Good afternoon, and welcome to Equinix Conference Call. [Operator Instructions] 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'd 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 24, 2012, 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's Equinix's policy not to comment on its financial guidance during the quarter, 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 the 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'd 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; Charles Meyers, President of the Americas. Following our prepared remarks, we'll be taking questions from sell-side analysts. In the interest of wrapping this call in an hour, we'd like to ask these analysts to limit any follow-on questions to one. At this time, I'll turn the call over to Steve.

Thank you, Katrina. Good afternoon, and welcome to our first quarter earnings call. I'm pleased to report that Equinix delivered strong financial results in the first quarter and a great start to 2012. As shown on Slide 3, revenues were $452.2 million, up 5% quarter-over-quarter and 25% over the same quarter last year. Adjusted EBITDA was $215.2 million for the quarter, up 29% over the same quarter last year. We continue to see growth through high-value deployments where application performance and reliability matter, resulting in record bookings in all 3 operating regions this quarter. Our focus on creating digital ecosystems and the corresponding vertical alignment of our sales force is reflected in our market momentum, particularly in the network and cloud segments. By targeting customer applications that fully leverage the advantage of Platform Equinix, we continue to see a very favorable deal mix and a healthy pricing environment. The breadth of our global platform remains a unique competitive advantage. In this quarter, we exported record bookings across regional boundaries. Currently, 59% of our monthly recurring revenues come from customers deployed across multiple countries, reinforcing the value of our global platform. As the Internet continues to scale, the global data center market remains as dynamic as ever. Trends such as mobility, cloud computing, data management and social media are at the heart of this shift. There are more people interacting with data than ever before, and the world's effective capacity to exchange information through telecommunications network is predicted to reach approximately 670 exabyte annually in 2013. These global trends are forcing architecture decisions to place network data centers at the heart of multitiered architecture deployments. Our network-dense IBX stood at the intersection of these business and technology trends as a solution to both cost and performance challenges. As we continue to…

Thanks, Steve. And good afternoon to everyone on the call today. I'm pleased to provide you with additional details on our first quarter results and with the exception of the consolidated financial results, all other key metrics exclude the impact of ALOG. So starting on Slide 4 from our presentation posted today. Our Q1 financial results were better than expectations in each of the 3 regions with particular strength in the Americas. Global Q1 revenues were $452.2 million, a 5% quarter-over-quarter increase and up 25% over the same quarter last year. This healthy increase was in part due to a $2.8 million early termination fee negotiated with a customer in the U.K. Our quarterly revenues were slightly impacted by the negative currency trends in the quarter, reducing revenues by $500,000 when compared to the average rates used in Q4 or $600,000 when compared to the FX rates from our guidance. Our pricing across each of the regions remained firm both on an MRR per cabinet basis and on a unit pricing basis. Global MRR churn was approximately 2.4%, a slight increase over the prior quarter yet within our targeted range of 1.5% to 2.5% per quarter. This quarter's churn reflects the renewed focus on IBX optimization as we work to maximize our return on invested capital across our asset base. The U.K. churn previously noted is a great example of our IBX optimization effort: a customer's picking us to downsize their footprint of unused space. Consistent with our strategy, we've already resold a portion of the space at higher prices to support the deployment of a large U.S. bank's critical trading platform. This is what we consider to be positive churn. The benefits of this strategy are clear to us. It will improve our pricing and margins. We will recapture…

Thanks, Keith. Now I'd like to provide a deeper view into our Asia Pacific region and then close out with an update of our 2012 guidance. Asia Pacific is the fastest-growing region for Equinix and an area of tremendous potential for us. Emerging market customers are growing in importance, while multinationals continue to invest in this region because of its growing economy, economic stability and strong foreign reserves and they're accelerating their deployment of Internet infrastructure to support their products and services. If you turn to Slide 12, you can see that over the last 4 years, revenues have grown at a 39% compounded annual growth rate. EBITDA margin has improved from 29% in 2007 to 46% in 2011, and interconnection has grown to become a meaningful component of the recurring revenue. Platform Equinix is the only premium brand with a Pan-Asian offering, and multinationals such as IBM, Fujitsu, British Telecom and many others are expanding into the Asia Pacific markets as shown on Slide 13. Over 30% of the top 500 global companies are headquartered in Asia, and as the economy develops, we will work to bring these Asia-based multinationals to the other regions that we serve. Turning to Slide 14. Each of our 5 markets has unique market dynamics. In Singapore, telecom deregulation and government initiatives have established this market as the business and telecom hub of Asia Pacific, creating a tremendous opportunity for telecommunications firms. Our Singapore market is a well-known peering hub that has grown to over 170 networks, with the largest number of cross-connects in Asia Pacific. Recently, Amazon Web services deployed their direct connect offering in our Singapore data center to capture the growing demand in this market for private and hybrid cloud services. AWS Direct Connect is also deployed in Tokyo, another market…

[Operator Instructions] Our first question comes from Michael Rollins with Citi.

Two questions, actually. First, with respect to the sales force, can you give us an update to the quota-bearing salespeople at the end of the quarter versus the end of last year and describe how those incremental salespeople are contributing to the bookings environment, or is it sort of half a contribution or full contribution and how to think about that pacing? And then separately, if I can just follow up, you mentioned the process of hiring advisers to consider the whole REIT structure. As part of that, is the management team and board going through a deeper strategic review? And if so, are there a range of topics that you could describe to us that you guys are considering as you go through that?

Sure, Mike, I'll start out and take the first one on the sales force and maybe Charles can supplement with the biggest region activity in the U.S. But just to size it for you, we're just under a couple hundred sales reps around the world, call it 100 in Americas, 55 or so in Europe and then around 27, 28 in Asia. So that's the quota-carrying sales force. And in general, the productivity per rep is up across the region. So certainly, we're measuring it both on the tenured reps and the untenured reps, but it is definitely moving up into the right, and is moving in the right direction. At the same time, we're adding complexity to what we're selling with the partnerships, et cetera, and we're arming the sales force to go to the market vertically. So they're learning how to speak in an industry vertical, and so that's all part of the mix. But we're very happy with where it's progressing. And Charles, maybe a comment on certain U.S....

Yes, Mike, I think obviously given the strong bookings performance in the quarter, we feel very good about the continued evolution of the sales team. As Steve said, we're seeing strong up into the right trend and rep productivity and saw healthy increases in productivity, both on tenured and new reps in Q1. Based on the success of our network and financial services sales teams, we actually made the decision to fully vertically align the Americas team, and we believe that will continue to drive productivity throughout 2012. Overall pipeline is solid, coverage is good. And to answer your question directly, the new reps are not yet fully productive. As we said, we are ramping them to productivity. But again, I think we should continue to see on a pro rep basis increased productivity as we continue to mature the reps through their learning process. But overall, we're very pleased with the progress.

Great. And Mike, on the second question, actually it's a great question. I think how we'd like to frame it today is first and foremost, it is to look at our global tax strategy. And sort of as attached to my comments, my prepared remarks, it's really about also making sure that we focus on growth. And I think in tandem, those are the 2 most important things to take away from today. Having said all of that, the first step really is to think about the feasibility of the REIT structure. Can we do it? And then of course then you'd also think if you can do it, should we do it and ultimately, how do you execute against it? And clearly, the execution part, which as part of this process, our core senior management and the board will be very active in. But right now, let me just say we're in the feasibility side of the review.

Our next question comes from Scott Goldman of Goldman Sachs.

Just a couple. First, Keith, maybe you could talk a little bit about the revenue growth as you think about it exiting 2012. I was just looking through the numbers and what you have for 2Q guidance. You're going to be growing the first half of the year slightly over 20%, yet the back half guidance using full year numbers would imply probably 14%, 15% revenue growth. So just sort of wondering how you think about revenue growth as you exit 2012. And then secondly, maybe you could talk a little bit about capital spend, and you've announced a number of expansions since even the last call and a couple more today on your tracking sheet. So maybe you could talk to us a little bit about what the -- how much remains unallocated, if anything, on the original CapEx guidance that you put out?

Okay. Great questions, Scott. Let me first start in sort of, if you will, normalized Q1, because I think it's important to understand what it ultimately is. And if you actually step back, Q1, taking out the one-offs, is roughly $448.5 million. So that's the first thing to start with. When you then go to the guidance we deliver, it was $467 million at midpoint. If you add the $3 million in currency, you're roughly at $470 million. When you look at $470 million relative to $448 million, you're growing your revenues quarter-over-quarter about almost just under 5%, 4.8%. I believe that those are the guidance rates. As we continue to move through the year, we expect to continue to scale the business. The guidance that we're delivering today is a greater than, as we have always said, we like to give you the greater than and it gives us a little bit more flexibility. But suffice it to say, as you get to the back end of the year, we're going to exit with a relatively large number when you think about the guidance that we've delivered. But more importantly, the second half of the year has more currency embedded in it. As Steve said, there's $9 million of currency, which can be quite dilutive to the business and the exit rates. So principally said, we feel good about the direction we're going. We think Q2 is a good number to anchor off of as we continue to run the business and scale and, as Charles alluded to, drive the reps to a broader productivity, we think that we can continue to grow at a healthy rate. When it comes to the CapEx side of the equation, the nice thing is what we said last year was we deployed in the second half last year and we're holding true to this year. We really wanted to give you our best thoughts on what guidance would be. I recognize it's a relatively large range at $700 million to $800 million, but that guidance contemplated of course some of the projects that we've announced. So we're not modifying our guidance right now. We feel very good about the midrange of that guidance, and as we continue to review projects, we'll adjust accordingly. But at this point, at this stage of the game, we feel very good about the annual guidance that we're delivering.

Just a follow-up to that. I mean, do you think that if you were to go out and announce any further expansions that could see some capacity come on in late '12 or 2013 that, that could necessitate having to increase that guidance? Or do you feel as though there may still be some capacity in there if you're thinking about the midpoint right now?

Certainly, we have a little bit more capacity if we so chose to utilize it. Suffice to say, it's unlikely, unless it's a relatively small project, that you could construct something and bring it online this year at this stage. It's not to say that -- there's certainly all the small projects under -- smaller than the 400 cabinets that we put on the expansion track which overall was working. Charles is going through an extensive exercise as he looks at his asset pool and decides where can he optimize, where can he augment, where can he recapture. And sometimes that requires us making some small discrete investment in CapEx, but that's all contemplated in the numbers we've given you. And so I feel very good, again, about the guidance we've delivered. At this point, I would tell you I can't see going above the top end of the range, and right now we feel very comfortable at the midpoint of the range.

Our next question comes from Frank Louthan of Raymond James. Frank G. Louthan - Raymond James & Associates, Inc., Research Division: Looking at the project there for the -- I'm seeing the underutilized space, expecting churn to be up a little bit, how long would it take to complete that exercise? And then what's sort of the revenue opportunity here if you see similar success from the first quarter? And then second question, sort of what's more the long-term outlook for the exposure you want in China? Are you going to stay with Hong Kong and Shanghai for a while, or should we look for expansion into other Chinese markets as well?

Good questions. Let me take the first part of the churn, and I'm going to pass it to Charles who will give you a more sort of regional view of what's going on. But I think when you think about the churn in and of itself, to the extent that we recapture churn like we talked about in the U.K., and then there are other examples, last year, where we recaptured space in Frankfurt and Munich from a large content company where basically there was a lot of revenue churn, per se, that had no impact to our margins, it was actually those value -- or margin-eroding. And so by replacing that capacity, it allowed us to see our profitability go up. [indiscernible] is no different in this circumstance and the U.K. instances where the customer was not fully utilizing the space and is in one of our critical assets, as I said, London is one of the ones out in style, and we are able to recapture some of that space from the customer and allowed them to reduce the burden and give us the payment to offset some of that contracts for commitment. And then we turned around and sold it to a U.S. [indiscernible] firm and they're going to put their -- sort of their trading platform inside that asset. Again, it's highly focused on going out to the right ecosystem. And we like to think, and you've heard me say before probably, it's the right customer going in the right IBX with the right application. And if we continue to do that, we're willing to tolerate higher churn from that perspective, recognizing that we got to backfill it with more valuable customers. And so let me just pass it to Charles at this point.

Keith, I think you covered a lot of the key points. I mean churn has been a significant area of focus for us for the past 18 months or so. We're very pleased with the progress. As Keith said, as I've often said to folks out there on the road, the best long-term way to mitigate churn is to ensure that we put the right customers with the right applications and the right assets. And I believe our targeting and our deal discipline to do that are now firmly in place. And we have churn of various types and all those create some level of revenue headwinds. But frankly, I think our level of bad -- what we would consider to be bad churn is very manageable and well inside of our targeted ranges. And on the good churn side, there is churn that we embrace and candidly often catalyze as part of a very disciplined renewal process and part of moving customers to multitiered architectures. And when we do that, we think we dramatically improve the overall productivity of our assets. And so that's one lever, and then we have a number of others. I think in your question you asked kind of how long that would continue. I think we have continued opportunities to optimize our assets. We see an imbalance between space utilization and power utilization in some of our key assets. We're investing in space projects where we can to sup up some of that at very high IRRs. And we're continuing to work on that. I think if you look at Slide 11 of the deck, you'll see that our ability to continue to squeeze better performance out of our mature assets continues to be there.

And Frank, on your second question on China, as I mentioned in my prepared remarks, we are currently evaluating opportunity to expand our presence in Shanghai and, ultimately, we'd be interested in Beijing and possibly even other provinces over time. But Shanghai, probably to get started, would be of high interest because we've tested that market with a partner in that market that's been a very good partner and we've done very well there. On the small footprint, but we've done very well. But as I stated, the demand for our customers that want to go international, particularly in Asia Pacific, is very, very high in Shanghai. Our brand, our reliability reputation is very strong in China. We have plenty of opportunities. And I guess I would just tell you to stay tuned.

Our next call comes from James Breen with William Blair. James D. Breen - William Blair & Company L.L.C., Research Division: Just 2 questions. One, with respect to CapEx, as you look at the breakdown that you provided in the slides, it seems like CapEx is moving up in the U.S. and down in EMEA and Asia. Can you just sort of give us color in terms of what your thoughts are there? And you also -- you make note that the continuing sort of maintenance CapEx levels are around 7% coming down to 5%. Do those differ considerably across the different regions right now given the different growth stages the regions are in? And then secondly, just on Asia Pacific, you mentioned that 12% of MRR are cross-connects now. Do you see that going to that 20% level that you're in, in the U.S., and will that help drive profitability in that region?

Just filling in with I guess the first part of the question on spend. Clearly, they're point specific. It depends on the markets. We're always looking at the opportunity that's in front of us, and we spend a lot of energy as a company looking at our bill rates. And so sometimes, one region will be more heavily weighted than another region, no different last year, when you looked at Asia Pacific, we spent more than 100% of revenues on our growth or our capital expansion initiatives. This year, we didn't have to make the same level of investment, although we're continuing to invest quite heavily as a percent of revenue for the Asia Pacific market. Europe, there's a lot of spend that took place last year, and we're continuing to invest this year. But when you think about the opportunity, there are facts and circumstances specific based on the fill rate and the opportunity that we have in that given market. And so I don't get overly concerned about, if you will, percentages at any point in time because we continue to look at each of our assets. And as Charles alluded to and as we as an organization are focusing on, we're just trying to maximize that opportunity that's in front of us. So hopefully, that addresses your question vis-a-vis the regional breakdown.

And I think on your second question, James, in Asia Pacific, we don't have a stated goal that's in that range. Today it operates, in this quarter was 12% of monthly recurring revenue versus 20% in the Americas and 4% in Europe. The worldwide percentage as a percent of recurring revenue is around 15%. So that's -- I mean we obviously are focused on interconnected ecosystems, so we're trying to drive that number up. The Asia Pacific team has made tremendous progress over the last 3, 4 years in doing that. But the specific answer to your question is we'd love to see it go to 20%, but that's not a stated goal for the company, but it will continue to move up. We're absolutely focused on it.

And James, if I could just add one other thing to Steve's comment. I think it's also important to recognize that, certainly, we like to think that interconnection revenue as a percentage of revenue will go up, but you have to also recognize there's a tremendous benefit to the pull-through that hit the other lines. And so some markets and some regions have a different pricing structure than we have in the U.S. And so from our perspective, as long as we can continue to get that right customer with the right asset inside our data centers, they're going to be willing to pay an appropriate amount for that capacity, and that overall will drive the right returns on an overall basis. So again, it's an important metric, but you shouldn't look at it just on a one-sided basis because there's real benefits on the other lines as well.

Our next question comes from Gray Powell with Wells Fargo.

Just had a couple of quick ones. Can you give us a sense as to the growth rate in each of your key verticals, those being like IT and cloud, financial services, network and enterprise? And then can you talk about initiatives to improve momentum in your enterprise verticals? It just seems like with the growth that you're having in your cloud ecosystem, that there could be some sort of a pull-through there with enterprise customers.

Sure, Gray. I'll start and then Charles can probably add some to that because we really are digging deep into enabling enterprises to take advantage of the cloud. But on the growth rate, if I can give you just color of the bookings this quarter, it will give you a sense of how they sell. Roughly 26% of the bookings in the first quarter were tied to networks. We're seeing great, great focus in growth with the networks with Ethernet and LTE and all the new services that are rolling out. So they're upgrading and we're benefiting from that. About 22% of the bookings was from cloud, so we continue to see very good upside and deployments of public, private and hybrid cloud nodes. Financial was roughly 18%, and that was a little bit lower than what that is as a percentage of revenue, but we have a very strong pipeline as we look to the end of the year. So that's very cyclical. Content, digital media companies were roughly 24%, and I would say that the color underneath that is tied to the big global platform players who are deploying cloud-like nodes and infrastructure all over the world and we're benefiting from that. And then enterprise is roughly 10% of bookings in the first quarter. But we're very focused on enterprise. Most of the historic go-to-market for us has been with network, cloud, financial and content digital media. We haven't really focused on enterprise, per se, except for a little bit in Europe and in some markets. But we are staring at it pretty hard now. We're seeing some good positive signs in health care. We're seeing some good positive signs in business and professional services. And I don't know, Charles, you can probably give a little more color on that.

Yes. I can give a little more color on Steve's comments and then particularly address the enterprise question and the pull-through to the cloud. The bookings can be a little bit deceptive at times. But I'd tell you just right now, I think in the business we're seeing real strength in the network space just to continue the network density, and the platform that we've built continues to have momentum. Real momentum in cloud as well, and in some of the other areas it can be a little lumpier. But cloud is certainly an area of strength right now. And as you noted, I think that has a very strong potential to proceed strength in the enterprise, meaning we talk a lot about the cloud-enabled enterprise as a specific area where we're seeing demand for Platform Equinix and particularly on a global basis. And I think that that's going to continue to be the case as virtually every enterprise CIO is right now tackling what cloud -- what are we doing to really leverage the cloud, looking at public, private, hybrid cloud architectures, and Equinix is really the home for that.

And next, we have Colby Synesael with Cowen.

First question, I just wanted to talk about the partnerships. I'm curious how you're going to be balancing out the best-of-breed strategy versus staying neutral. So for example, when you start to partner with an AWS or a Rackspace for that matter, what's the risk that you're actually going to be pushing away other companies that actually compete against those guys and may feel that you're now perhaps more aligning yourself with them? And also, is the value of these partnerships really just that it's making your facilities more sticky, or is there an actual revenue opportunity tied to some of these partnerships? And then I have a follow-up after that.

Sure, Colby, I'll start. Most of the activity Charles is driving in the Americas were emanating their partnerships out of mostly U.S.-based relationships that end up going global. But generally, the way we're thinking about partnerships is we're just trying to make it easier for our customers to do business inside of our IBXs. So as I've mentioned and Keith mentioned multiple times, we're creating this marketplace inside these IBXs so that customers can see each other. We've made that much easier with a tool. We're taking that to the next level now where we can help them enable solutions. Many of these customers are coming to us and asking us to sell with them, co-develop with them, bring best-of-breed type of solutions to customers. So we're framing all that now. There is some revenue share opportunity. So there's been a handful of announcements that you all have seen that we've made, mostly generated out of the U.S., that will port to international. And then again, it's to facilitate ease of doing business and connecting buyers and sellers inside of our marketplace. Maybe a little more color there?

Yes. Steve, I think you covered most of it. Again, one thing I think you guys clearly understand, Platform Equinix at its heart is inherently a digital marketplace. And we've invested heavily in our marketplace capability and improving ability for our customers to gain business value from their participation in our vertical ecosystems. And the partner program really just builds on that foundation. And in certain of our verticals, particularly in enterprise, we see the need for our sales teams to position Platform Equinix as part of a bundled solution that is more directly responsive to the customer needs. And as Steve indicated, really, an ease of doing business with Equinix. And to answer your question, since we're not looking to move up to stack ourselves, partners are a key avenue for us, and we're all about providing choice. So we do not view it as contrary to our position, inherent position and neutrality, but rather providing a complete choice set for our customers. So we are eager to have the full range of service providers in our facilities that customers may want. And we're going to work with best-of-breed players that have value to deliver to our customers. And then to also directly answer your other question in terms of the economic model, it is primarily about ensuring that Platform Equinix gets pulled through by being placed into a relevant business context for our customers. That's the primary economic model. In certain cases where that's less clear, we may employ other economic models in the arrangements, but primarily it's about creating the pull-through and creating a stickiness for the solution long term.

Okay. And then just a real quick follow-up. Keith, there's been talk from quarter-to-quarter about some customers being below market and effectively getting them to move up to market prices, or actually pushing them out in churn and then going in reselling that space. Is there still a decent amount of situations like we saw in Frankfurt where you actually will have that opportunity to push customers out if they're not willing to move up to market prices and therefore see a nice immediate improvement, call it over a quarter or 2, just when you resell that space in terms of both revenue and margins, or is that largely behind us at this point?

Well there's certainly a lot of opportunities out there. It's not always about below market. In some cases, it's about underutilizing the capacity. And again, I refer back to the U.K. example where the customer may have taken down too much capacity. We wanted some of the capacity back. That was a perfect arrangement between the 2 parties that was mutually beneficial. We got some one-off benefit out of it, but we also got the capacity back to sell a higher-value customer. And it goes very much to what Charles has been talking about in his business and how the other 2 regions feel. It's about creating an environment where it becomes more sticky, more interconnection rich, and that there's more value that's created from that incremental deployment. And so I think there's...

Can you tell us what the delta is between actual utilized space that we see in the numbers and metrics that you provide versus actually being used by the customer?

We don't have that data, Colby. But suffice it to say, there's the opportunities out there. We made reference to it. Clearly, there's more opportunity in front of us as we continue to look at our assets and how to optimize them. We want to continue to make some enhancements where appropriate to recapture space and bringing balance, more power, power with the space availability, and we're going to continue to do that. We will continue to update you as each quarter goes by. But suffice it to say, we feel very good about what we have in front of us. Obviously, the guidance that you see that we placed for Q2 and beyond, that gives us a very good sense that we can continue to scale the business, we can absorb a little bit more churn than we originally had forecasted. It's good for the business and it's good for the investor.

And Colby, managed churn is not our only avenue available to us in that regard. As we said, being able to consume underutilized power, for example, in facilities, being able to free up space and marry it with power to get additional inventory at very low CapEx rates, there's a number of levers available to us to continue to improve the productivity of the assets beyond just the managed churn opportunity.

Our next question comes from Jonathan Schildkraut with Evercore.

One housekeeping question and then a couple of strategics, if I may. Keith, I was wondering if you might update us on the RP basket?

Yes, I certainly can do that. So the RP basket at the end of Q1, we're estimating to be roughly $150 million under the 8.125% facility and is roughly $500 million under the 7% facility. So it gives you a sense. So we'll consume roughly $100 million of the basket and through Q1, we're roughly $252 million of total capacity.

Great. All right. So 2 questions here on the strategic side. You now have DC 10 opened up for a little while, and Equinix seems to be well situated for really an evolution in the way that customers are using data center space. And Charles, you've said a couple of times private, public, hybrid cloud. And so it's been our perspective that this is going to be a very important paradigm shift over time. So I was wondering if you might give us a little bit more color about what's going on in the data center, if there are kind of hybrid, private, public cloud, if it's being integrated with Amazon Web Services? I'd love to learn a little bit more about how that data center is evolving. And the second strategic question just has a little bit more to do with the M&A environment. Clearly, there are a number of assets that are currently available, some domestically in Canada, Germany, globally. You guys have done a great job of being able to really leverage your global footprint in order to drive demand from one region to another. Are you looking at the M&A environment as a way to complement your current assets and growth?

Jon, this is Charles. I'll take the first part on DC 10 and hand it back over to Steve or Keith on the M&A side. But we concur that there is a shift going on in terms of how people are thinking about utilizing data center infrastructure, and the DC 10 asset was part of trying to exploit that. And we talk a lot about multitiered architectures, and those multitiered architectures do play into the sort of public, private, hybrid cloud environment. And to directly answer your question, absolutely, there are people that are actively providing sort of cloud services and public, private, hybrid cloud services out of DC 10, and most often, integrating those with a footprint in the core Ashburn IBX facility, which is obviously very heavily interconnected and taking advantage of the network density that lives there. And it is, in fact, aligned with AWS and being able to gain access to the public cloud. And then move loads and using partners, for example, like RightScale, to move loads across public cloud options and then use the connectivity that's inherent in the Ashburn facility, whether that be Ethernet or other methods of connectivity to create private cloud. So that's all playing together. DC 10 is a very targeted asset for us. We're not trying to be all things to all people, but it is, in fact, a way for us to really allow that multitiered architecture to take place for our customers.

And Jon, I think on the M&A question, probably the simplest way to think about Equinix going forward, at least in the short term, short to mid term, is that it will facilitate new market entry for us, particularly in the emerging markets where current customers are showing signs of interest. It was behind the Brazil decision, it certainly was behind our decision a couple of years ago to get into Amsterdam. If we can find a partner or an asset that's building the newest data center in that market, that's always attractive to us. But as Keith and I and Charles has probably voiced sort of a little bit on the road is China, India, Middle East, Eastern Europe, all these places are still of interest. It's all driven by customer demand, market data that suggests that this business model would do very well with first mover status. Some of these bigger markets now are starting to show signs that -- and we're being attracted by people in those markets to find a way in there. So it mostly aimed on bolt-on type decisions versus any big scale decisions. We feel like we're in very good shape in the Americas. In Europe, we're quickly becoming -- we're investing more than the prime competitors there, and we're very happy with where we are in Europe. And in Asia, there's lots of opportunity as we talked about today.

Great. And I know that you have the Analyst Day coming up in June. It'd be super to here maybe from one of those customers in DC 10 who's really taken advantage of that hybrid architecture.

Our final question comes from David Barden of Bank of America.

A couple of quick ones as we wrap it up, if I could. Just the bigger picture question, maybe, Steve. Obviously we're seeing the mid of the integration happen now between the Verizons and the Terremarks and the CenturyLinks and the Savvises. It's not clear that they're necessarily outperforming their historical run rate. If you could talk a little bit about if you've got any advantage on the competitive landscape at the margin, that would be great. And then just 2 quickies. Keith, on buyback, could you talk a little bit about the pacing slowdown? You had the headroom in the quarter on the RP basket but you didn't use it. If you could talk a little bit about pacing. And then lastly, just to wrap it up, on going back to where we started, Keith, on the adviser and what you hired them to do. Is part of this process getting an IRS private letter ruling? Is there a plan to -- is part of the feasibility study the need to kind of get the IRS's input in this process?

I'll go ahead and start on the competition question, David. I think it's still playing itself out. Both of those examples you quoted are both customers of Equinix, continue to be customers of Equinix or continue to grow in our pipelines. For example, the Boca Raton asset that we just announced today is a pretty well-positioned asset as an alternative to the South American market. But generally, they're in our pipeline as customers. We also see them competitively, predominantly in the U.S. So I don't -- we haven't seen a big change in the landscape. I think it's still shaking out in terms of the integration offer and how those companies are operationalizing these things. But no big new news, I don't think. Charles, have you seen anything?

No. Again, I think that in many respects, there are complementary ways that we are working together in the marketplace. There are areas of some potential overlap, and I think there is concern on the part of customers about whether or not their new ownership implies a change in their posture relative to network neutrality. And so that [indiscernible] margin perhaps provide us an avenue to have a discussion with the customer about Equinix as their preferred choice. But I wouldn't say that there has been any dramatic shift either way in the market.

And David, just on the other 2 questions. First, taking the question on the sort of the RP basket capacity. As you think about how we're looking at our priority, first and foremost, it's going to be about profitable growth. We're going to continue to invest in the things that are available to us. And secondly, we're going to focus on those bolt-on acquisitions that Steve referred to, and clearly, that's going to be an important aspect to us. We have said historically that we want to do things on an equity light basis, avoid equity as much as we can. And so to the extent that we do acquisitions, we really would like to be using cash to create value for the shareholder. And then thirdly, obviously, is going to be focusing on continued shareholder return. And so we're going to continue to evaluate on an ongoing basis and it continues to remain a focus for us. So switching gears to your question on the private letter ruling, like anything, first and foremost it is about feasibility. Private letter rulings, I think that would be more at the back end of the assessment, the advisers are on a lot of -- on many complex issues, and it's probably a little early to talk about private letter rulings.

That concludes our Q1 call. Thank you for joining us.