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SEC Filings

10-Q
EQUINIX INC filed this Form 10-Q on 05/03/2019
Entire Document
 

Americas Income from Operations. The decrease in our Americas income from operations was primarily due to the $14.4 million impairment charge on the NY12 data center. The impact of foreign currency fluctuations on our Americas income from operations for the three months ended March 31, 2019 was not significant when compared to average exchange rates of the three months ended March 31, 2018.
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 as well as lower cost of revenues, sales and marketing and general and administrative expenses as a percentage of revenues. During the three months ended March 31, 2019, foreign currency fluctuations resulted in approximately $9.0 million of net unfavorable foreign currency impact to our EMEA income from operations primarily due to a generally stronger U.S. Dollar relative to the Euro and British Pound during the three months ended March 31, 2019 compared to the three months ended March 31, 2018.
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 the Metronode Acquisition, as described above, as well as lower cost of revenues, sales and marketing and general and administrative expenses as a percentage of revenues. During the three months ended March 31, 2019, foreign currency fluctuations resulted in approximately $3.1 million of net unfavorable foreign currency impact to our Asia-Pacific income from operations primarily due to a generally stronger U.S. Dollar relative to the Australian Dollar during the three months ended March 31, 2019 compared to the three months ended March 31, 2018.
Interest Income. Interest income was $4.2 million and $4.6 million, respectively, for the three months ended March 31, 2019 and 2018. The average annualized yield for the three months ended March 31, 2019 was 1.49% versus 0.90% for the three months ended March 31, 2018.
Interest Expense. Interest expense decreased to $122.8 million for the three months ended March 31, 2019 from $126.3 million for the three months ended March 31, 2018, primarily attributable to (i) the reduction in lease interest expense due to the conversion of certain build-to-suit leases to operating leases upon the adoption of ASC 842 and (ii) the utilization of cross-currency interest rate swaps beginning in the first quarter of 2019. During the three months ended March 31, 2019 and 2018, we capitalized $9.9 million and $3.3 million, respectively, of interest expense to construction in progress.
Other Income (Expense). We did not record a significant amount of net other expense during the three months ended March 31, 2019. We recorded net other expense of $3.1 million for the three months ended March 31, 2018, which was primarily due to foreign currency exchange gains and losses.
Gain (Loss) on debt extinguishment. We did not record a significant loss on debt extinguishment during the three months ended March 31, 2019. We recorded a $21.5 million loss on debt extinguishment during the three months ended March 31, 2018 primarily due to settlement of financing obligations as a result of our SK2 land and building purchase.
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 income generated by the operations of our REIT and QRSs for the tax years ended December 31, 2019 and 2018, respectively. As such, other than built-in-gains recognized and withholding taxes, no provision for U.S. income taxes for the REIT and QRSs has been included in the accompanying condensed consolidated financial statements for the three months ended March 31, 2019 and 2018.
We have made TRS elections for some of our subsidiaries in and outside the U.S. In general, a TRS may provide services that may otherwise be considered impermissible for REITs to provide and may hold assets that may not be REIT compliant. U.S. income taxes for the TRS entities located in the U.S. and foreign income taxes for our foreign operations regardless of whether the foreign operations are operated as QRSs or TRSs have been accrued, as necessary, for the three months ended March 31, 2019 and 2018.
For the three months ended March 31, 2019 and 2018, we recorded $42.6 million and $16.8 million of income tax expense, respectively. Our effective tax rates were 26.6% and 21.0%, respectively, for the three months ended March 31, 2019 and 2018.

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