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SEC Filings

10-Q
EQUINIX INC filed this Form 10-Q on 11/02/2018
Entire Document
 

Acquisition Costs. During the three months ended September 30, 2018, we recorded a net reduction to acquisition costs totaling $1.1 million, primarily in the EMEA region. During the three months ended September 30, 2017, we recorded acquisition costs totaling $2.1 million, primarily in the Americas region, due to the Verizon Data Center Acquisition.
Gain on Asset Sales. During the three months ended September 30, 2018, we recorded a gain on asset sales of $6.0 million primarily relating to the sale of the Frankfurt 3 ("FR3") data center in the EMEA region. We did not have any gain on asset sales during the three months ended September 30, 2017.
Income from Operations. Our income from operations for the three months ended September 30, 2018 and 2017 was split among the following geographic regions (dollars in thousands):
 
Three Months Ended September 30,
 
% Change
 
2018
 
%
 
2017
 
%
 
Actual
 
Constant
Currency
Americas
$
106,536

 
40
%
 
$
105,785

 
47
%
 
1
%
 
2
%
EMEA
88,830

 
33
%
 
64,197

 
29
%
 
38
%
 
40
%
Asia-Pacific
70,387

 
27
%
 
54,881

 
24
%
 
28
%
 
31
%
Total
$
265,753

 
100
%
 
$
224,863

 
100
%
 
18
%
 
20
%
Americas Income from Operations. Our Americas income from operations did not materially change during the three months ended September 30, 2018 compared to the three months ended September 30, 2017. The impact of foreign currency fluctuations on our Americas income from operations for the three months ended September 30, 2018 was not significant when compared to average exchange rates of the three months ended September 30, 2017.
EMEA Income from Operations. The increase in our EMEA income from operations was primarily due to higher revenues as a result of our IBX data center expansion activity and acquisitions, lower sales and marketing and general and administrative expenses as a percentage of revenues, as well as a gain on asset sales in the current year. The impact of foreign currency fluctuations on our EMEA income from operations for the three months ended September 30, 2018 was not significant when compared to average exchange rates of the three months ended September 30, 2017.
Asia-Pacific Income from Operations. The increase in our Asia-Pacific income from operations was primarily due to higher revenues as a result of our IBX data center expansion activity and acquisitions, as described above, as well as lower general and administrative expenses as a percentage of revenues. The impact of foreign currency fluctuations on our Asia-Pacific income from operations for the three months ended September 30, 2018 was not significant when compared to average exchange rates of the three months ended September 30, 2017.
Interest Income. Interest income was $2.9 million and $2.3 million, respectively, for the three months ended September 30, 2018 and 2017. The average annualized yield for the three months ended September 30, 2018 was 1.24% versus 0.68% for the three months ended September 30, 2017.
Interest Expense. Interest expense increased to $130.6 million for the three months ended September 30, 2018 from $121.8 million for the three months ended September 30, 2017, primarily attributable to our issuance of €750.0 million 2.875% Euro Senior Notes due 2024 in March 2018 and $750 million 5.000% Infomart Senior Notes in April 2018. The increase was partially offset by lower weighted average interest rates during the three months ended September 30, 2018, as compared to the three months ended September 30, 2017. We capitalized $6.2 million of interest expense to construction in progress for both the three months ended September 30, 2018 and 2017. We expect to incur higher interest expense in future periods in connection with additional indebtedness that we incurred during 2018 and as a result of the increasing interest rates.
Other Income (Expense). We recorded net other income of $3.7 million for the three months ended September 30, 2018 and net other expense of $1.1 million for the three months ended September 30, 2017, which was primarily due to foreign currency exchange gains and losses during those periods.
Gain (Loss) on debt extinguishment. We recorded a $1.5 million net gain on debt extinguishment during the three months ended September 30, 2018, primarily due to the net impact of refinancing of our Japanese Yen Term Loan and a lease termination. During the three months ended September 30, 2017, we recorded a $22.2 million loss on debt extinguishment as a result of the repayment of all of our 4.875% senior notes and an amendment of financing obligations for a data center in Santa Clara and other various lease modifications and terminations.
Income Taxes. We operate as a REIT for federal income tax purposes. As a REIT, we are generally not subject to federal income taxes on our taxable income distributed to stockholders. We intend to distribute or have distributed the entire taxable

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