The accompanying financial statements reflect our financial position, results of operations, comprehensive income (loss), equity and cash flows on a consolidated basis. All intercompany account balances have been eliminated.

Cash and cash equivalents include cash on hand and cash invested in short-term securities, which have remaining maturities at the date of purchase of less than 90 days. Cash and cash equivalents are carried at cost, which approximates fair value.

We have restricted cash associated with a collateral trust agreement with our insurance carrier related to our worker's compensation self-insurance program. The restricted cash subject to this agreement was $35,110 and $36,612 as of December 31, 2011 and June 30, 2012, respectively, and is included in current assets on our consolidated balance sheets. Restricted cash consists primarily of U.S. Treasuries.

Local currencies are considered the functional currencies for our operations outside the U.S., with the exception of certain foreign holding companies and our financing center in Switzerland, whose functional currencies are the U.S. dollar. In those instances where the local currency is the functional currency, assets and liabilities are translated at period-end exchange rates, and revenues and expenses are translated at average exchange rates for the applicable period. Resulting translation adjustments are reflected in the accumulated other comprehensive items, net component of Iron Mountain Incorporated Stockholders' Equity and Noncontrolling Interests. The gain or loss on foreign currency transactions, calculated as the difference between the historical exchange rate and the exchange rate at the applicable measurement date, including those related to (1) our 7¹/4% GBP Senior Subordinated Notes due 2014, (2) our 6³/4% Euro Senior Subordinated Notes due 2018, (3) the borrowings in certain foreign currencies under our revolving credit agreement and (4) certain foreign currency denominated intercompany obligations of our foreign subsidiaries to us and between our foreign subsidiaries, which are not considered permanently invested, are included in other expense (income), net, on our consolidated statements of operations. The total gain or loss on foreign currency transactions amounted to a net loss of $1,853 and a net gain of $1,243 for the three and six months ended June 30, 2011, respectively. The total gain or loss on foreign currency transactions amounted to a net loss of $11,761 and $9,186 for the three and six months ended June 30, 2012, respectively.

Goodwill and intangible assets with indefinite lives are not amortized but are reviewed annually for impairment or more frequently if impairment indicators arise. Other than goodwill, we currently have no intangible assets that have indefinite lives and which are not amortized. Separable intangible assets that are not deemed to have indefinite lives are amortized over their useful lives. We annually assess whether a change in the life over which our intangible assets are amortized is necessary or more frequently if events or circumstances warrant.

We have selected October 1 as our annual goodwill impairment review date. We performed our most recent annual goodwill impairment review as of October 1, 2011 and noted no impairment of goodwill. However, as a result of an interim triggering event as discussed below, we recorded a provisional goodwill impairment charge in the third quarter of 2011 associated with our Western European operations that was finalized in the fourth quarter of 2011. As of December 31, 2011 and June 30, 2012, no factors were identified that would alter our October 1, 2011 goodwill assessment. In making this assessment, we relied on a number of factors including operating results, business plans, anticipated future cash flows, transactions and marketplace data. There are inherent uncertainties related to these factors and our judgment in applying them to the analysis of goodwill impairment. When changes occur in the composition of one or more reporting units, the goodwill is reassigned to the reporting units affected based on their relative fair values.

In September 2011, as a result of certain changes we made in the manner in which our European operations are managed, we reorganized our reporting structure and reassigned goodwill among the revised reporting units. Previously, we tested goodwill impairment at the European level on a combined basis. As a result of the management and reporting changes, we concluded that we have three reporting units for our European operations: (1) United Kingdom, Ireland and Norway ("UKI"); (2) Belgium, France, Germany, Luxembourg, Netherlands and Spain ("Western Europe"); and (3) the remaining countries in Europe ("Central Europe"). Due to these changes, we will perform all future goodwill impairment analyses on the new reporting unit basis. As a result of the restructuring of our reporting units, we concluded that we had an interim triggering event, and, therefore, we performed an interim goodwill impairment test for UKI, Western Europe and Central Europe in the third quarter of 2011 as of August 31, 2011. As required by GAAP, prior to our goodwill impairment analysis, we performed an impairment assessment on the long-lived assets within our UKI, Western Europe and Central Europe reporting units and noted no impairment, except for the Italian Business, which was included in our Western Europe reporting unit, and which is now included in discontinued operations as discussed in Note 10. Based on our analysis, we concluded that the goodwill of our UKI and Central Europe reporting units was not impaired. Our UKI and Central Europe reporting units had fair values that exceeded their carrying values by 15.1% and 4.9%, respectively, as of August 31, 2011. Central Europe is still in the investment stage, and, accordingly, its fair value does not exceed its carrying value by a significant margin at this point in time. A deterioration of the UKI or Central Europe businesses or their failure to achieve the forecasted results could lead to impairments in future periods. Our Western Europe reporting unit's fair value was less than its carrying value, and, as a result, we recorded a goodwill impairment charge of $46,500 included as a component of intangible impairments from continuing operations in our consolidated statements of operations for the year ended December 31, 2011. See Note 10 for the portion of the charge allocated to the Italian Business based on a relative fair value basis.

Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2011 were as follows: North America; UKI; Western Europe; Central Europe; Latin America; Australia; and Joint Ventures (which includes India, our various joint ventures in Southeast Asia and Russia (referred to as "Joint Ventures")). As of December 31, 2011, the carrying value of goodwill, net amounted to $1,748,879, $306,150, $46,439, $63,781, $27,322, and $61,697 for North America, UKI, Western Europe, Central Europe, Latin America and Australia, respectively. Our Joint Ventures reporting unit has no goodwill as of December 31, 2011 and June 30, 2012. Our North America, Latin America and Australia reporting units had estimated fair values as of October 1, 2011 that exceeded their carrying values by greater than 40%. As of June 30, 2012, the carrying value of goodwill, net amounted to $1,755,104, $308,148, $44,157, $81,448, $71,066, and $61,887 for North America, UKI, Western Europe, Central Europe, Latin America and Australia, respectively.

Reporting unit valuations have been calculated using an income approach based on the present value of future cash flows of each reporting unit or a combined approach based on the present value of future cash flows and market and transaction multiples of revenues and earnings. The income approach incorporates many assumptions including future growth rates, discount factors, expected capital expenditures and income tax cash flows. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairments in future periods.

The changes in the carrying value of goodwill attributable to each reportable operating segment for the six months ended June 30, 2012 is as follows:

	North American Business		International Business			Total Consolidated

Gross Balance as of December 31, 2011	$	2,010,241	$	564,044		$	2,574,285
Deductible goodwill acquired during the year		5,118		64,010			69,128
Currency effects		1,166		(2,763	)		(1,597	)

Gross Balance as of June 30, 2012	$	2,016,525	$	625,291		$	2,641,816

Accumulated Amortization Balance as of December 31, 2011	$	261,362	$	58,655		$	320,017
Currency effects		59		(70	)		(11	)

Accumulated Amortization Balance as of June 30, 2012	$	261,421	$	58,585		$	320,006

Net Balance as of December 31, 2011	$	1,748,879	$	505,389		$	2,254,268

Net Balance as of June 30, 2012	$	1,755,104	$	566,706		$	2,321,810

Accumulated Goodwill Impairment Balance as of December 31, 2011	$	85,909	$	46,500		$	132,409

Accumulated Goodwill Impairment Balance as of June 30, 2012	$	85,909	$	46,500		$	132,409

The components of our amortizable intangible assets as of June 30, 2012 are as follows:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount

Customer Relationships and Acquisition Costs	$	649,920	$	(202,723	)	$	447,197
Core Technology(1)		3,651		(2,654	)		997
Trademarks and Non-Compete Agreements(1)		3,078		(2,606	)		472
Deferred Financing Costs		54,940		(22,033	)		32,907

Total	$	711,589	$	(230,016	)	$	481,573

Amortization expense associated with amortizable intangible assets (including deferred financing costs) was $8,479 and $16,730 for the three and six months ended June 30, 2011, respectively. Amortization expense associated with amortizable intangible assets (including deferred financing costs) was $9,606 and $19,207 for the three and six months ended June 30, 2012, respectively.

We record stock-based compensation expense, utilizing the straight-line method, for the cost of stock options, restricted stock, restricted stock units, performance units and shares of stock issued under the employee stock purchase plan (together, "Employee Stock-Based Awards").

Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying consolidated statements of operations for the three and six months ended June 30, 2011 was $3,266, including $(334) in discontinued operations, ($430 income after tax or $0.00 per basic and diluted share) and $8,299, including $260 in discontinued operations, ($2,734 after tax or $0.01 per basic and diluted share), respectively. Stock-based compensation expense for Employee Stock-Based Awards for the three and six months ended June 30, 2012 was $6,317 ($5,061 after tax or $0.03 per basic and diluted share) and $16,117 ($11,908 after tax or $0.07 per basic and diluted share), respectively.

Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying consolidated statements of operations related to continuing operations is as follows:

The benefits associated with the tax deductions in excess of recognized compensation cost are required to be reported as a financing cash flow. This requirement reduces reported operating cash flows and increases reported financing cash flows. As a result, net financing cash flows from continuing operations included $57 and $254 for the six months ended June 30, 2011 and 2012, respectively, from the benefits of tax deductions in excess of recognized compensation cost. The tax benefit of any resulting excess tax deduction increases the Additional Paid-in Capital ("APIC") pool. Any resulting tax deficiency is deducted from the APIC pool.

Under our various stock option plans, options were granted with exercise prices equal to the market price of the stock on the date of grant. The majority of our options become exercisable ratably over a period of five years and generally have a contractual life of ten years, unless the holder's employment is sooner terminated. Certain of the options we issue become exercisable ratably over a period of ten years and have a contractual life of 12 years, unless the holder's employment is sooner terminated. As of June 30, 2012, ten-year vesting options represent 7.5% of total outstanding options. Beginning in 2011, certain of the options we issue become exercisable ratably over a period of three years and have a contractual life of ten years, unless the holder's employment is sooner terminated. As of June 30, 2012, three-year vesting options represented 11.8% of total outstanding options. Our non-employee directors are considered employees for purposes of our stock option plans and stock option reporting. Options granted to our non-employee directors generally become exercisable after one year.

The weighted average fair value of options granted for the six months ended June 30, 2011 and 2012 was $7.43 and $7.00 per share, respectively. These values were estimated on the date of grant using the Black-Scholes option pricing model. The following table summarizes the weighted average assumptions used for grants in the respective period:

Expected volatility is calculated utilizing daily historical volatility over a period that equates to the expected life of the option. The risk-free interest rate was based on the U.S. Treasury interest rates whose term is consistent with the expected life of the stock options. Expected dividend yield is considered in the option pricing model and represents our current annualized expected per share dividends over the current trade price of our common stock. The expected life (estimated period of time outstanding) of the stock options granted is estimated using the historical exercise behavior of employees.

A summary of option activity for the six months ended June 30, 2012 is as follows:

			Weighted Average Exercise Price			Aggregate Intrinsic value

Outstanding at December 31, 2011	7,118,458		$	25.73
Granted	21,472			28.86
Exercised	(412,728	)		23.48
Forfeited	(171,402	)		25.83
Expired	(28,291	)		33.03

Outstanding at June 30, 2012	6,527,509		$	25.85	6.24	$	47,476

Options exercisable at June 30, 2012	4,236,162		$	25.69	5.48	$	31,678

Options expected to vest	2,118,795		$	26.16	7.63	$	14,594

The following table provides the aggregate intrinsic value of stock options exercised for the three and six months ended June 30, 2011 and 2012:

Under our various stock option plans, we may also issue grants of restricted stock or restricted stock units ("RSUs"). Our restricted stock and RSUs generally have a three to five year vesting period. Certain of our RSUs accrue dividend equivalents associated with the underlying stock as we declare dividends. Dividends will generally be paid to holders of RSUs in cash upon the vesting date of the associated RSU and will be forfeited if the RSU does not vest. We accrued approximately $34 of cash dividends on RSUs issued in June 2012. The fair value of restricted stock and RSUs is the excess of the market price of our common stock at the date of grant over the purchase price (which is typically zero).

A summary of restricted stock and RSUs activity for the six months ended June 30, 2012 is as follows:

The total fair value of restricted stock vested during the three and six months ended June 30, 2011 was $13. The total fair value of restricted stock vested during the three and six months ended June 30, 2012 was $1. The total fair value of RSUs vested during the three and six months ended June 30, 2011 was $462. The total fair value of RSUs vested during the three and six months ended June 30, 2012 was $1,985 and $5,964, respectively.

Under our various stock option plans, we may also issue grants of performance units ("PUs"). The number of PUs earned is determined based on our performance against predefined targets, which were calendar year revenue growth and return on invested capital ("ROIC") for grants of PUs made in 2011 and 2012. The range of payout is zero to 150% of the number of granted PUs. The number of PUs earned is determined based on actual performance at the end of the one-year performance period, and the award will be settled in shares of our common stock, subject to cliff vesting, three years from the date of the original PU grant. Additionally, employees who are employed through the one-year anniversary of the date of grant and who reach both 55 years of age and 10 years of qualifying service (the "retirement criteria") shall immediately and completely vest in any PUs earned based on the actual achievement against the predefined targets as discussed above. As a result, PUs will be expensed over the shorter of (1) the vesting period, (2) achievement of the retirement criteria, which such achievement may occur as early as one year after the date of grant, or (3) a maximum of three years.

During the six months ended June 30, 2012, we issued 221,781 PUs. During the one-year performance period, we will forecast the likelihood of achieving the predefined annual revenue growth and ROIC targets in order to calculate the expected PUs to be earned. We will record a compensation charge based on either the forecasted PUs to be earned (during the one-year performance period) or the actual PUs earned (at the one-year anniversary date) over the vesting period for each individual grant as described above. The PU liability is remeasured at each fiscal quarter-end during the vesting period using the estimated percentage of units earned multiplied by the closing market price of our common stock on the current period-end date and is pro-rated based on the amount of time passed in the vesting period. The total fair value of earned PUs that vested during the three and six months ended June 30, 2012 was $1,233 and $4,058, respectively. As of June 30, 2012, we expected 100.6% achievement of the predefined revenue and ROIC targets associated with the grants made in 2012, and the closing market price of our common stock was $32.96.

							Weighted- Average Grant-Date Fair Value

Non-vested at December 31, 2011	112,749		—		112,749		$	29.06
Granted	221,781		12,012		233,793			28.87
Vested	(124,914	)	(5,013	)	(129,927	)		29.47
Forfeited	(3,381	)	—		(3,381	)		28.11

Non-vested at June 30, 2012	206,235		6,999		213,234		$	28.61

We offer an employee stock purchase plan (the "ESPP") in which participation is available to substantially all U.S. and Canadian employees who meet certain service eligibility requirements. The ESPP provides a way for our eligible employees to become stockholders on favorable terms. The ESPP provides for the purchase of our common stock by eligible employees through successive offering periods. We generally have two six-month offering periods per year, the first of which begins June 1 and ends November 30 and the second of which begins December 1 and ends May 31. During each offering period, participating employees accumulate after-tax payroll contributions, up to a maximum of 15% of their compensation, to pay the exercise price of their options. Participating employees may withdraw from an offering period before the purchase date and obtain a refund of the amounts withheld as payroll deductions. At the end of the offering period, outstanding options are exercised, and each employee's accumulated contributions are used to purchase our common stock. The price for shares purchased under the ESPP is 95% of the fair market price at the end of the offering period, without a look-back feature. As a result, we do not recognize compensation cost for the ESPP shares purchased. For the six months ended June 30, 2011 and 2012, there were 82,267 shares and 88,672 shares, respectively, purchased under the ESPP. The number of shares available for purchase under the ESPP at June 30, 2012 was 311,089.

As of June 30, 2012, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards was $52,757 and is expected to be recognized over a weighted-average period of 2.6 years.

We generally issue shares for the exercises of stock options, restricted stock, RSUs, PUs and shares under our ESPP from unissued reserved shares.

Basic income (loss) per common share is calculated by dividing income (loss) by the weighted average number of common shares outstanding. The calculation of diluted income (loss) per share is consistent with that of basic income (loss) per share but gives effect to all potential common shares (that is, securities such as options, warrants or convertible securities) that were outstanding during the period, unless the effect is antidilutive.

The following table presents the calculation of basic and diluted income (loss) per share:

	Three Months Ended June 30,					Six Months Ended June 30,

	2011		2012			2011		2012
Income (Loss) from continuing operations	$	67,460	$	41,441		$	148,636	$	102,514

Total income (loss) from discontinued operations (see Note 10)	$	185,587	$	(2,524	)	$	179,030	$	(7,617	)

Net income (loss) attributable to Iron Mountain Incorporated	$	252,684	$	38,055		$	326,144	$	93,405

Weighted-average shares—basic		201,653,000		171,296,000			200,941,000		171,308,000
Effect of dilutive potential stock options		1,538,373		753,385			1,266,761		737,087
Effect of dilutive potential restricted stock, RSUs and PUs		119,319		181,292			73,489		181,580

Weighted-average shares—diluted		203,310,692		172,230,677			202,281,250		172,226,667

Earnings (Losses) per share—basic:
Income (Loss) from continuing operations	$	0.33	$	0.24		$	0.74	$	0.60

Total income (loss) from discontinued operations (see Note 10)	$	0.92	$	(0.01	)	$	0.89	$	(0.04	)

Net income (loss) attributable to Iron Mountain Incorporated—basic	$	1.25	$	0.22		$	1.62	$	0.55

Earnings (Losses) per share—diluted:
Income (Loss) from continuing operations	$	0.33	$	0.24		$	0.73	$	0.60

Total income (loss) from discontinued operations (see Note 10)	$	0.91	$	(0.01	)	$	0.89	$	(0.04	)

Net income (loss) attributable to Iron Mountain Incorporated—diluted	$	1.24	$	0.22		$	1.61	$	0.54

Antidilutive stock options, RSUs and PUs, excluded from the calculation		2,126,488		1,885,060			5,413,769		1,965,338

Our revenues consist of storage rental revenues as well as service revenues and are reflected net of sales and value added taxes. Storage rental revenues, which are considered a key performance indicator for the information management services industry, consist primarily of recurring periodic charges related to the storage of materials or data (generally on a per unit basis). Service revenues are comprised of charges for related core service activities and a wide array of complementary products and services. Included in core service revenues are: (1) the handling of records, including the addition of new records, temporary removal of records from storage, refiling of removed records and the destruction of records; (2) courier operations, consisting primarily of the pickup and delivery of records upon customer request; (3) secure shredding of sensitive documents; and (4) other recurring services, including hybrid services, which relate to physical and digital records, and recurring project revenues. Our complementary services revenues include special project work, customer termination and permanent withdrawal fees, data restoration projects, fulfillment services, consulting services, technology services and product sales (including specially designed storage containers and related supplies). Our secure shredding revenues include the sale of recycled paper (included in complementary services revenues), the price of which can fluctuate from period to period, adding to the volatility and reducing the predictability of that revenue stream.

We recognize revenue when the following criteria are met: persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable and collectability of the resulting receivable is reasonably assured. Storage rental and service revenues are recognized in the month the respective storage rental or service is provided, and customers are generally billed on a monthly basis on contractually agreed-upon terms. Amounts related to future storage rental or prepaid service contracts for customers where storage rental fees or services are billed in advance are accounted for as deferred revenue and recognized ratably over the applicable storage rental or service period or when the service is performed. Revenue from the sales of products, which is included as a component of service revenues, is recognized when products are shipped to the customer and title has passed to the customer. Revenues from the sales of products have historically not been significant.

We maintain an allowance for doubtful accounts and credit memos for estimated losses resulting from the potential inability of our customers to make required payments and potential disputes regarding billing and service issues. When calculating the allowance, we consider our past loss experience, current and prior trends in our aged receivables and credit memo activity, current economic conditions and specific circumstances of individual receivable balances. If the financial condition of our customers were to significantly change, resulting in a significant improvement or impairment of their ability to make payments, an adjustment of the allowance may be required. We consider accounts receivable to be delinquent after such time as reasonable means of collection have been exhausted. We charge-off uncollectible balances as circumstances warrant, generally, no later than one year past due.

Our effective tax rates for the three and six months ended June 30, 2011 were 31.0% and 24.0%, respectively. Our effective tax rates for the three and six months ended June 30, 2012 were 54.2% and 42.0%, respectively. The primary reconciling items between the federal statutory rate of 35% and our overall effective tax rate are state income taxes (net of federal benefit) and differences in the rates of tax at which our foreign earnings are subject, including foreign exchange gains and losses in different jurisdictions with different tax rates. During the three and six months ended June 30, 2011, foreign currency losses were recorded in higher tax jurisdictions associated with our marking-to-market of debt and derivative instruments while foreign currency gains were recorded in lower tax jurisdictions associated with our marking-to-market of intercompany loan positions, which reduced our 2011 effective tax rate during the three and six months ended June 30, 2011 by 2.2% and 7.0%, respectively. During the three and six months ended June 30, 2012, foreign currency gains were recorded in higher tax jurisdictions associated with our marking-to-market of debt and derivative instruments while foreign currency losses were recorded in lower tax jurisdictions associated with our marking-to-market of intercompany loan positions, which increased our 2012 effective tax rate by 10.2% and 0.9%, respectively.

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year. Discrete items and changes in our estimate of the annual effective tax rate are recorded in the period they occur. Our effective tax rate is subject to variability in the future due to, among other items: (1) changes in the mix of income from foreign jurisdictions; (2) tax law changes; (3) volatility in foreign exchange gains (losses); (4) the timing of the establishment and reversal of tax reserves; and (5) our ability to utilize foreign tax credits that we generate. We are subject to income taxes in the U.S. and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have significant business operations. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in changes in our estimates.

Accounting for income taxes requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax and financial reporting basis of assets and liabilities and for loss and credit carryforwards. Valuation allowances are provided when recovery of deferred tax assets is not considered more likely than not.

We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the provision (benefit) for income taxes in the accompanying consolidated statements of operations. We recorded a reduction of $647 and $1,256 for gross interest and penalties for the three and six months ended June 30, 2011, respectively. We recorded an increase of $247 and a reduction of $2 for gross interest and penalties for the three and six months ended June 30, 2012, respectively. We had $2,819 and $2,817 accrued for the payment of interest and penalties as of December 31, 2011 and June 30, 2012, respectively.

We have not recorded deferred taxes on book over tax outside basis differences related to certain foreign subsidiaries because such basis differences are not expected to reverse in the foreseeable future and we intend to reinvest indefinitely outside the U.S. These basis differences arose primarily through the undistributed book earnings of our foreign subsidiaries. The basis differences could be reversed through a sale of the subsidiaries, each of which would result in an increase in our provision for income taxes. It is not practicable to calculate the amount of unrecognized deferred tax liability on the book over tax outside basis difference because of the complexities of the hypothetical calculation. As of June 30, 2012, we had approximately $36,000 of undistributed earnings within our foreign subsidiaries which approximates the book over tax outside basis difference. In the event that we receive a favorable indication from the U.S. Internal Revenue Service with regard to our real estate investment trust ("REIT") private letter ruling requests, we may record deferred taxes on book over tax outside basis differences related to certain foreign subsidiaries.

As of June 30, 2012, we have reclassified approximately $44,000 of long-term deferred income tax liabilities against current deferred income taxes and prepaid and other assets included within current assets and against accrued expenses included within current liabilities of our consolidated balance sheet related to the depreciation recapture associated with our recharacterization of racking as real estate as opposed to personal property in conjunction with our potential REIT conversion.

Financial instruments that potentially subject us to market risk consist principally of cash and cash equivalents (including money market funds and time deposits), restricted cash (primarily U.S. Treasuries) and accounts receivable. The only significant concentrations of liquid investments as of both December 31, 2011 and June 30, 2012 relate to cash and cash equivalents and restricted cash held on deposit with five global banks and one "Triple A" rated money market fund, and five global banks and two "Triple A" rated money market funds, respectively, which we consider to be large, highly-rated investment-grade institutions. As per our risk management investment policy, we limit exposure to concentration of credit risk by limiting the amount invested in any one mutual fund or financial institution to a maximum of $75,000. As of December 31, 2011 and June 30, 2012, our cash and cash equivalents and restricted cash balance was $214,955 and $206,842, respectively, including money market funds and time deposits amounting to $181,823 and $170,409, respectively. A substantial portion of the money market funds is invested in U.S. Treasuries.

Entities are permitted under GAAP to elect to measure many financial instruments and certain other items at either fair value or cost. We did not elect the fair value measurement option for any of our financial assets or liabilities.

Our financial assets or liabilities are measured using inputs from the three levels of the fair value hierarchy. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following tables provide the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2011 and June 30, 2012, respectively:

			Fair Value Measurements at December 31, 2011 Using

Description	Total Carrying Value at December 31, 2011		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Money Market Funds(1)	$	35,110	$	—		$	35,110		$	—
Time Deposits(1)		146,713		—			146,713			—
Trading Securities		9,124		8,497	(2)		627	(1)		—
Derivative Assets(3)		2,803		—			2,803			—
Derivative Liabilities(3)		435		—			435			—

			Fair Value Measurements at June 30, 2012 Using

Description	Total Carrying Value at June 30, 2012		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Money Market Funds(1)	$	71,046	$	—		$	71,046		$	—
Time Deposits(1)		99,363		—			99,363			—
Trading Securities		9,760		8,986	(2)		774	(1)		—
Derivative Assets(3)		2,609		—			2,609			—
Derivative Liabilities(3)		731		—			731			—

(1): Money market funds and time deposits (including certain trading securities) are measured based on quoted prices for similar assets and/or subsequent transactions.
(2): Securities are measured at fair value using quoted market prices.
(3): Our derivative assets and liabilities primarily relate to short-term (six months or less) foreign currency contracts that we have entered into to hedge our intercompany exposures denominated in British pounds sterling and Australian dollars. We calculate the fair value of such forward contracts by adjusting the spot rate utilized at the balance sheet date for translation purposes by an estimate of the forward points observed in active markets.

Disclosures are required in the financial statements for items measured at fair value on a non-recurring basis. We did not have any material items that are measured at fair value on a non-recurring basis for the three and six months ended June 30, 2012.

In September 2011, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 allows, but does not require, entities to first assess qualitatively whether it is necessary to perform the two-step goodwill impairment test. If an entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative two-step impairment test is required; otherwise, no further testing is required. We adopted ASU 2011-08 as of January 1, 2012. The adoption of ASU 2011-08 did not have an impact on our consolidated financial position, results of operations or cash flows.

The preparation of financial statements in conformity with GAAP requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an on-going basis, we evaluate the estimates used. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. Actual results may differ from these estimates.

Accumulated other comprehensive items, net consists of foreign currency translation adjustments as of December, 31, 2011 and June 30, 2012, respectively.

	Three Months Ended June 30,						Six Months Ended June 30,

	2011			2012			2011			2012
Foreign currency transaction losses (gains), net	$	1,853		$	11,761		$	(1,243	)	$	9,186
Debt extinguishment expense, net		1,843			—			993			—
Other, net		(1,075	)		(1,695	)		(6,087	)		(2,424	)

	$	2,621		$	10,066		$	(6,337	)	$	6,762