Good afternoon, and welcome to Equinix Conference Call. [Operator Instructions] Also today's conference is being recorded. If anyone has any objections, please disconnect at this time. I'd like to turn the call over to Katrina Rymill, VP of IR. You may begin.

Good afternoon, and welcome to today's conference call. Before we get started, I would like to remind everyone that some of the statements that we'll be making today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks we identified in today's press release and those identified in our filings with the SEC, including our most recent Form 10-K filed on February 25, 2011, and Form 10-Q filed on October 28, 2011. Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. In addition, in light of Regulation Fair Disclosure, it is Equinix's policy not to comment on its financial guidance during the call, unless it is done through an exclusive public disclosure. In addition, we will provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why the company uses these measures in today's press release on the Equinix Investor Relations page at www.equinix.com. We would also like to remind you that we post important information about Equinix on the Investor Relations page of our website. We encourage you to check our website regularly for the most current available information. With us today are Steve Smith, Equinix's CEO and President; Keith Taylor, Chief Financial Officer; Jarrett Appleby, Chief Marketing Officer; and Charles Meyers, President of the Americas. Following our prepared remarks, we will be taking questions from sell-side analysts. In the interest of wrapping this call within 1 hour, we'd like to ask these analysts to limit any follow-on questions to one. At this time, I'd like to turn the call over to Steve.

Thank you, Katrina. Good afternoon, and welcome to our fourth quarter earnings call. I'm pleased to report that Equinix delivered strong business and financial results in the fourth quarter, and another year of solid revenue and adjusted EBITDA growth for 2011. As depicted on Slide 4, revenue grew 32% to $1.607 billion for the year, and adjusted EBITDA increased 36% to $738 million, consistently outperforming market growth rates. Our business is running in all cylinders, driven in large part by the strong demand we are experiencing for Platform Equinix across all verticals, and our market is healthy with favorable supply-demand dynamics and pricing remains firm. We are executing on our goal of generating over $3 billion in annual revenues by 2015, while targeting positive adjusted free cash flow in 2013. We're also implementing shareholder-friendly actions. In November, we announced intentions to deploy up to $500 million for the direct benefit of shareholders, which includes a share repurchase program of up to $250 million through the end of 2012. I'm pleased to report in 2011, we repurchased 870,000 shares for a total of $87 million. Turning to Slide 5. I'd like to highlight how we invested in the business in 2011. We generated $587 million in cash from operations for the year, and reinvested $557 million in 20 key global IBX expansions with the same level of targeted returns. Ongoing CapEx was $128 million for the year, which included success-based installations, maintenance and value-enhancing initiatives. We now have over 6.5 million gross square feet of space, which is the largest retail data center footprint in the world. Other successes for the year include achieving 99.9999% of availability across the global platform, increasing interconnection revenue by over 20% ending the year with over 97,000 cross-connects, and growing Internet exchange traffic over 30%…

Thanks, Steve. And good afternoon to everyone on the call. I'm pleased to provide you with additional details on the fourth quarter results, including an update on the regional performance. With the exception of our financial results, all other metrics will exclude the impact of ALOG. So starting with Slide 9 that we posted today in our presentation. Financial results for Q4 were ahead of our expectations, and we remain focused on building the business around key verticals and ecosystems. Global Q4 revenues were $431.3 million, including $17.3 million attributed to ALOG, a 3% quarter-over-quarter increase and up 25% over the same quarter last year. A strong performance was offset by the negative currency headwinds experienced throughout the quarter. Quarterly revenue was negatively impacted by $7.6 million when compared to the average rates used in Q3, but $3.1 million when compared to our FX guidance rates. Quarter-over-quarter, revenues grew greater than 5% on a constant currency basis and, once again, reflect the strength in our operating model. Our pricing remains firm across each of our regions. Global MRR churn was approximately 2%, consistent with our expectations and within our targeted range, again, demonstrating the long-term nature of our customer relationships. Looking forward, we expect global MRR churn to average about 2% per quarter in 2012, but it is important to note that MRR churn can fluctuate. Global cash gross profit for the quarter was $287.8 million or cash gross margin of 67% higher than our initial expectation. The result of stronger-than-expected revenues and a lower-than-planned utility cost. Global cash SG&A expenses were $89.7 million for the quarter, consistent with our guidance and reflect the full impact of our sales, marketing and IT initiatives. Global adjusted EBITDA was $198.1 million for the quarter. Our adjusted EBITDA margin was 46% and reflects…

Thanks, Keith. Let me now shift gears and cover our go-forward strategy and outlook for 2012. For 2012, we have 5 strategic priorities to fuel the value proposition we offer customers, as shown on Slide 18. First, we will continue to proactively develop our ecosystems to drive customer value and improve business performance through more interconnection in our IBXs. Network choice facilitates competitive advantage; proximity to partners and suppliers improves performance; and cross-connects accelerate deployment and reduce cost for our customers. Each interconnection we add increases the value of our ecosystems to customers and, ultimately, enables Equinix to become the interconnection platform for many of the world's leading businesses. Second, we will continue to expand our global reach and scale in order to maintain our position as the leading global data center business in our market. Today, over 59% of our revenues come from customers deployed in multiple countries, which demonstrates the benefit of having the broadest and deepest coverage around the world. We will continue to look at expanding Platform Equinix to key new markets to accommodate the growth of our existing customers. Third, we will continue to execute our vertical go-to-market strategy for our sales force and expand our channel partnerships. In 2011, we completed our sales force expansion to improve our coverage and vertical orientation. This year, we will continue to refine our sales force deployment and evaluate additional partnerships to enable a choice in cloud brokering, private cloud and security services. Our partnership strategy will focus on high-growth segments and increase our addressable market by leveraging new distribution channels, while offering additional solutions to our customers. The fourth element is refining our capital allocation strategy. While our first priority is to invest cash in the business to capture the robust demand we are experiencing, we are…

[Operator Instructions] Our first question comes from Gray Powell.

Just had a couple of quick ones. I'd like to make sure that I understand your CapEx budget correctly. On the last call, you said you had about $500 million in CapEx that included announced projects and ongoing CapEx. And that left about a $200 million to $300 million cushion in guidance. Today, you announced, I think, 5,200 cabinets by Q1 of 2013. So can you just update us on where that leaves the cushion, and just roughly speaking I was estimating these expansions will cost about $200 million, so can you tell me if I'm in the ballpark there?

Gray, I mean, ultimately, you're absolutely right. What we have now done is start to identify the projects we're embedded in, in that cushion. And so our DC11 site and the expansion into DC10 is an example of our Sydney and Singapore. So we fully intend to spend somewhere between $700 million and $800 million this year, and it is fair to say that you should probably shoot for the midpoint of that right now, and then we'll update you as the year progresses. But we fully intend to spend that capital.

Okay, great. And then a second question, if I may. I mean the North American MRR saw that, that sequential increase since, I believe, Q2 of 2010. Can you just give us any insight on the pricing environment in the U.S. or has there been any benefit to the retail co-location pricing due to larger telco deals in 2011?

Yes, sure. Gray, this is Charles Meyers. Yes, we continue to see a very firm pricing environment, and I think the key to that is continuing to target the value where our segments of our customers really are achieving significant value out of using Platform Equinix. So we've seen very strong progress on our global platform deal, not only in the North America market but exporting business to our other regions as well. So we continue to see a very healthy pricing environment. As we noted and have noted in the past, our sweet spot really is in the sort of mid-sized deals for either network nodes or service aggregation nodes. And consistent with Steve's commentary on the multi-tiered architecture, our focus on the first 2 tiers of that architecture really allow us to deliver superior value, and correspondingly, get better price realization.

Our next question comes from Chris Larsen.

I wonder if you could just talk a little bit -- you alluded to the ability, Keith, of levering up the balance sheet, and I guess you've been fairly successful and quite successful, particularly with the ALOG expansion. If you could talk a little bit about other geographies that you might be looking at in terms of getting into. And I have a follow-up after that.

Let me start, Chris. I think consistent with what we've said in the past, we're very interested in the core, as we referred to in the past, BRIC countries. And as you all are aware, we made a play into Brazil. We're most interested probably in next priorities in China and India, and we have activity in both of those parts of the region, business development-type activity looking for the right opportunity. Our customer demand is very high in both of those parts of the world. I'd say that the fourth element of the BRIC countries is less priority today. And then there's a couple of tier 2 markets that are -- Keith and I have teams looking at. I think I have mentioned in Japan after the difficult times they had, a lot of data center companies in Tokyo are starting to look in Osaka for future builds. So we have a team looking in Osaka also. So we're investigating in that market. And then Australia, we've taken a look at the Melbourne market outside of the Sydney market. So those are the priority areas for the company.

And so, Chris, what else it does as you sort of start to think about cash that could be deployed tax for that, you think about the capital expenditures, and also sort of attached to that the shareholder-friendly action that we have taken and intend to continue to take. That actually will consume a lot of our cash that when we manage, basically, our net leverage, I think we should -- including liquidating some of the payables for our construction projects that sits on the balance sheet, we should get very close to the range, if not inside the bottom end of that range in 2012. And so it's something we'll continue to watch, as we sort of manage our capital plans and look at how we best take advantage of our capital structure.

Great. And then just as a follow-up. Steve, you said that some of the differences are -- I think, actually it was Keith, you said something about the differences in Europe, it had to do with timing. And then I just wanted to understand, is that the contract length, the time from initiation to closing is taking a little bit longer in Europe, or just the timing of when certain contracts close was the difference in the revenue performance in Europe?

Yes, it's more -- it was Americas, and it was more the installation interval that we talked about, so we have good booking activity across all 3 regions. And as you've seen in the past, and it's no different this quarter, sometimes you're going to see ebbs and flows in the amount of cabinets that install, in particular at the end of the quarter. And of course a factor of that is also churn, what happens in churn over a given period of time and whether it's a large installation, low pricing. And Charles alluded to it on the last call, there are certainly some cases where we see positive churn as attached to a number of cabinets. That could leave us an impact to basically our net cabinets add. So overall, I would tell you it's more just a natural outcome of how we booked, our booking activity this quarter, and you will continue to see it ebb and flow, and then how that installs over a period of time. So nothing that we are drawing any concern from.

But we certainly aren't seeing an increase in our install interval.

And the increase in install intervals, is that a customer demand?

No, clearly not -- we're not seeing it.

Our next question comes from Frank Louthan. Frank G. Louthan - Raymond James & Associates, Inc., Research Division: Just sort of follow-up on that. You've talked in the past like getting to sort of $3 billion run rate. Is that, again, will you need to get into China and India to get there? And then can you comment on sort of the margin trends going forward? How should we think about that, should continue to see some continued improvements there or relatively flat?

Number one point, really, to get to the target of $3 billion or thereabout in 2015, we don't have to do any M&A, if you will. Having said all of that, our intention would be that we would get -- we would invest in some additional markets over that time period. And then putting all that into perspective, as we think about sort of rolling out our plan towards what we call our long-term operating targets, we do expect margins to improve over time. As you know, we're investing very heavily, again, in 2012, both in expansion projects, we're investing heavily in our IT platform, as Steve alluded to, and we're going to continue to verticalize our sales organization. And when you take all that into consideration, we still -- we're still going to deliver, roughly, 46%-plus on EBITDA margin line in 2012. And so we're comfortable that margins will continue to creep up over time, as we could get to scale, and as we leverage off investments we've made over the last few years. And just sort of put that in perspective, as a company with targeted roughly 50% adjusted EBITDA margins. And that's something that we still have our sights set on.

Our next question comes from Mike Rollins.

I was wondering if you guys have explored the possibilities of converting part or all of your business into a REIT structure, and if you can give us an update in terms of how you're looking at that possibility.

Thanks for the question. We sort of expected that we're going to get that question from the field here. First and foremost, I think it's very important to note that my responsibility, one of my key responsibilities for 2012 is really to look at this, this possibility of turning or becoming a REIT over some period of time. We have to look at that very seriously in 2012. It's consistent with sort of our prior expectations that if you consume all of your NOLs in the 2013, 2014, or in some cases maybe even 2015 time frame, you have to really back up and figure out when do you start thinking about how to roll that out. So first and foremost, I'd tell you we are thinking about it very seriously. We're also thinking about other tax funding initiatives even as we walk and review this particular issue. And one we referred to not long ago with the Luxembourg HoldCo Structure that we're using for Europe. That all said, though, I think it's important I make a couple of comments. Number one, we're absolutely committed to shareholder return. And recognizing that, that there are some potential benefits attached, and I said potential benefits attached to the REIT, is something we have to look at very, very seriously. But also we are aware there are some structural issues, there are some considerations, and clearly there are some trade-offs. So taking all of that into consideration, we are going to put some energy towards this initiative this year, and will continue to update you on a quarterly basis as we progress through this serious and detailed review.

Keith, if I could follow up, 2 questions on that. The first part is, have you given some thought to what the AFFO number, what it looked like last year, for example, in the reported financials, or what the guidance would infer for this year? And then you mentioned about the commitment to shareholder returns. As you look at the buyback, the $100 million, or roughly $90 million or $100 million that you gave in 4Q, that was a significant step forward in the pace of the buyback relative to what the initial program was set at. So how do you look at buying back shares, is it just sort of smoothing it out over time to hit your commitment, you look at that more opportunistically depending on where the share price is? If you can give us a little flavor of how you look at distributing some of those returns to shareholders.

Sure. Well, I think to address the first question on AFFO. I think a great surrogate for us is really discretionary free cash flow, and we presented that in our slides today, and certainly it's $9-plus when you look at fiscal year '11. If you look at the last quarter, it's roughly $3 AFFO -- I'm sorry, discretionary free cash flow per share. And as we look forward, we expect to see that grow. And we said we can see it grow upwards of $11, $10 to $11 next year, being 2012. So it's really a number that is sizable and we would expect that it will continue to grow with the success for our business. In many ways it's going to grow with the EBITDA line. The EBITDA is such a great cash surrogate for us from an operating cash flow perspective. When we get into sort of shareholder value topics such as the share repurchase, we saw an opportunity, quite frankly, in Q4. As you know, we announced in mid to late November the approval of the program as supported by our Board. And we went through a very volatile time, and we took that as an opportunity to acquire where we could meaningful amounts of our stock, roughly 870,000 shares. And that sort of takes our sort of year-end sort of stock number down to about 46.7 million shares outstanding. As we look forward, we're going to look at what is the best and highest use of our cash. And certainly, we have the approval to acquire us shares, up to $250 million worth of share repurchase. So we're going to look at the opportunities that present themselves. And as we look forward in time, we will focus on the best and highest use of our cash recognizing that our overall objective as a company, both as I said and as Steve alluded to in his comments, is to drive our shareholder value. And our commitment is to the shareholder. We've also attached it, as you know, to our compensation plan for 2012. So we see that as another way to indicate to the shareholders, we are going to very much focus on value-creation for the shareholders.

Our next question comes from David Barden.

If I could just ask 2 related questions. One, Keith, on the guidance. I seem to ask this one quite a bit. But if I'm annualizing the fourth quarter EBITDA, obviously you guys have raised EBITDA guidance adjusting for currencies to 857 or better. But even if I look at the annualized fourth quarter and that 857 number, what it suggests is that EBITDA is going to grow sequentially every quarter around $7 million. Now that's obviously roughly 2/3 of how faster we're growing in most of 2011, even normalizing for ALOG and onetime items. And then, we have got the entire cost structure of a larger sales force already embedded in the fourth quarter number. And presumably having a 60% larger sales force is going to give us some tailwinds at the top line and then to profitability for the rest of '12. So can you kind of walk us through how this much larger sales force, with the cost structure already embedded in, is going to lead to slower sequential EBITDA growth in '12 than we saw in '11?

Good. Great question, David. So why don't I take the first part, and then I'm going to pass it to Steve. Certainly when we look at the guidance we've offered both in Q1 and for 2012, we have considered, of course, our exit rates, our run rates and all that. I think it's important to note, number one, when you look into 2012, it's very early in the new year. And because it's early in the new year, we're taking position, we're just going to continue with the greater than story that we've done in the past. It works very well for 2011, and we would expect that to hold true for 2012 as well. That all said, as Steve mentioned, we're absorbing $15 million of FX headwinds. Because of that, we are basically from where we were last quarter to where we are today, the same number, the same results of the local level is greater than $1.885 million. So we are stepping it up. And then as we look at the quarter-over-quarter stuff, again, it's just very early the year. We're coming off a good strong quarter. We want to make sure that we continue to deliver. There's a lot of expectations that have been set for the team. That, in addition to the fact we're absorbing not only some capital cost that Steve alluded to for our high-key program, on the flip side there is a fairly meaningful number of operating expenses that will be attached to that same project. And that number is going to be, roughly, another $10 million-plus. And so when you look at that discrete project and what we're committing plus the FX currency, we feel at this stage of the game we've given you good -- we've given you a fair guidance. Now recognizing, we're only about 9 weeks away from updating our guidance because we will do that on the first quarter call. But right now, we feel very good about the numbers we've delivered. And as we did in 2011 and we have the same expectation for 2012, that we're going to continue to execute well and prove that we can deliver a strong operating performance for the business.

And David, I'd add a couple other comments just to color sales productivity a little bit because I think it's a very good question with the investment we've made. As you heard in our script, and I think Charles mentioned, we are very, very disciplined in how we're growing the type of customers we're bringing into these IBXs. So we are focused on value propositions and value aware customers. We're deadly focus on ecosystems and interconnection. So the sweet spot of the deals that we're pushing and approving are in this 10 to 30, 40 cabinet-type size, that these first 2 tiers of the architecture that I described today. So we fully expect to get higher-quality bookings, and that will drive firm to stable pricing that we're seeing. And that's where we're focused. And that's what we've asked the sales leadership to drive towards. So from a sales productivity standpoint, we're very happy with where we are. We're completing the verticalization of the sales force around our 5 go-to-market industry verticals. And we're seeing the bookings come in the way we want it. The pipeline is very strong. We're seeing, as we mentioned today, very good strength in network and financial. It's a little bit slower in the enterprise, and we knew that because the enterprise was made up of several other big industry verticals. And so we're learning where to go penetrate there. We're seeing success in a couple of segments, but there's more work to be done there. We have our global account teams all set up across major global networks, big global platform players and our key financial global folks. So we're making -- we're going higher and deeper in the big global accounts. The channel partnerships are starting to step up. We've announced 3 publicly, there'll be more to come as the year unfolds. We have our compliance go-to-market relationship with the company called Carpathia in the government circles and some enterprise customers. We're going to market with Amazon with the AWS Direct Connect. And we're also going to market with Rackspace with the OpenStack and cloud builder offer. So there's quite a bit going on there. Our sales engine is selling the global footprint, so whatever market the salespeople are in, they're selling the global footprint, which is working very good. So productivity, net-net, is up into the right, and it's ramping at the pace that we thought it would, but we're very focused on this, on a certain-sized deals. And as Keith and I said many times to the whole audience, we could grow this company a heck of a lot faster than we are today, but we're aiming this thing at ecosystem, higher-quality bookings, very disciplined in the type of deals that we're allowing into the IBXs. And that's where -- that's where the focus is. So we are achieving the balance we want with the type of bookings.

Great color. Super appreciate it. One last housekeeping item, if I could quickly, Keith. I think you said that there was a onetime expense out in Asia that impacted comps there. Could you elaborate?

There's actually -- unfortunately wasn't just a one-off. There are certainly, there are some one-offs, but there is a higher repairs and maintenance that we brought into the quarter into Q4. There was some incremental power cost, and that's why you see the cash gross margin line down a little bit, partly due to settlement agreement that we had with one of the providers there. And then there's just some discrete accruals that we made in the market in that region. Again, it gets impacted a little bit more by the size of the region relative to the other 2 regions. But overall, we expect them to get back to their traditional EBITDA trends, that region I'm referring to.

Our next question comes from Sterling Auty. Sterling P. Auty - JP Morgan Chase & Co, Research Division: Two questions. Just elaborating, Steve, on the move with the cloud, you talk about going market with Amazon and Racks. How much of that movement in the cloud into data centers is going to come through that public cloud through vendors like that versus private cloud initiatives where you may see companies coming directly to implement their own private cloud directly in Equinix facilities?

Let me just -- we're obviously looking at all of the above. And our cloud business this past year grew to roughly 24% of our revenue for the company, so it's been very high growth for us. And we're seeing private cloud, public cloud, I mentioned we have 300-plus pure-play cloud providers that are operating in our IBXs and re-selling out to the world. There's another 500 IT service, managed service hosting companies that are offering cloud access. So we have a lot of activity going on here. The Direct Connect example you point to is just one example of a alternative method for CIOs to get a higher secure, avoid the Internet-type connection inside of our IBXs. And there are several other players that are also -- that we're talking today about Direct Connect activity. But I don't know if Charles or Jarrett, you have anything to add what you're seeing...

No, I don't know that I'll be able to put my finger on a specific breakdown in between the public and private. In fact, what we're seeing is that the people are very much going to this hybrid infrastructure which we talked about in the script, which is interconnecting the public cloud services for particular loads that are well served by that. I mean, particularly, those that are highly variable. But over time, as they fill up VMs, it really make sense oftentimes for them to move that into OEM infrastructure. And then they're also extending that into private cloud to access cloud-based services of various sorts. So this sort of evolution towards hybrid cloud infrastructure is aggressively happening. And again, I think serves us, it really serves as well as an enabler, fundamental enabler of cloud computing. Sterling P. Auty - JP Morgan Chase & Co, Research Division: Okay. And the follow-up, Steve, you mentioned a service aggregation point, I think in Europe with AMS3 that you're landing one of those as super pops. Do you, at this point, have some early visibility on the type of customer that wants to get into that aggregation point? Will it be a consistent contract, meaning will the type of customer and the type of contract that you have for that type of arrangement be similar to what you typically have, or is it going to be anything special about that deployment in particular?

Yes, this is Jarrett. It's a good question. I think really what you're going to see is, first of all, it started with the content players who are really leveraging the AWS infrastructure. But it is our typical business. They come in to take advantage of public Internet access and then Direct Connect. What's happening now is enterprises are using private networks, particularly Ethernet access into the cloud. So what you'll see is, we're seeing this evolution and it's exactly -- it started with public cloud infrastructure using our Internet exchanges. It then leveraged our Direct Connect offerings, which we're doing in multiple markets around the world. We're seeing natural cloud hubs form in about 12 to 15 markets, and that's growing. And then you're seeing an evolution to private networking, and particularly Ethernet, and that's why we've been talking about Ethernet the last year, that still allow you to directly connect from outside the data centers from an enterprise standpoint. And that opens up the market to the cloud-enabled enterprise as we call it, that community.

Our next question comes from Tim Horan. Timothy K. Horan - Oppenheimer & Co. Inc., Research Division: Keith, is there -- there's some debate out there whether or not you can even become a REIT. I guess, in your mind, is there any debate, and what do you think would be the biggest structural hurdle to that? I just had a big quick follow-up in operating expenses, too.

Yes. Well, Tim, I think there's always a debate on what are the pros and cons. And clearly we, as a company, are going, as we've said, focus on driving as much shareholder value, irrespective of whether or not we can become a REIT or not, a lot of work to do. The complexity, typically, will revolve around the amount of interconnection services that we provide as a company. And obviously, you've seen with our announcements today the success that we're having in that particular revenue line. And then the other piece, of course, is in the international. And you've got to take all of that into consideration as you develop what one refers to as a taxable REIT subsidiary. So the company's highly focused on it. I think like anything, you got to review it. You've got understand it and appreciate not only the sort of benefits but also the complexity and then just make a decision. But I made a personal commitment to Steve that someday we're going to engage in very thoroughly in 2012, and we're already actually working at looking at the analyses. And we'll continue to update you, and that's the best we can offer right now. Timothy K. Horan - Oppenheimer & Co. Inc., Research Division: Great. And then just on the operating expenses. Any more color on utility expense declines in the quarter, and is this an ongoing trend, and what enable that?

Again, utilities, typical -- it's what you typically see in Q4 relative to Q3, there are some seasonal impact that comes out of -- particularly in the North American region when you look from Q3 to Q4. So that will be one thing that you tend to pay higher price points per unit in the Americas in the Q3. And then you, of course, you've got the step-down in Q4. So that has, unfortunately, a natural way of representing itself in our financials. And also this quarter we did get the benefit of some utility rebates based on the programs that we have entered into with our local providers. But overall, I would tell you that utility as a sort of a percent -- utility cost, pardon me, as a percent of our revenues, should always -- it's going to ebb and flow. It's typically been in the range of 12% to 14% of our revenue line. And we're going to continue to look at it from that perspective. But the one other comment I would make is that we are making investments, and part of the reason why you saw our ongoing CapEx go up in 2011 is the fact that we're making investments in the data center that will, hopefully, drive greater efficiency into the data center or the IBX. And over time that will enhance our ability to deliver higher returns.

Our next question comes from Colby Synesael.

I have 2 questions. First off, on the CapEx. If we look at the first quarter guidance, and it was obviously rounded up to the course of the year. It would imply that you're looking for a somewhat linear CapEx over the course of the year. Is that the case or do you think it could be more front-end loaded, in other words potentially a big jump in the second quarter and then maybe kind of tails off by the time we get to the fourth quarter? And then the other question had to do with the partners in that strategy, you talked about how you're focused more on that this year and you mentioned Carpathia, AWS and Rackspace as examples that you've recently signed. Is there going to be a revenue opportunity at some point for you? In other words, will there ever be a point that when you look at it strategically, where you could actually be reselling their services, and actually there might be some type of revenue-share opportunity? Or is this really just to sell more of your co-location services?

Good question. I'm going to take the first one, Colby, and then I'm going to pass it off. I think when you look at CapEx, it looks like it's going to be ratable at least by the guidance we've given you. That's probably not going to be the case. I think it's going to be generally more front-end loaded, all else being equal. Something that we'll continue to update you on, on a quarterly basis. But we would expect, certainly, the first 3 quarters of the year to take the majority of the burden. And so because of that, I would say that your -- the last quarter of the year is probably going to be the least significant from a CapEx perspective. But we're obviously looking -- we measure CapEx now, as you know, on a cash basis, and we're going to continue to review it and make sure we're sort of -- we're planning it well, so we can guide you as effectively as we can. And right now, I tell you, the first quarter is more, it's numerical coincidence that it adds a quarter of our total year's guidance.

And Colby, this is Jarrett again. I think, really, what we're seeing is an opportunity, one, we've identified a group of partners that really helped the value from platform-enabled services, particularly for the enterprise. A lot of the enterprise want bundled solutions. And we have identified a group of partners with the sales organization to go target, particularly around private, public cloud offerings, a cloud brokering capability, a cloud management capability and a security. So think of them as platform enabled services that are part of our portfolio that we can sell. And we get our traditional cabinets and interconnection business, are also able to start monetizing with them, they're incenting us to sell those kinds of solutions as well. So it is an enhancement of our value prop and a total solution that we're now positioning to the enterprises to make it easier to buy Platform Equinix.

All right. But you don't envision a point where you're training yourselves for as to actually sell some of those cloud-hosting services?

We actually kicked off at our sales kickoff to educate them and position, not re-sell but sell side by side, more sell with a partner.

Our final question comes from Jonathan Schildkraut.

Great. Just one housekeeping item and then maybe if we could dive into some more strategic stuff. Keith, could you tell us where the RP basket stood at the end of the year?

Yes, it's going to be -- it's just slightly up above over what we announced in the last quarter. So last quarter was roughly $191 million, so by now we're estimating it's just in and around the $200 million range, Jonathan. Again, it's roughly 50% of the C&I plus the equity, so it will be between $200 million and $210 million at the end of the year, roughly in that range, and that's what we're estimating.

All right. I was wondering if we could talk about DC10. You have talked a lot about delivering hybrid architectures, addressing what really is a growing opportunity to match up dedicated and shared infrastructure. DC10, you've announced one customer win, and today, you talked a bit about investing a little bit more into that facility. I was wondering if you can spend, or maybe Charles could spend a little time telling us what's going on down there and what you're seeing, and maybe a little bit more color.

Thanks, Jonathan, this is Charles. So yes, we are delivering Phase 1 of DC10 this quarter. We've already presold several deals into that facility, and we're seeing a very strong funnel. So strong, in fact, that as you know, that we already announced -- approved and announced today our Phase 2 build. And I think, overall, what we're seeing is the customer response there really strongly validates our hypothesis behind that investment. And we're seeing strong demand from these customers with the multi-tiered architecture requirement, and customers who really want to maintain a comprehensive relationship with an infrastructure partner like us. And so again, it's not for everybody. I think it's a compliment to what we deliver for our ecosystem-focused customers. And again, those that have that kind of multi-tiered architecture requirement and want the premium service delivery that Equinix provides, it's a great fit for them. We're seeing real strong momentum in the market.

That concludes our Q4 call. Thank you for joining us.

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