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Equity Method Investments
 6 Months Ended
Jun. 30, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments Equity Method Investments
We hold various equity method investments, primarily joint venture or partnership arrangements, in order to invest in certain entities that are in line with our business development objectives, including the development and operation of xScale data centers. Some of these xScale joint ventures are classified as Variable Interest Entities ("VIEs"), as discussed further below. The Asia-Pacific 1, Asia-Pacific 2, Asia-Pacific 3, EMEA 2 and AMER 1 Joint Ventures as noted below (the "VIE Joint Ventures") share a similar purpose, design and nature of assets. The following table summarizes our equity method investments (in thousands), which were included in other assets on the condensed consolidated balance sheets:
InvesteeOwnership PercentageJune 30, 2023December 31, 2022
EMEA 1 Joint Venture with GIC20%$156,058 $148,895 
VIE Joint Ventures20%230,385 191,680 
OtherVarious10,388 7,570 
Total$396,831 $348,145 
Non - VIE Joint Venture
EMEA 1 Joint Venture
We invested in a joint venture in the form of a limited liability partnership with GIC (the "EMEA 1 Joint Venture"), to develop and operate xScale data centers in Europe. The EMEA 1 Joint Venture is not a VIE given that both equity investors' interests 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. Our share of income and losses of equity method investments from this joint venture was insignificant for the three and six months ended June 30, 2023 and 2022 and was included in other income (expense) on the condensed consolidated statement of operations.
We committed to make future equity contributions to the EMEA 1 Joint Venture for funding its future development. As of June 30, 2023, we had future equity contribution commitments of $8.1 million.
VIE Joint Ventures
We invested in joint ventures in the form of limited liability partnerships with GIC to develop and operate xScale data centers in Asia-Pacific (the "Asia-Pacific 1 Joint Venture") and in Europe and the Americas (the EMEA 2 Joint Venture, see Note 5 above).
On March 11, 2022, we entered into the Asia-Pacific 2 Joint Venture with PGIM to develop and operate additional xScale data centers in Asia-Pacific (see Note 5 above).
On April 6, 2022, we entered into a joint venture in the form of a limited liability partnership with GIC (the "Asia-Pacific 3 Joint Venture") to develop and operate additional xScale data centers in Seoul, Korea. Upon closing, we contributed $17.0 million in exchange for a 20% partnership interest in the joint venture.
On March 10, 2023, we entered into the AMER 1 joint venture with GIC to develop and operate xScale data centers in the Americas (see Note 5 above). Upon closing, we contributed $8.4 million in exchange for a 20% partnership interest in the joint venture.
The VIE Joint Ventures are considered VIEs because they do not have sufficient funds from operations to be self-sustaining. While we provide certain management services to their operations and earn fees for the performance of such services, the power to direct the activities of these joint ventures that most significantly impact economic performance is shared equally between us and either GIC or PGIM, as applicable. 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 Equinix and either GIC or PGIM, as applicable. We concluded that neither party is deemed to have predominant control over the VIE Joint Ventures and neither party is considered to be the primary beneficiary. During the three and six months ended June 30, 2023, our share of income and losses of equity method investments from these joint ventures was insignificant both individually and in the aggregate, and was included in other income (expense) on the condensed consolidated statement of operations.
The following table summarizes our maximum exposure to loss related to the VIE Joint Ventures as of June 30, 2023 (in thousands):
VIE Joint Ventures
Equity Investment$230,385 
Outstanding Receivables12,340 
Future Equity Contribution Commitments (1)
69,745 
Maximum Future Payments under Debt Guarantees (2)
114,067 
Total $426,537 
(1)The joint ventures' partners are required to make additional equity contributions proportionately upon certain occurrences, such as a shortfall in capital necessary to complete certain construction phases or make interest payments on their outstanding debt.
(2)In connection with our 20% equity investment in the EMEA 2 Joint Venture, we provided the lenders with our guarantees covering 20% of all payments of principal and interest due under EMEA 2 Joint Venture's credit facility agreements. A portion of the guarantees related to our AMER 1 Joint Venture (see Note 11).
Other Related Party Transactions
We have lease arrangements and provide various services to the EMEA 1 Joint Venture and the VIE Joint Ventures (the "Joint Ventures") through multiple agreements, including sales and marketing, development management, facilities management, and asset management. These transactions are generally considered to have been negotiated at arm's length. The following table presents the revenues and expenses from these arrangements with the Joint Ventures in our condensed consolidated statements of operations (in thousands):
Three Months Ended
June 30,		Six Months Ended
June 30,
Related PartyNature of Transaction2023202220232022
EMEA 1 Joint VentureRevenues$6,951 $18,880 $13,992 $25,182 
EMEA 1 Joint Venture
Expenses (1)
6,587 (916)8,244 3,412 
VIE Joint VenturesRevenues17,264 13,185 39,067 20,187 
(1)Balances primarily consist of rent expenses for a 15-year sub-lease agreement with the EMEA 1 Joint Venture for a London data center.
The following table presents the assets and liabilities from related party transactions with the Joint Ventures in our condensed consolidated balance sheets (in thousands):
Related PartyBalance Sheet Line ItemJune 30, 2023December 31, 2022
EMEA 1 Joint VentureReceivables$26,568 $73,929 
Contract Assets7,407 7,261 
Finance Lease Right-of-Use Assets
$101,672 $100,968 
Operating Lease Right-of-Use Assets1,511 — 
Other Liabilities and Payables40,736 1,193 
Operating Lease Right-of-Use Liabilities1,558 — 
Other Liabilities and Payables - Construction Obligation (1)
— 18,967 
Deferred Revenue16,188 15,470 
Finance Lease Right-of-Use Liabilities
112,315 108,603 
VIE Joint VenturesReceivables12,340 19,935 
Contract Assets25,237 5,281 
Operating Right of Use Assets1,226 — 
Deferred Revenue4,817 — 
Operating Right of Use Liabilities1,167 — 
(1)The balance primarily relates to the obligation to pay for future construction for certain sites sold as a part of the EMEA 1 Joint Venture transaction.