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SEC Filings

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

are used as exchange rates for the nine months ended September 30, 2018 when comparing the nine months ended September 30, 2018 with the nine months ended September 30, 2017).
Liquidity and Capital Resources
As of September 30, 2018, our total indebtedness was comprised of debt and financing obligations totaling $11.4 billion consisting of (a) $8,542.2 million of principal from our senior notes, (b) approximately $1,484.5 million from our capital lease and other financing obligations, and (c) $1,407.7 million of principal from our mortgage and loans payable (gross of debt issuance cost, debt discount, plus debt premium).
We believe we have sufficient cash, coupled with anticipated cash generated from operating activities, to meet our operating requirements, including repayment of the current portion of our debt as it becomes due, payment of expenses related to our REIT integration activities, payment of regular dividends and completion of our publicly-announced expansion projects.
In March 31, 2018, we issued €750.0 million 2.875% Euro Senior Notes due 2024. On April 2, 2018, we completed the Infomart Dallas Acquisition for a purchase price of approximately $804.0 million, which was funded with approximately $45.8 million in cash and $758.2 million aggregate fair value of 5.000% senior unsecured notes. On April 18, 2018, we completed the Metronode Acquisition for a cash purchase price of A$1.033 billion or approximately $804.1 million at the exchange rate in effect on April 18, 2018. In July, we drew down the full amount of the JPY Term Loan of ¥47.5 billion, or approximately $424.7 million at the exchange rate effective on July 31, 2018, and prepaid the remaining principal of our existing Japanese Yen Term Loan of ¥43.8 billion or approximately $391.3 million. As of September 30, 2018, we had $885.9 million of cash, cash equivalents and short-term investments, of which approximately $457.2 million was held in the U.S. We believe that our current expansion activities in the U.S. can be funded with our U.S.-based cash and cash equivalents and investments. In addition to our cash and investment portfolio, we have additional liquidity available to us from our $2.0 billion revolving facility and the ATM program as described below. 
As of September 30, 2018, we had 42 irrevocable letters of credit totaling $69.1 million issued and outstanding under the revolving facility. As a result, we had a total of approximately $1.9 billion of additional liquidity available to us under the revolving facility.
In August 2017, we entered into an equity distribution agreement to sell up to $750.0 million of common stock in at the market ("ATM") offerings. During the nine months ended September 30, 2018, we sold 631,522 shares under the ATM Program, for approximately $273.9 million, net of payment of commissions to the sales agents. As of September 30, 2018, we had generated net proceeds of $629.0 million under the ATM program.
Besides any further financing activity we may pursue, customer collections are our primary source of cash. While we believe we have a strong customer base, and have continued to experience relatively strong collections, if the current market conditions were to deteriorate, some of our customers may have difficulty paying us and we may experience increased churn in our customer base, including reductions in their commitments to us, all of which could have a material adverse effect on our liquidity. Additionally, we may pursue additional expansion opportunities, primarily the build out of new IBX data centers, in certain of our existing markets which are at or near capacity within the next year, as well as potential acquisitions. While we expect to fund these plans with our existing resources, additional financing, either debt or equity, may be required, and if current market conditions were to deteriorate, we may be unable to secure additional financing or any such additional financing may only be available to us on unfavorable terms. An inability to pursue additional expansion opportunities will have a material adverse effect on our ability to maintain our desired level of revenue growth in future periods.
Sources and Uses of Cash
 
Nine Months Ended September 30,
 
2018
 
2017
 
(dollars in thousands)
 
Net cash provided by operating activities
$
1,256,797

 
$
944,354

Net cash used in investing activities
(2,349,957
)
 
(4,616,830
)
Net cash provided by financing activities
571,807

 
4,508,974

Operating Activities. Cash provided by our operations is generated by colocation, interconnection, managed infrastructure and other revenues. Our primary use of cash from our operating activities includes compensation and related costs, interest payments, other general corporate expenditures and taxes. Net cash provided by operating activities increased from the nine months ended September 30, 2017 to the nine months ended September 30, 2018 primarily due to improved operating results offset by

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