC (METRO)	—	1,906	7,272	—	72,988	1,906	80,260	(56,626)	2005
DC5 WASHINGTON, DC (METRO)	—	1,429	4,983	—	91,964	1,429	96,947	(66,813)	2005
DC6 WASHINGTON, DC (METRO)	—	1,429	5,082	—	91,392	1,429	96,474	(51,457)	2005
DC7 WASHINGTON, DC (METRO)	—	—	—	—	19,065	—	19,065	(13,307)	2010
DC10 WASHINGTON, DC (METRO)	—	—	44,601	—	82,413	—	127,014	(84,550)	2011
DC11 WASHINGTON, DC (METRO)	—	1,429	5,082	—	184,646	1,429	189,728	(61,598)	2005
DC12 WASHINGTON, DC (METRO)	—	—	101,783	—	79,537	—	181,320	(27,546)	2017
DC13 WASHINGTON, DC (METRO)	—	5,500	25,423	—	9,994	5,500	35,417	(12,830)	2017
DC14 WASHINGTON, DC (METRO)	—	2,560	33,511	—	14,108	2,560	47,619	(11,487)	2017
DC15 WASHINGTON, DC (METRO)	—	1,965	—	—	119,825	1,965	119,825	(5,662)	2018
DC21 WASHINGTON, DC (METRO)	—	1,507	—	—	93,873	1,507	93,873	(740)	2019
DC97 WASHINGTON, DC (METRO)	—	—	2,021	—	1,004	—	3,025	(1,521)	2017
DE1 DENVER (METRO)	—	—	—	—	9,721	—	9,721	(8,659)	2010
DE2 DENVER (METRO)	—	5,240	23,053	—	29,937	5,240	52,990	(14,648)	2017
HO1 HOUSTON (METRO)	—	1,440	23,780	—	32,344	1,440	56,124	(14,937)	2017
KA1 KAMLOOPS (METRO), CANADA	—	2,991	46,983	123	1,992	3,114	48,975	(785)	2020
LA1 LOS ANGELES (METRO)	—	—	—	—	108,749	—	108,749	(70,766)	1999
LA2 LOS ANGELES (METRO)	—	—	—	—	10,610	—	10,610	(8,958)	2000
LA3 LOS ANGELES (METRO)	—	—	34,727	3,959	21,167	3,959	55,894	(46,574)	2005
LA4 LOS ANGELES (METRO)	—	19,333	137,630	—	51,824	19,333	189,454	(94,090)	2009
LA7 LOS ANGELES (METRO)	—	7,800	33,621	—	48,002	7,800	81,623	(13,405)	2017
MI1 MIAMI (METRO)	—	18,920	127,194	—	99,480	18,920	226,674	(59,709)	2017
MI2 MIAMI (METRO)	—	—	—	—	22,581	—	22,581	(13,798)	2010
MI3 MIAMI (METRO)	—	—	—	—	33,162	—	33,162	(17,881)	2012
MI6 MIAMI (METRO)	—	4,750	23,017	—	8,943	4,750	31,960	(11,983)	2017
MO1 MONTERREY (METRO), MEXICO	—	—	2,572	—	3,278	—	5,850	(332)	2020
MT1 MONTREAL (METRO), CANADA	—	—	76,932	—	3,053	—	79,985	(1,731)	2020
MX1 MEXICO CITY (METRO), MEXICO	—	1,090	53,980	—	8,685	1,090	62,665	(3,891)	2020
MX2 MEXICO CITY (METRO), MEXICO	—	1,090	16,061	—	11,160	1,090	27,221	(896)	2020
NY1 NEW YORK (METRO)	—	—	—	—	71,191	—	71,191	(44,088)	1999
NY2 NEW YORK (METRO)	—	—	—	17,859	205,092	17,859	205,092	(131,644)	2000
NY4 NEW YORK (METRO)	—	—	—	—	355,278	—	355,278	(199,915)	2006
NY5 NEW YORK (METRO)	—	—	—	—	277,162	—	277,162	(82,406)	2010
NY6 NEW YORK (METRO)	—	—	—	—	69,925	—	69,925	(15,436)	2010
NY7 NEW YORK (METRO)	—	—	24,660	—	168,391	—	193,051	(133,370)	2010
NY8 NEW YORK (METRO)	—	—	—	—	11,461	—	11,461	(8,879)	2010
NY9 NEW YORK (METRO)	—	—	—	—	50,566	—	50,566	(35,782)	2010
NY11 NEW YORK (METRO)	—	2,050	58,717	—	13,134	2,050	71,851	(23,545)	2017

F-68


	Initial Costs to Company (1)			Costs Capitalized Subsequent to Acquisition or Lease		Total Costs
	Encumbrances	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Accumulated Depreciation (3)	Date of Acquisition or Lease (4)
NY13 NEW YORK (METRO)	—	—	31,603	—	6,488	—	38,091	(14,966)	2017
OT1 OTTAWA (METRO), CANADA	—	1,586	39,128	61	1,664	1,647	40,792	(688)	2020
PH1 PHILADELPHIA (METRO)	—	—	—	—	44,037	—	44,037	(18,883)	2010
RJ1 RIO DE JANEIRO (METRO), BRAZIL	—	—	—	—	17,456	—	17,456	(13,090)	2011
RJ2 RIO DE JANEIRO (METRO), BRAZIL	—	—	2,012	1,267	52,127	1,267	54,139	(17,571)	2012
SE2 SEATTLE (METRO)	—	—	—	—	30,454	—	30,454	(23,345)	2010
SE3 SEATTLE (METRO)	—	—	1,760	—	99,988	—	101,748	(56,100)	2011
SE4 SEATTLE (METRO)	—	4,000	12,903	—	34,330	4,000	47,233	(8,025)	2017
SJ1 SAINT JOHN (METRO), CANADA	—	162	14,276	7	591	169	14,867	(305)	2020
SP1 SÃO PAULO (METRO), BRAZIL	—	—	10,188	—	15,875	—	26,063	(21,018)	2011
SP2 SÃO PAULO (METRO), BRAZIL	—	—	—	3,083	53,322	3,083	53,322	(41,337)	2011
SP3 SÃO PAULO (METRO), BRAZIL	—	7,748	72,997	—	46,935	7,748	119,932	(26,368)	2017
SP4 SÃO PAULO (METRO), BRAZIL	—	—	22,027	—	50,707	—	72,734	(8,830)	2017
SP5 SÃO PAULO (METRO), BRAZIL	—	4,597	37	—	4,432	4,597	4,469	(3)	2020
SV1 SILICON VALLEY (METRO)	—	—	—	15,545	143,123	15,545	143,123	(96,427)	1999
SV2 SILICON VALLEY (METRO)	—	—	—	—	151,960	—	151,960	(92,409)	2003
SV3 SILICON VALLEY (METRO)	—	—	—	—	77,801	—	77,801	(38,319)	1999
SV4 SILICON VALLEY (METRO)	—	—	—	—	90,876	—	90,876	(26,253)	2005
SV5 SILICON VALLEY (METRO)	—	6,238	98,991	—	99,539	6,238	198,530	(82,024)	2010
SV6 SILICON VALLEY (METRO)	—	—	15,585	—	29,618	—	45,203	(37,953)	2010
SV8 SILICON VALLEY (METRO)	—	—	—	—	54,166	—	54,166	(35,901)	2010
SV10 SILICON VALLEY (METRO)	—	12,646	123,594	—	92,145	12,646	215,739	(31,147)	2017
SV11 SILICON VALLEY (METRO)	—	—	—	—	88,914	—	88,914	—	2019
SV12 SILICON VALLEY (METRO)	—	20,313	—	—	8,240	20,313	8,240	—	2015
SV13 SILICON VALLEY (METRO)	—	—	3,828	—	117	—	3,945	(3,016)	2017
SV14 SILICON VALLEY (METRO)	—	3,638	5,503	—	3,807	3,638	9,310	(2,503)	2017
SV15 SILICON VALLEY (METRO)	—	7,651	23,060	—	3,710	7,651	26,770	(8,071)	2017
SV16 SILICON VALLEY (METRO)	—	4,271	15,018	—	1,753	4,271	16,771	(5,408)	2017
SV17 SILICON VALLEY (METRO)	—	—	17,493	—	3,340	—	20,833	(13,269)	2017
TR1 TORONTO (METRO), CANADA	—	—	—	—	91,618	—	91,618	(34,280)	2010
TR2 TORONTO (METRO), CANADA	—	—	21,113	106,171	135,300	106,171	156,413	(25,566)	2015
TR4 TORONTO (METRO), CANADA	—	—	13,985	—	593	—	14,578	(954)	2020
TR5 MARKHAM (METRO), CANADA	—	—	24,913	—	798	—	25,711	(1,020)	2020
TR6 BRAMPTON (METRO), CANADA	—	9,386	60,806	388	2,516	9,774	63,322	(831)	2020
TR7 BRAMPTON (METRO), CANADA	—	12,098	71,966	500	3,041	12,598	75,007	(1,462)	2020
VA1 BURNABY (METRO), CANADA	—	—	4,668	—	193	—	4,861	(113)	2020
WI1 WINNIPEG (METRO), CANADA	—	—	57,234	—	1,048	—	58,282	(441)	2020
OTHERS (5)	—	80,313	49,891	1,805	39,954	82,118	89,845	(11,430)	Various

F-69


	Initial Costs to Company (1)			Costs Capitalized Subsequent to Acquisition or Lease		Total Costs
	Encumbrances	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Accumulated Depreciation (3)	Date of Acquisition or Lease (4)

EMEA:
AD1 ABU DHABI (METRO), UNITED ARAB EMIRATES	—	—	—	—	74,541	—	74,541	(4,350)	2017
AM1 AMSTERDAM (METRO), THE NETHERLANDS	—	—	—	—	102,173	—	102,173	(52,121)	2008
AM2 AMSTERDAM (METRO), THE NETHERLANDS	—	—	—	—	91,788	—	91,788	(37,165)	2008
AM3 AMSTERDAM (METRO), THE NETHERLANDS	—	—	27,099	—	143,882	—	170,981	(66,656)	2011
AM4 AMSTERDAM (METRO), THE NETHERLANDS	—	—	—	—	236,429	—	236,429	(26,431)	2016
AM5 AMSTERDAM (METRO), THE NETHERLANDS	—	—	92,199	—	23,456	—	115,655	(34,479)	2016
AM6 AMSTERDAM (METRO), THE NETHERLANDS	—	6,616	50,876	1,066	97,923	7,682	148,799	(27,059)	2016
AM7 AMSTERDAM (METRO), THE NETHERLANDS	—	—	7,397	—	125,527	—	132,924	(12,374)	2016
AM8 AMSTERDAM (METRO), THE NETHERLANDS	—	—	—	—	12,328	—	12,328	(5,609)	2016
AM11 AMSTERDAM (METRO), THE NETHERLANDS	—	—	6,405	447	12,573	447	18,978	(1,307)	2019
BA1 BARCELONA (METRO), SPAIN	—	—	9,443	—	12,344	—	21,787	(6,694)	2017
BX1 BORDEAUX (METRO), FRANCE	—	1,916	3,507	168	13,607	2,084	17,114	(169)	2020
DB1 DUBLIN (METRO), IRELAND	—	—	—	—	5,000	—	5,000	(3,928)	2016
DB2 DUBLIN (METRO), IRELAND	—	—	12,460	—	7,308	—	19,768	(9,220)	2016
DB3 DUBLIN (METRO), IRELAND	—	3,334	54,387	537	22,764	3,871	77,151	(21,084)	2016
DB4 DUBLIN (METRO), IRELAND	—	—	26,875	—	19,562	—	46,437	(9,564)	2016
DU1 DÜSSELDORF (METRO), GERMANY	—	—	—	8,841	33,851	8,841	33,851	(20,737)	2000
DX1 DUBAI (METRO), UNITED ARAB EMIRATES	—	—	—	—	93,373	—	93,373	(33,359)	2008
DX2 DUBAI (METRO), UNITED ARAB EMIRATES	—	—	—	—	645	—	645	(256)	2017
DX3 DUBAI (METRO), UNITED ARAB EMIRATES	—	6,737	—	—	61	6,737	61	(151)	2020
EN1 ENSCHEDE (METRO), THE NETHERLANDS	—	—	—	—	35,366	—	35,366	(25,788)	2008
FR1 FRANKFURT (METRO), GERMANY	—	—	—	—	4,529	—	4,529	(4,214)	2007
FR2 FRANKFURT (METRO), GERMANY	—	—	—	15,840	555,694	15,840	555,694	(161,968)	2007
FR4 FRANKFURT (METRO), GERMANY	—	11,578	9,307	1,865	97,862	13,443	107,169	(36,277)	2009
FR5 FRANKFURT (METRO), GERMANY	30,310	—	—	15,256	228,532	15,256	228,532	(53,688)	2012
FR6 FRANKFURT (METRO), GERMANY	—	—	—	—	150,011	—	150,011	(26,802)	2016
FR7 FRANKFURT (METRO), GERMANY	—	—	43,634	—	40,046	—	83,680	(26,695)	2016

F-70


	Initial Costs to Company (1)			Costs Capitalized Subsequent to Acquisition or Lease		Total Costs
	Encumbrances	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Accumulated Depreciation (3)	Date of Acquisition or Lease (4)
FR8 FRANKFURT (METRO), GERMANY	—	21,934	58,199	—	—	21,934	58,199	(224)	2020
FR9x FRANKFURT (METRO), GERMANY	—	—	—	—	41,714	—	41,714	—	2020
FR11x FRANKFURT (METRO), GERMANY	—	—	—	—	15,303	—	15,303	—	2020
GN1 GENOA (METRO), ITALY	—	1,988	—	—	1,123	1,988	1,123	—	2020
GV1 GENEVA (METRO), SWITZERLAND	—	—	—	—	25,771	—	25,771	(4,978)	2004
GV2 GENEVA (METRO), SWITZERLAND	—	—	—	—	27,883	—	27,883	(23,289)	2009
HE1 HELSINKI (METRO), FINLAND	—	—	—	—	4,212	—	4,212	(3,462)	2016
HE3 HELSINKI (METRO), FINLAND	—	—	—	—	15,829	—	15,829	(9,926)	2016
HE4 HELSINKI (METRO), FINLAND	—	—	29,092	—	9,694	—	38,786	(18,078)	2016
HE5 HELSINKI (METRO), FINLAND	—	—	7,564	—	18,302	—	25,866	(5,020)	2016
HE6 HELSINKI (METRO), FINLAND	—	—	17,204	1,711	31,603	1,711	48,807	(13,254)	2016
HE7 HELSINKI (METRO), FINLAND	—	7,348	6,946	1,765	42,184	9,113	49,130	(3,160)	2018
HH1 HAMBURG (METRO), GERMANY	—	3,612	5,360	921	46,485	4,533	51,845	(1,988)	2018
IL2 ISTANBUL (METRO), TURKEY	—	14,460	39,289	—	19,344	14,460	58,633	(7,346)	2017
LD3 LONDON (METRO), UNITED KINGDOM	—	—	—	—	18,023	—	18,023	(17,772)	2000
LD4 LONDON (METRO), UNITED KINGDOM	—	—	23,044	2	134,786	2	157,830	(52,213)	2007
LD5 LONDON (METRO), UNITED KINGDOM	—	—	16,412	—	189,038	—	205,450	(100,960)	2010
LD6 LONDON (METRO), UNITED KINGDOM	—	—	—	—	148,540	—	148,540	(36,792)	2013
LD7 LONDON (METRO), UNITED KINGDOM	—	—	—	2,295	191,545	2,295	191,545	(9,192)	2018
LD8 LONDON (METRO), UNITED KINGDOM	—	—	107,544	—	62,258	—	169,802	(49,894)	2016
LD9 LONDON (METRO), UNITED KINGDOM	—	—	181,431	—	168,666	—	350,097	(80,850)	2016
LD10 LONDON (METRO), UNITED KINGDOM	—	—	40,251	—	104,869	—	145,120	(13,014)	2017
LS1 LISBON (METRO), PORTUGAL	—	—	7,374	3,776	9,859	3,776	17,233	(3,607)	2017
MA1 MANCHESTER (METRO), UNITED KINGDOM	—	—	—	—	14,532	—	14,532	(6,536)	2016
MA2 MANCHESTER (METRO), UNITED KINGDOM	—	—	—	—	15,828	—	15,828	(7,793)	2016
MA3 MANCHESTER (METRO), UNITED KINGDOM	—	—	44,931	—	9,328	—	54,259	(26,170)	2016
MA4 MANCHESTER (METRO), UNITED KINGDOM	—	—	6,697	—	5,331	—	12,028	(8,813)	2016
MA5 MANCHESTER (METRO), UNITED KINGDOM	—	3,706	6,874	385	12,185	4,091	19,059	(142)	2020
MC1 MUSCAT (METRO), OMAN	—	—	—	—	182	—	182	(1)	2019
MD1 MADRID (METRO), SPAIN	—	—	7,917	11,939	6,902	11,939	14,819	(4,795)	2017
MD2 MADRID (METRO), SPAIN	—	—	40,952	—	52,855	—	93,807	(28,952)	2017
ML2 MILAN (METRO), ITALY	—	—	—	—	23,808	—	23,808	(12,490)	2016
ML3 MILAN (METRO), ITALY	—	—	—	3,882	46,399	3,882	46,399	(14,386)	2016
ML4 MILAN (METRO), ITALY	—	—	—	—	9,983	—	9,983	(6,829)	2016
ML5 MILAN (METRO), ITALY	—	7,741	20,952	5,621	42,501	13,362	63,453	(156)	2019

F-71


	Initial Costs to Company (1)			Costs Capitalized Subsequent to Acquisition or Lease		Total Costs
	Encumbrances	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Accumulated Depreciation (3)	Date of Acquisition or Lease (4)
MU1 MUNICH (METRO), GERMANY	—	—	—	—	35,105	—	35,105	(18,095)	2007
MU3 MUNICH (METRO), GERMANY	—	—	—	—	5,265	—	5,265	(2,549)	2010
MU4 MUNICH (METRO), GERMANY	—	13,020	35,120	—	—	13,020	35,120	(4)	2020
PA1 PARIS (METRO), FRANCE	—	—	—	—	13,254	—	13,254	(15,966)	2007
PA2 & PA3 PARIS (METRO), FRANCE	—	—	29,615	25,346	334,904	25,346	364,519	(142,901)	2007
PA4 PARIS (METRO), FRANCE	—	1,598	9,503	6,040	256,203	7,638	265,706	(80,320)	2011
PA5 PARIS (METRO), FRANCE	—	—	16,554	—	5,067	—	21,621	(6,976)	2016
PA6 PARIS (METRO), FRANCE	—	—	—	—	75,895	—	75,895	(34,544)	2016
PA7 PARIS (METRO), FRANCE	—	—	—	—	22,011	—	22,011	(10,440)	2016
PA10 PARIS (METRO), FRANCE	—	—	—	—	51,536	—	51,536	(48)	2019
SA1 SEVILLE (METRO), SPAIN	—	—	1,567	—	1,173	—	2,740	(2,181)	2017
SK1 STOCKHOLM, (METRO), SWEDEN	—	—	15,495	—	17,028	—	32,523	(10,244)	2016
SK2 STOCKHOLM, (METRO), SWEDEN	—	—	80,148	4,304	87,585	4,304	167,733	(33,517)	2016
SK3 STOCKHOLM, (METRO), SWEDEN	—	—	—	—	18,894	—	18,894	(5,535)	2016
SO1 SOFIA (METRO), BULGARIA	—	—	5,236	—	4,721	—	9,957	(2,619)	2016
SO2 SOFIA (METRO), BULGARIA	—	2,719	—	241	18,625	2,960	18,625	(1,368)	2017
WA1 WARSAW (METRO), POLAND	—	—	5,950	—	26,442	—	32,392	(7,596)	2016
WA2 WARSAW (METRO), POLAND	—	—	4,709	—	9,497	—	14,206	(4,666)	2016
WA3 WARSAW (METRO), POLAND	—	2,784	—	75	46,005	2,859	46,005	(1,399)	2017
ZH2 ZURICH (METRO), SWITZERLAND	—	—	—	—	3,613	—	3,613	(2,830)	2002
ZH4 ZURICH (METRO), SWITZERLAND	—	—	11,284	—	34,739	—	46,023	(26,926)	2009
ZH5 ZURICH (METRO), SWITZERLAND	—	—	—	8,315	198,829	8,315	198,829	(27,791)	2009
ZW1 ZWOLLE (METRO), THE NETHERLANDS	—	—	—	—	11,191	—	11,191	(8,544)	2008
OTHERS (5)	—	48,761	18,735	28,924	61,859	77,685	80,594	(5,745)	Various

Asia-Pacific:
AE1 ADELAIDE (METRO), AUSTRALIA	—	2,654	1,015	258	2,077	2,912	3,092	(766)	2018
BR1 BRISBANE (METRO), AUSTRALIA	—	3,159	1,053	307	2,880	3,466	3,933	(560)	2018
CA1 CANBERRA (METRO), AUSTRALIA	—	—	18,410	—	8,167	—	26,577	(2,524)	2018
HK1 HONG KONG (METRO), CHINA	—	—	—	—	275,411	—	275,411	(112,144)	2003
HK2 HONG KONG (METRO), CHINA	—	—	—	—	235,711	—	235,711	(147,496)	2010
HK3 HONG KONG (METRO), CHINA	—	—	—	—	144,741	—	144,741	(80,873)	2012
HK4 HONG KONG (METRO), CHINA	—	—	—	—	93,809	—	93,809	(9,739)	2012
HK5 HONG KONG (METRO), CHINA	—	—	70,002	—	40,439	—	110,441	(20,243)	2017
ME1 MELBOURNE (METRO), AUSTRALIA	—	14,926	—	1,452	96,943	16,378	96,943	(25,498)	2013
ME2 MELBOURNE (METRO), AUSTRALIA	—	—	—	—	89,372	—	89,372	(3,718)	2018
ME4 MELBOURNE (METRO), AUSTRALIA	—	3,425	84,175	334	19,555	3,759	103,730	(18,274)	2018
ME5 MELBOURNE (METRO), AUSTRALIA	—	6,655	4,094	647	4,863	7,302	8,957	(2,135)	2018

F-72


	Initial Costs to Company (1)			Costs Capitalized Subsequent to Acquisition or Lease		Total Costs
	Encumbrances	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Land	Buildings and Improvements (2)	Accumulated Depreciation (3)	Date of Acquisition or Lease (4)
OS1 OSAKA (METRO), JAPAN	—	—	14,876	—	109,268	—	124,144	(37,310)	2013
OS3 OSAKA (METRO), JAPAN	—	—	—	—	1,491	—	1,491	—	2020
PE1 PERTH (METRO), AUSTRALIA	—	1,347	1,337	132	2,070	1,479	3,407	(408)	2018
PE2 PERTH (METRO), AUSTRALIA	—	—	16,327	—	17,637	—	33,964	(5,885)	2018
PE3 PERTH (METRO), AUSTRALIA	—	—	—	—	43,076	—	43,076	—	2020
SG1 SINGAPORE (METRO)	—	—	—	—	263,516	—	263,516	(126,298)	2003
SG2 SINGAPORE (METRO)	—	—	—	—	301,305	—	301,305	(223,677)	2008
SG3 SINGAPORE (METRO)	—	—	34,844	—	227,324	—	262,168	(68,707)	2013
SG4 SINGAPORE (METRO)	—	—	54,602	—	117,537	—	172,139	(7,303)	2019
SG5 SINGAPORE (METRO)	—	—	—	—	74,579	—	74,579	(6)	2019
SH2 SHANGHAI (METRO), CHINA	—	—	—	—	6,169	—	6,169	(2,515)	2012
SH3 SHANGHAI (METRO), CHINA	—	—	7,066	—	12,132	—	19,198	(6,870)	2012
SH5 SHANGHAI (METRO), CHINA	—	—	11,284	—	22,973	—	34,257	(14,764)	2012
SH6 SHANGHAI (METRO), CHINA	—	—	16,545	—	25,177	—	41,722	(3,491)	2017
SL1 SEOUL (METRO), SOUTH KOREA	—	—	29,236	—	41,305	—	70,541	(5,901)	2019
SY1 SYDNEY (METRO), AUSTRALIA	—	—	—	—	33,242	—	33,242	(22,970)	2003
SY2 SYDNEY (METRO), AUSTRALIA	—	—	3,080	—	26,936	—	30,016	(24,626)	2008
SY3 SYDNEY (METRO), AUSTRALIA	—	—	8,712	—	158,023	—	166,735	(86,628)	2010
SY4 SYDNEY (METRO), AUSTRALIA	—	—	—	—	187,449	—	187,449	(44,397)	2014
SY5 SYDNEY (METRO), AUSTRALIA	—	82,091	—	7,987	209,356	90,078	209,356	(7,028)	2018
SY6 SYDNEY (METRO), AUSTRALIA	—	8,860	64,197	861	17,594	9,721	81,791	(10,201)	2018
SY7 SYDNEY (METRO), AUSTRALIA	—	2,745	47,350	267	8,854	3,012	56,204	(6,959)	2018
SY8 SYDNEY (METRO), AUSTRALIA	—	—	1,073	—	593	—	1,666	(892)	2018
TY1 TOKYO (METRO), JAPAN	—	—	—	—	39,230	—	39,230	(23,170)	2000
TY2 TOKYO (METRO), JAPAN	—	—	—	—	96,496	—	96,496	(71,144)	2006
TY3 TOKYO (METRO), JAPAN	—	—	—	—	85,876	—	85,876	(47,128)	2010
TY4 TOKYO (METRO), JAPAN	—	—	—	—	82,725	—	82,725	(34,195)	2012
TY5 TOKYO (METRO), JAPAN	—	—	102	—	65,372	—	65,474	(18,311)	2014
TY6 TOKYO (METRO), JAPAN	—	—	37,941	—	15,474	—	53,415	(33,005)	2015
TY7 TOKYO (METRO), JAPAN	—	—	13,175	—	7,323	—	20,498	(14,101)	2015
TY8 TOKYO (METRO), JAPAN	—	—	53,848	—	17,245	—	71,093	(28,569)	2015
TY9 TOKYO (METRO), JAPAN	—	—	106,710	—	30,151	—	136,861	(80,293)	2015
TY10 TOKYO (METRO), JAPAN	—	—	69,881	—	22,675	—	92,556	(26,774)	2015
TY11 TOKYO (METRO), JAPAN	—	—	22,099	—	198,696	—	220,795	(10,068)	2018
OTHERS (5)	—	—	875	36,057	22,529	36,057	23,404	(9,643)	Various
TOTAL LOCATIONS	$30,310	$598,742	$4,498,639	$358,519	$14,705,885	$957,261	$19,204,524	$(6,399,477)

(1) The initial cost was $0 if the lease of the respective IBX was classified as an operating lease.

F-73

(2) Building and improvements include all fixed assets except for land.

(3) Buildings and improvements are depreciated on a straight line basis over estimated useful live as described under described in Note 1 within the Consolidated Financial Statements.

(4) Date of lease or acquisition represents the date the Company leased the facility or acquired the facility through purchase or acquisition.

(5) Includes various IBXs that are under initial development and costs incurred at certain central locations supporting various IBX functions.

The aggregate gross cost of the Company's properties for federal income tax purpose approximated $27.2 billion (unaudited) as of December 31, 2020.

The following table reconciles the historical cost of the Company's properties for financial reporting purposes for each of the years in the three-year period ended December 31, 2020 (in thousands).

Gross Fixed Assets:


	2020		2019		2018
Balance, beginning of period	$	16,927,332	$	15,020,198	$	12,947,735
ASC 842 adoption impact (1)	—		(276,671)		—
Additions (including acquisitions and improvements)	3,110,907		2,632,472		2,756,218
Disposals	(446,864)		(463,485)		(289,157)
Foreign currency transaction adjustments and others	570,410		14,818		(394,598)
Balance, end of year	$	20,161,785	$	16,927,332	$	15,020,198

Accumulated Depreciation:


	2020		2019		2018
Balance, beginning of period	$	(5,329,182)	$	(4,517,016)	$	(3,980,198)
ASC 842 adoption impact (1)	—		(7,846)		—
Additions (depreciation expense)	(1,036,452)		(926,046)		(882,848)
Disposals	109,230		128,352		261,928
Foreign currency transaction adjustments and others	(143,073)		(6,626)		84,102
Balance, end of year	$	(6,399,477)	$	(5,329,182)	$	(4,517,016)

(1) Upon the adoption of Topic 842 on January 1, 2019, the Company de-recognized certain fixed assets under built-to-suite leases due to the conversion of certain build-to-suit leases to operating leases. See Note 1 within the Consolidated Financial Statements.

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