Stockholders' Equity

9 Months Ended

Sep. 30, 2020

Stockholders' Equity Rollforward

The following tables provide a rollforward of stockholders' equity for the three and nine months ended September 30, 2020 and 2019 (in thousands, except share and per share data):


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

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

Net income	—	—		—	—		—		—		—		133,304		133,304		46		133,350
Other comprehensive income	—	—		—	—		—		—		66,378		—		66,378		2		66,380
Issuance of common stock and release of treasury stock for employee equity awards	34,146	—		688	256		(256)		—		—		—		—		—		—

Issuance of common stock for equity offering	2,587,500	3		—	—		1,683,103		—		—		—		1,683,106		—		1,683,106
Dividend distribution on common stock, $2.66 per share	—	—		—	—		—		(235,334)		—		—		(235,334)		—		(235,334)
Settlement of accrued dividends on vested equity awards	—	—		—	—		—		(44)		—		—		(44)		—		(44)
Accrued dividends on unvested equity awards	—	—		—	—		—		(4,136)		—		—		(4,136)		—		(4,136)
Stock-based compensation, net of estimated forfeitures	—	—		—	—		75,642		—		—		—		75,642		—		75,642


											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 June 30, 2020	88,890,679	89		(341,285)	(127,042)		14,651,944		(4,639,041)		(1,140,291)		1,642,621		10,388,280		(22)		10,388,258

Net income	—	—		—	—		—		—		—		66,687		66,687		144		66,831
Other comprehensive income	—	—		—	—		—		—		38,490		—		38,490		30		38,520
Issuance of common stock and release of treasury stock for employee equity awards	287,635	—		11,705	4,356		27,372		—		—		—		31,728		—		31,728
Issuance of common stock under ATM Program	252,982	—		—	—		196,477		—		—		—		196,477		—		196,477
Dividend distribution on common stock, $2.66 per share	—	—		—	—		—		(236,538)		—		—		(236,538)		—		(236,538)
Settlement of accrued dividends on vested equity awards	—	—		—	—		81		(275)		—		—		(194)		—		(194)
Accrued dividends on unvested equity awards	—	—		—	—		—		(3,764)		—		—		(3,764)		—		(3,764)
Stock-based compensation, net of estimated forfeitures	—	—		—	—		74,648		—		—		—		74,648		—		74,648

Balance as of September 30, 2020	89,431,296	$	89	(329,580)	$	(122,686)	$	14,950,522	$	(4,879,618)	$	(1,101,801)	$	1,709,308	$	10,555,814	$	152	$	10,555,966


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

Balance as of March 31, 2019	84,465,156	84		(395,153)	(144,801)		12,043,056		(3,532,915)		(942,365)		1,002,053		8,425,112		(324)		8,424,788












Net income	—	—		—	—		—		—		—		143,527		143,527		325		143,852
Other comprehensive loss	—	—		—	—		—		—		(16,078)		—		(16,078)		(14)		(16,092)
Issuance of common stock and release of treasury stock for employee equity awards	26,435	—		359	76		(76)		—		—		—		—		—		—
Issuance of common stock under ATM Program	722,361	1		—	—		348,120		—		—		—		348,121		—		348,121
Dividend distribution on common stock, $2.46 per share	—	—		—	—		—		(207,949)		—		—		(207,949)		—		(207,949)
Settlement of accrued dividends on vested equity awards	—	—		—	—		12		(33)		—		—		(21)		—		(21)
Accrued dividends on unvested equity awards	—	—		—	—		—		(2,972)		—		—		(2,972)		—		(2,972)
Stock-based compensation, net of estimated forfeitures	—	—		—	—		59,502		—		—		—		59,502		—		59,502

Balance as of June 30, 2019	85,213,952	85		(394,794)	(144,725)		12,450,614		(3,743,869)		(958,443)		1,145,580		8,749,242		(13)		8,749,229

Net income (loss)	—	—		—	—		—		—		—		120,850		120,850		(39)		120,811
Other comprehensive loss	—	—		—	—		—		—		(81,793)		—		(81,793)		(28)		(81,821)
Issuance of common stock and release of treasury stock for employee equity awards	276,497	1		2,010	424		24,000		—		—		—		24,425		—		24,425


							Additional Paid-in Capital		Accumulated Dividends		AOCI (Loss)		Retained Earnings		Equinix Stockholders' Equity		Non-controlling interests		Total Stockholders' Equity
	Common Stock			Treasury Stock
	Shares	Amount		Shares	Amount
Issuance of common stock under ATM Program	181,194	—		—	—		99,421		—		—		—		99,421		—		99,421
Dividend distribution on common stock, $2.46 per share	—	—		—	—		—		(209,226)		—		—		(209,226)		—		(209,226)
Settlement of accrued dividends on vested equity awards	—	—		—	—		12		(230)		—		—		(218)		—		(218)
Accrued dividends on unvested equity awards	—	—		—	—		—		(2,993)		—		—		(2,993)		—		(2,993)
Stock-based compensation, net of estimated forfeitures	—	—		—	—		61,403		—		—		—		61,403		—		61,403

Balance as of September 30, 2019	85,671,643	$	86	(392,784)	$	(144,301)	$	12,635,450	$	(3,956,318)	$	(1,040,236)	$	1,266,430	$	8,761,111	$	(80)	$	8,761,031

Accumulated Other Comprehensive Loss

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


	Balance as of December 31, 2019		Net Change		Balance as of September 30, 2020
Foreign currency translation adjustment ("CTA") gain (loss)	$	(1,056,918)	$	66,914	$	(990,004)
Unrealized gain (loss) on cash flow hedges (1)	15,638		(54,966)		(39,328)
Net investment hedge CTA gain (loss) (1)	107,619		(179,213)		(71,594)
Net actuarial gain (loss) on defined benefit plans (2)	(952)		77		(875)
Accumulated other comprehensive loss attributable to Equinix	$	(934,613)	$	(167,188)	$	(1,101,801)

(1)Refer to Note 7 for a discussion of the amounts reclassified from accumulated other comprehensive loss to net income.

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

Changes in foreign currencies can have a significant impact to the Company's 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 fewer U.S. Dollars when the U.S. Dollar strengthens. As of September 30, 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 condensed 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 nine months ended September 30, 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 condensed consolidated financial position and results of operations including the amount of revenue that the Company reports in future periods.

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 $1,213.4 million, 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 $1,683.1 million, net of underwriting discounts, commissions and offering expenses.

In December 2018, the Company launched an ATM program, under which it may offer and sell from time to time up to an aggregate of $750.0 million of its common stock in "at the market" transactions (the "ATM Program"). For the three and nine months ended September 30, 2020, the Company sold 252,982 shares and 415,512 shares, respectively, under the ATM Program, for approximately $196.5 million and $298.3 million, respectively, net of payment of commissions to sales agents and other offering expenses. For the three and nine months ended September 30, 2019, the Company sold 181,194 shares and 903,555 shares, respectively, under the ATM program, for approximately $99.4 million and $447.5 million, respectively, net of payment of commissions to sales agents and other offering expenses. As of September 30, 2020, no shares remained available for sale under the ATM Program.

Stock-Based Compensation

For the nine months ended September 30, 2020, the Compensation Committee and/or the Stock Award Committee of the Company's Board of Directors, as the case may be, approved the issuance of an aggregate of 709,450 shares of restricted stock units to certain employees, including executive officers. These equity awards are

subject to vesting provisions and have a weighted-average grant date fair value of $593.74 per share and a weighted-average requisite service period of 3.30 years. The valuation of restricted stock units with only a service condition or a service and performance condition require no significant assumptions as the fair value for these types of equity awards is based solely on the fair value of the Company's stock price on the date of grant. The Company used revenues and adjusted funds from operations ("AFFO") per share as the performance measurements in the restricted stock units with both service and performance conditions that were granted in the nine months ended September 30, 2020.

The Company uses a Monte Carlo simulation option-pricing model to determine the fair value of restricted stock units with a service and market condition. The Company used total shareholder return ("TSR") as the performance measurement in the restricted stock units with a service and market condition that were granted in the nine months ended September 30, 2020. There were no significant changes in the assumptions used to determine the fair value of restricted stock units with a service and market condition that were granted in 2020 compared to the prior year.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of revenues	$	7,856	$	7,104	$	24,854	$	18,616
Sales and marketing	17,630		15,794		54,390		44,252
General and administrative	49,762		40,973		152,414		111,545
Total	$	75,248	$	63,871	$	231,658	$	174,413