Good afternoon and welcome to the Equinix Conference Call. All lines will be able to listen-only until we open for questions. Today's conference is being recorded. If anyone has any objections, you may disconnect at this time. I'd now like to turn the call over to Katrina Rymill, Vice President of Investor Relations. Thank you. You may begin.

Thank you. Good afternoon, and welcome to today's conference call. Before we get started, I'd like to remind everyone that some of the statements 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 28, 2014, and Form 10-Q filed on November 7, 2014. 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 explicit public disclosure. In addition, we'll 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's 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; and Charles Meyers, Chief Operating Officer. Following our prepared remarks, we'll be taking questions from sell-side analysts. In the interest of wrapping this call up in an hour, we'd like to ask you, the analysts, to limit any follow-on questions to just one. At this time, I'll turn the call over to Steve. Stephen M. Smith - President, Chief Executive Officer & Director: Thank you, Katrina.…

Great. Thanks, Steve. And good afternoon to everyone. To start, I'd like to first review some of our 2014 highlights, and then I'll turn to our fourth quarter performance. We reported revenues of $2.44 billion representing an almost 14% year-over-year growth rate. All three regions delivered better than expectations, with EMEA and Asia-Pacific show reported growth of 21% and 19% respectively, while the Americas region produced greater than expected growth of 9% on its much larger base. We continue to balance margin expectations with the reinvestment in the business to drive our future growth. Our gross profit margin was 51% and our adjusted EBITDA margin was 46% after taking into consideration significant investment and expansion activities across the regions, as well as directing approximately $30 million in operating expenses to fund new product innovations, such as Cloud Exchange and Performance Hub. Also in 2014, we continued to scale our go-to-market efforts to better position ourselves to attract the enterprise customer. Despite these investments, our margins remain stable and we continue to target a longer-term objective of achieving 50% adjusted EBITDA margins or better. We continue to focus on the balance sheet and finding ways to optimize our capital structure. During the fourth quarter, we refreshed our debt structure and secured $2.75 billion of new financings. This puts us in a great position to fund both our existing and new initiatives, invest in the development pipeline, and fund our quarterly dividend. So, let me now turn to slide four. As I'd like to highlight how we allocated the resources in 2014. First, we generated approximately $709 million in adjusted cash from operations, and then reinvested $660 million of this cash into development and other projects that have consistently high levels of return, including our newly opened Melbourne and Singapore IBXs. We…

Thank you. We'll now open for questions. Our first question comes from David Barden with Bank of America. Your line is open.

Hey, guys. Thanks for taking the questions. I guess, if I could just three quick ones, first, Keith, could you talk about the difference in the rate of I guess taxable income or AFFO growth whichever one you think is more relevant for the QRS and the TRS, so that we can understand what the growth possibilities for the dividend are as they're propelled by the results of the QRS itself. I guess the second question is for you, Steve, which would be could you kind of elaborate on your appetite for a large scale consolidating European transaction and if so give us details on that? And then the third question I guess is the obvious one which is – a year ago we heard that the PLR was coming in 2014, now we're hearing in 2015 – that it's coming in 2015. The question I get 10 times more often than any other fundamental question is, what possible reason could there be that you don't have it already, you've paid a lot of people a lot of money to help you in this process, they must be telling you something, could you please tell us what it is? Thanks.

Okay, well, I will start first and foremost with the – sort of the AFFO and really talk a little bit about the REIT structure, and just having it from the – in the prepared remarks, and you think about the QRS, it has majority, it has the American business, which is as you know, as I reported, our slowest growing business albeit on a very large base. So, our European business on a currency adjusted basis is our second fastest-growing and then the Japanese business those are all sitting in the queue. What's not sitting in the queue is the rest of our Asian business, and no surprise to you that is Hong Kong, that's Australia, that's Singapore. And so, when you look at – sorry, and there is Canada and Brazil. Brazil, because it's a managed services business, you can appreciate it. It doesn't have the revenue type that's fully suitable for REIT, and so think of Brazil as staying inside the T on a continuous basis. For the remaining assets, you can get a good sense, if you think about Singapore, you think about Australia, you think about us opening up our Toronto 2 asset in Canada. You're going to have a lot of growth still coming from inside the T. And, over time, the reason that we – the reason that we're structured today as is we're trying to do it tax efficiently, but we also have to meet the REIT compliance test in 2015 with it being a conversion year, we have to be very thoughtful about what assets you move in over what period of time. All that is to say, when you look at the Q, or you look at the T, these both have very good growth potential. And, over time, not…

All right, guys. Thank you very much.

Our next question comes from Jonathan Schildkraut from Evercore. Your line is open.

Hi. Thanks for taking the questions. I guess, I'd like to ask a question about the investment into the professional services organization, maybe two elements to that. One, could you give us an example of the advice, the problem solution that you're providing to your customers through that organization? And then secondly as we think about that business becoming more important to Equinix over time, are there any margin implications that we should be considering? Thanks.

Hey, Jonathan, it's Charles. I'll take that one. I think that – a couple things. Again, what we're seeing is our investment in pro serv is really a response to what we're seeing from our enterprise customers in terms of what they need to implement hybrid cloud effectively. And what we're finding is, is that they're at a stage where they are still examining how hybrid cloud fits, how they can implement it, which workloads they would want to consider moving into a hybrid cloud environment, which ones they may want to keep in a more traditional colocation setting, what workloads lend themselves well to a public cloud, interconnect, and then how to implement that over time, particularly in a highly distributed fashion globally for larger players. So that's the type of advice that they are looking for before they make commitments and execute plans on hybrid cloud implementation. And Nimbo was already actively engaged with customers of ours and with partners of ours like Microsoft in those types of discussions. And so we're very excited about the opportunity and in fact have gotten a ton of positive feedback from partners like Microsoft and existing customers about that capability. And so that's the essence of what they're doing and again it's early days. But we continue to be really optimistic about what that means for us and for our customers, as they look to implement hybrid cloud. In terms of our desire, I would say that the overall scale of the business is a couple things. We are – our objective here is not to grow a professional services firm for the purpose of growing our top-line, it is really to draw pull through and demand for Platform Equinix over time as a hybrid cloud enablement platform. And so we are going to do that kind of business and we'll do it at reasonable margins. They will certainly be lower than our services business, but the overall scale of the business will be relatively immaterial and not have a significant impact on the overall margin structure.

All right. Thank you for taking the questions.

Sure.

Our next question comes from Michael Rollins with Citi. Your line is open.

Hi, good afternoon. Thanks for taking the question. First question I had was, if you could just share with us what the sequential currency headwind was in the fourth quarter from the average rate in the third quarter?

Yeah, the – so on a total basis, Michael, it's – the net exposure is $8.5 million on the top-line. Having said that, the currency hedges themselves offset a fairly meaty piece of that exposure, but overall, it's a net hit of $8.5 million.

And, just secondly when you look at the flow through to revenue in the quarter, on a sequential base if you add back some currencies above the average of the last few quarters, would you say that this is a result of the stronger bookings and sales activity or is it some of the book-to-bill that you highlighted in the past catching up?

Michael, really it's a combination of all three things. I'd tell you, it's not only the fact that we're pushing more volume into the system, and as Steve alluded to, we had record gross and net bookings this quarter, effectively Americas second best quarter ever, and the other two regions, their best ever. If you combine that with churn being lower than our expectation, that's a great output to our revenue line, number one. And number two, the book-to-bill interval, so certainly there're some of that that bleeds into the results. And then the last piece, which is something that we've spent a little bit more energy on this year, relative to last year. We actually do more nonrecurring activities as well. I would tell you, as we look in this quarter, it's roughly just over – NRR is roughly 5% of our revenues, but relative to where we'd come from we do a little bit more, and so for those three reasons alone you see a nice step up in our activity.

And one last question if I could. You're carrying a balance of cash, I think, you referenced it a little over $1.1 billion in the fourth quarter.

Yeah.

If you take the average interest rate, multiply that against the $1.1 billion, if I'm calculating this correctly, it's almost $1 per share of pre-tax interest. How should we think about what kind of cash balance you're going to carry going forward and how to think about the cost of that cash balance? Thanks.

Yeah. It's a very good question. I think look, certainly, we went to the markets opportunistically at the end of November, or sorry in November. And we did that for a couple reasons. One, we felt it was a good time to go and refinance, we wanted to take out our 7% senior notes, we wanted to put a new term line in place. We also wanted to have a revolving line of credit. And that $1.5 billion facility between the term-loan and the line of credit is very, very cheap money for us, it's up 2%. If you think about the high yield that we did on a blended basis between 7% and 10%, it's a 5.52% cost of capital. All of that to say, as I said in my comments, our cost of funds today on a blended basis for all of our financings is 4.93%. So that's the first thing. The second thing I want to leave you with is the $1.1 million, as I said, we opportunistically went to market in November. It is not our expectation that we're going to carry that level of cash on a go-forward basis. And, suffice it to say when you think about the capital investment that we're going to be making this year and you add to that basically the dividends that we're going to be disbursing, plus perhaps some asset acquisitions, some land or some buildings, all of a sudden you can get a pretty good sense of what we're going to consume a fairly meaty piece of that $1.1 billion. And, therefore, as you roll forward in time beyond 2015, I would expect that you would see us either continue to consume cash from the balance sheet, as we generate it, but also go into our revolving line of credit. And then, as times permit we go back to the market and raise more debt to fund the future growth. And so, that's how we're sort of seeing it. I would tell you I don't think that you're going to see a lot of cash left on our balance sheet on a regular basis given the fact that we've now converted to a REIT.

Thanks very much.

Our next question comes from Colby Synesael with Cowen and Company. Your line is open.

Great. Thank you. You mentioned in your prepared remarks that you're seeing an uptick in larger footprint deals and I wanted to know how are you able to potentially dynamically adjust your own offer or investment in your facilities to continue to get what you would deem the proper return. And then the second question is, I noticed in your AFFO calculation, you changed how you account for installation of revenue adjustment, and I was wondering why you may have done that and is the AFFO formula you have out there now something we should consider to be the finalized version. And then just one point of clarification, you mentioned for example in the first quarter that you're observing $19 million in FX headwinds. How much of that is actually being covered by the hedge itself?

Thanks. Hey, Colby, this is Charles. I will take the first piece around large footprint, and then let Keith handle the other ones. As we've said consistently over the years our ecosystem centric strategy is very focused on putting the right customers with the right applications into the right assets and that really continues to be the case. But undoubtedly as we did comment in the script we're seeing an uptick in the requirements around the large footprint, particularly for cloud service providers who are looking to rapidly scale their business on a global basis. And that's – again we been – we've sort of always had that posture of, hey, there are large footprint deals that we believe are accretive to the overall ecosystem story that we will pursue and that we believe can sort of because of their ecosystem power, sort of support the right kind of long-term blended returns. And we are seeing those and winning that type of business and in terms of how we accommodate it, I think that and I would say in Asia and Europe we have typically sort of managed our facilities as some are blended facilities anyway with a combination of sort of small, medium, and large footprint deals going into those facilities. In U.S. it has been a little different. In that, there are specific assets where we are in a better position to accommodate large footprint at the right kind of price points with the right dynamics for customers. And we continue to have that capacity available to us and so we're looking at selectively putting those into – in the markets around the world and we are also looking to expand our capabilities and looking at our investment portfolio and plan to continue to put the right kind of capacity in the right places and looking at evolving the offer so that we can deploy essentially hybrid infrastructures that allow us to ebb and flow with the market demand and put the right mix of larger footprint and traditional premium retail into a market at once, and doing that in a way that we also are looking to sort of phase the capital more aggressively by really doing it as just in time as possible and that's another thing that our global designing and construction teams are actively looking at. So, those are the things that are going on right now, in terms of us being able to respond to that. We do see plenty of opportunity and we're going to be selective about that, because not every deal is something that we're going to chase. But the ones that we think are critical to winning in the cloud are things that we will pursue.

So, Colby, then on the other two questions, as it relates to AFFO, what I would say first and foremost is, I think we are – we are now firm on what our calculation is going to be on a go-forward basis. We feel good about – I mean, the biggest area that we're really focusing in was CapEx and making sure we got the recurring CapEx, consistent with how we think we should be measuring this metric. So we've proven that up, and I'll tell you that AFFO on a principle basis is firm. And so we'll continue review it, but I feel very, very comfortable with our current definition. As you can see by all the disclosures we have, we've done a very good reconciliation of what we include between the FFO and the AFFO, and we reconciled also from EBITDA to AFFO. So that's, that's what we feel comfortable with. And we'll tell you that the $810 million increase, the $810 million as I said currency is impacting that number by $43 million, interest based on the November financing, again that was an opportunistic financing, relative to our expectation that adds another $27 million. If we hadn't done that our number would have been looked more likely $880 million on a constant currency basis or roughly 16% up quarter-over-quarter. And then – going then back to the comment just on currencies. If we look at currencies, again we did some bridges in our presentation, and so, when you go to pages 16 and 17, you get a pretty good sense of how currency has impacted it. Suffice it to say, I don't have the exact number, but what we gave was in the press release, we told you the rates of exchange that we're using for our currencies. And embedded in that of course, if you take euro, for example, it's trading spot today is roughly $113 and we've got a blended rate of $120. And it's no different than what we experienced last quarter where basically spot was roughly $126 and we're guiding you at $132. And all that to say is that we are looking at our relatively big currency impact on a quarter-over-quarter basis. And so, as we sort of presented in our reconciliation, in our bridges, you will see absent – taking out currency, we're reporting revenues flat quarter-over-quarter, currency is having a 3 percentage – 3 growth point – I'm sorry, 3 points of growth impact on our Q1 results. And so we've now got – we've got this – the guidance range, we have got the – what we think is the size of the impact, and that should give you a good step forward in how to look at the business.

Great. Thank you.

Our next question comes from Jonathan Atkin with RBC Capital Markets. Your line is open.

Thanks. So, I wanted to go back to the European situation and I just wondered how that M&A deal that's been proposed would affect you from a competitive standpoint given that it would create a clear new leader in the colo sector over there. And then just turning to your comments where you ended up Microsoft to NetApp, and I just wanted to get a sense about indirect channel and if you could quantify the contribution of the indirect channel today and then how large do you see that growing over time? And then finally just on the churn, it's been the lowest it's been for a while, and I wondered if that's sort of a sustainable level or how we should think about churn? Thank you. Stephen M. Smith - President, Chief Executive Officer & Director: All right, Jon. Why don't I start, this is Steve, and then Keith or Charles you guys might want to give your opinion here on the European thing. I think I've stated – I tried to be clear in the first question that was asked about this, about where our priorities are for inorganic growth. And that's where the focus is. So, the combination that you're referring to over there, we're obviously have watched it, will watch it, are – those kinds of styles of companies have been on our gameboard for ever. Our interest is again back to what I said earlier which is to scale this platform globally to bolt more things on like Brazil and Dubai. We feel like the business that we're doing in Europe which is growing faster than both of those assets is doing exactly what we wanted it to do. If you'll remember when we went into Europe 2008, the IX Europe asset was the third largest player. I think, at the time Telecity if I remember correctly was number one, Interxion was number two. Five years later now with the global platform wrapped around our EMEA business, this business is growing two times as fast as our competitors. So, it's doing exactly what we wanted it to do and that's where our priority and focus is going to remain. And we'll compete with regional providers all over the world, I think, it will be no different as we look at this potential combined competitor.

Yeah. I guess, all I'd add Jonathan is that again we really operate primarily and compete primarily as a global platform. And so, in our view the combination wouldn't meaningfully change the competitive dynamic there, the assets that are in play in terms of how they meet the customers' needs are essentially the same in a post-combination world. And again most of the customers who really resonate with the Equinix value proposition are often looking for a global player. As we've talked about, and I think, highlighted here in the metrics in our business, a substantial portion of our revenue is from customers who are operating with us in a multi-region way. And so, we're going to continue to sell into those opportunities and we think we can compete very effectively with those companies either independently or in combination. And then as it relates to the platform players we're very excited about the momentum we're seeing in terms of platform players and the reach that they have into the market particularly from a cloud perspective as customers look at the hybrid cloud implementation and so that's one of the significant investments, we're making is putting channel partners and channel program investments sort of into the system on a global basis and we are seeing levels of engagement between ourselves and the sales teams of key partners like a NetApp, like a Microsoft, et cetera, as being a very meaningful way that we're going to gain access to the enterprise market. And then when you look at that – I mean, as we talked about at Analyst Day, it's a huge addressable market, several hundred thousand possible target customers for the services that we deliver and we're simply not going to reach those with our direct quota bearing head count and so it's critical that we invest in the programs and the channel sales resources to partner up with those types of players.

And then the third question, Jonathan, the...

Churn.

It was churn, and so 1.9% that's the second quarter in a row where we've been below that threshold of 2%. Clearly, we love to be at this level on a continuous basis, but we think it's appropriate to say, we think it stabilized, this is an important metric that has stabilized, number one. Then number two we're guiding on a forward basis 2% to 2.5% recognizing, we think the average is going to be at the lower end of the range, as I said. But the other part is, the reason we give range is, as you can appreciate churn, it has variability to it, and we wanted to make sure that we share that with the investors and on the call here. So for all those reasons, I think, we feel very comfortable that we're seeing stabilization and as we sort of look forward, we feel good with our guidance there. Stephen M. Smith - President, Chief Executive Officer & Director: Yeah, I guess, the only thing I would add is...

Thank you. Stephen M. Smith - President, Chief Executive Officer & Director: – what we always talked about is that the best protection, the best way to manage churn over time is to get the right business in the door to begin with, and I think we've been very disciplined about that and I think we're seeing the benefits of that. And there is some volatility in it, but we continue to see things very positively from the churn perspective.

Thanks a lot.

Our next question comes from Mike McCormack with Jefferies. Your line is open.

Hey, guys. Thanks. I guess just a quick follow-up on the churn side. Taking a longer term, Keith and Charles, given the wake of optimization, is there a way that we can sort of wind this thing or trend it lower or is just there a natural resistance that you guys bump up against. And then secondly, not to keep plugging away on inorganic things, but it sounds like domestically AT&T is interested in probably getting out of some of the data centers. Just trying to get a sense for what you guys think about that asset or the carrier assets that will be a good fit structurally, any thoughts around that would be great?

Yeah, Mike. I'll jump in and start on the first one. I don't know that we know exactly what the natural sort of frictional churn in our business would be, and I think, we're constantly – we're obviously very focused on continuing to reduce churn and make sure that there are no regrettable churn losses in our business. And candidly, there are very few today. For the most part, what we see is frictional churn associated with people optimizing platforms and footprints over time and resolved to a changing dynamic in their business. And so, I don't know that we could answer whether – certainly I think that we have the opportunity to continue to reduce it over time, but I think that the range that we've given you and kind of where within that range we expect to operate is our best current view. Over time, particularly as we scale the enterprise opportunity and if we're winning the kind of business that we expect to win around Performance Hub implementations, attached to Cloud Exchange as part of an overall hybrid cloud implementation, we believe that will be very sticky business, like much of the rest of what we offer today. And so, yes we would strive to be driving that lower. That increases customer lifetime value and creates long-term intrinsic value for the business. So we're going to – we would strive for that, but I think that the range that we've given is probably where we would be comfortable with providing right now until we learn more.

Charles, I'm sorry. Is there a significant difference in the enterprise base with respect to MRR growth or MRR churn?

Well, I mean, I think that we are – right now we are seeing our logo – new logo wins are actually very focused on the enterprise, the bulk of our new logo wins are in the enterprise space. It was I believe our fastest growing bookings segment in the enterprise and so we are probably seeing that segment over index. It's probably easier for it to over index, as it's a bit smaller than the others, but that is certainly a sign of momentum. And then churn wise I would say to be determined, right, because these new implementations, these new enterprise implementations particularly Performance Hub is a new offering for us. Again, we believe based on what we're seeing because of how it leverages our network density and how it leverages our cloud density, we think they're going to be very sticky over time. And again the interconnection momentum we're seeing sort of indicates that. So that would be my comment on that. Stephen M. Smith - President, Chief Executive Officer & Director: I think on your second question Mike, on the AT&T assets, yes, from time-to-time we look at opportunities like this, very frequently and very quickly we fall back to our priorities. It unlikely puts us into a new market where customers want us to go to extend the platform, if it's an interconnected asset, it might be of interest to us, if it's going to extend the cloud ecosystem, or allow us to prosecute enterprises better in some market would be interesting to us. But typically when you're looking at those older assets you're not really buying forward, you're more buying backwards and so not very often do we find an asset from those types of companies. But there are examples and you would know of them. There's examples in some of those companies that – particular assets that would be of interest to us.

If they were to deemphasize that business, would it have any meaningful impact on industry dynamics, industry pricing here? Stephen M. Smith - President, Chief Executive Officer & Director: You mean, being in the co-lo part of their business?

If they start to get out of it, or they sell to somebody else, will that have an overall impact on the pricing environment? Stephen M. Smith - President, Chief Executive Officer & Director: I don't think so, I mean, as you guys, you know we compete with a lot of carriers on that part of their business where they have co-lo assets in certain markets and I think if that share shifted somewhere, it wouldn't be a big impact on us.

Okay. Thanks, guys.

Our final question comes from Amir Rozwadowski with Barclays. Your line is open.

Thank you very much. Obviously we've spoken a bit about the foreign currency here and impact. And I was wondering if we could take it just from a different dynamic, I mean, as you look to build out the global platform, perhaps not even just from an inorganic perspective, but is there an opportunity here to leverage some of the near-term disruption in currency to accelerate some of the investments for building out certain assets in areas where your customer pull has really been driving you? And then a follow-up on that is from a capacity perspective, obviously we saw a couple of quarters ago, there was some rattling in the marketplace in terms of pricing and some builds on capacity. I would love to get an update in terms of where you're seeing sort of pricing trends right now and the capacity that you're seeing in the marketplace? Thank you very much. Stephen M. Smith - President, Chief Executive Officer & Director: Well, why don't I take the first one, and I want to also supplement it with a comment just on margins as well. I think like anything, when the currencies, when our functional currency, which is USD, is strong, clearly it gives you an opportunity to look at initiatives. And from our perspective, because we're already investing quite handsomely across our portfolio and across the regions, I would tell you, it's not going to make us do anything radically different, but like anything when you look at it and you look at the decisions on when to put capital to work in a given market, clearly it can work to your advantage. And so whether it's a U.S. – sorry, whether it's the Canadian dollar or the Australian dollar, or for that matter the Singaporean dollar, to…

And then, I'll wrap up with a commentary on sort of overall pricing environment, supply/demand characteristics in the market. We tend to look at pricing in sort of two primary ways, really the most important being yield and our MRR per cab metrics. As you can see in our regional results, we saw strength across all three regions on a constant currency basis in our MRR per cab. So we continue to really benefit from how we're managing the business both in terms of entry price points on deals as well as – which is really driven by deal discipline, as well as some interconnection and then managing power densities effectively. And so those levers really have given us strong performance on a yield basis. The other dimension of pricing is really as I said entry level price points on deals and obviously the sort of supply demand characteristics in the market influence that heavily. And I guess what I would say is one, where we are – we've been very – continue to be very disciplined about the deals we are pursuing and pursuing those where we have a unique and differentiated value proposition and so continue to see firm pricing there. And even where there are – where we would want to selectively pursue, say larger footprint deals or deals where the competitive overlap with other players maybe higher. What we are seeing is, I would say a favorable balance in overall supply demand across many of our markets and a general stabilization in the pricing environment.

Thank you very much for the incremental color. Stephen M. Smith - President, Chief Executive Officer & Director: Sure.

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