ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 77-0487526 | |
(State of incorporation) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ý | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
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Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
June 30, 2017 | December 31, 2016 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,063,777 | $ | 748,476 | |||
Short-term investments | 4,242 | 3,409 | |||||
Accounts receivable, net | 545,734 | 396,245 | |||||
Other current assets | 235,871 | 319,396 | |||||
Total current assets | 1,849,624 | 1,467,526 | |||||
Long-term investments | 6,389 | 10,042 | |||||
Property, plant and equipment, net | 8,746,595 | 7,199,210 | |||||
Goodwill | 4,225,553 | 2,986,064 | |||||
Intangible assets, net | 2,382,230 | 719,231 | |||||
Other assets | 263,546 | 226,298 | |||||
Total assets | $ | 17,473,937 | $ | 12,608,371 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 612,593 | $ | 581,739 | |||
Accrued property, plant and equipment | 192,381 | 144,842 | |||||
Current portion of capital lease and other financing obligations | 62,937 | 101,046 | |||||
Current portion of mortgage and loans payable | 83,022 | 67,928 | |||||
Other current liabilities | 140,502 | 133,140 | |||||
Total current liabilities | 1,091,435 | 1,028,695 | |||||
Capital lease and other financing obligations, less current portion | 1,584,287 | 1,410,742 | |||||
Mortgage and loans payable, less current portion | 2,511,447 | 1,369,087 | |||||
Senior notes | 5,047,426 | 3,810,770 | |||||
Other liabilities | 715,679 | 623,248 | |||||
Total liabilities | 10,950,274 | 8,242,542 | |||||
Commitments and contingencies (Note 10) | |||||||
Stockholders' equity: | |||||||
Common stock, $0.001 par value per share: 300,000,000 shares authorized; 77,944,939 and 71,409,015 shares outstanding | 78 | 72 | |||||
Additional paid-in capital | 9,648,817 | 7,413,519 | |||||
Treasury stock, at cost; 405,472 and 408,415 shares | (146,982 | ) | (147,559 | ) | |||
Accumulated dividends | (2,274,503 | ) | (1,969,645 | ) | |||
Accumulated other comprehensive loss | (811,321 | ) | (949,142 | ) | |||
Retained earnings | 107,574 | 18,584 | |||||
Total stockholders' equity | 6,523,663 | 4,365,829 | |||||
Total liabilities and stockholders' equity | $ | 17,473,937 | $ | 12,608,371 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(Unaudited) | |||||||||||||||
Revenues | $ | 1,066,421 | $ | 900,510 | $ | 2,015,946 | $ | 1,744,666 | |||||||
Costs and operating expenses: | |||||||||||||||
Cost of revenues | 522,203 | 456,967 | 991,164 | 884,647 | |||||||||||
Sales and marketing | 141,566 | 107,832 | 270,493 | 214,422 | |||||||||||
General and administrative | 191,355 | 168,462 | 372,754 | 334,366 | |||||||||||
Acquisition costs | 26,402 | 15,594 | 29,427 | 52,130 | |||||||||||
Gains on asset sales | — | — | — | (5,242 | ) | ||||||||||
Total costs and operating expenses | 881,526 | 748,855 | 1,663,838 | 1,480,323 | |||||||||||
Income from continuing operations | 184,895 | 151,655 | 352,108 | 264,343 | |||||||||||
Interest income | 4,437 | 841 | 7,529 | 1,766 | |||||||||||
Interest expense | (119,042 | ) | (100,332 | ) | (230,726 | ) | (201,195 | ) | |||||||
Other income (expense) | 1,284 | 1,555 | 1,621 | (59,155 | ) | ||||||||||
Loss on debt extinguishment | (16,444 | ) | (605 | ) | (19,947 | ) | (605 | ) | |||||||
Income from continuing operations before income taxes | 55,130 | 53,114 | 110,585 | 5,154 | |||||||||||
Income tax expense | (9,325 | ) | (13,812 | ) | (22,718 | ) | (3,179 | ) | |||||||
Net income from continuing operations | 45,805 | 39,302 | 87,867 | 1,975 | |||||||||||
Net income from discontinued operations, net of tax | — | 5,409 | — | 11,625 | |||||||||||
Net income | $ | 45,805 | $ | 44,711 | $ | 87,867 | $ | 13,600 | |||||||
Earnings per share ("EPS"): | |||||||||||||||
Basic EPS from continuing operations | $ | 0.59 | $ | 0.56 | $ | 1.17 | $ | 0.03 | |||||||
Basic EPS from discontinued operations | — | 0.08 | — | 0.17 | |||||||||||
Basic EPS | $ | 0.59 | $ | 0.64 | $ | 1.17 | $ | 0.20 | |||||||
Weighted-average shares | 77,923 | 69,729 | 75,383 | 68,931 | |||||||||||
Diluted EPS from continuing operations | $ | 0.58 | $ | 0.56 | $ | 1.16 | $ | 0.03 | |||||||
Diluted EPS from discontinued operations | — | 0.08 | — | 0.17 | |||||||||||
Diluted EPS | $ | 0.58 | $ | 0.64 | $ | 1.16 | $ | 0.20 | |||||||
Weighted-average shares for diluted EPS | 78,508 | 70,364 | 76,008 | 69,575 | |||||||||||
Cash dividends declared per common share | $ | 2.00 | $ | 1.75 | $ | 4.00 | $ | 3.50 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(Unaudited) | |||||||||||||||
Net income | $ | 45,805 | $ | 44,711 | $ | 87,867 | $ | 13,600 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustment ("CTA") gain (loss) | 200,983 | (298,361 | ) | 307,921 | (182,462 | ) | |||||||||
Unrealized gain (loss) on available-for-sale securities, net of tax effects of $29, $(558), $(70) and $(420) | (65 | ) | 1,199 | (330 | ) | 895 | |||||||||
Unrealized gain (loss) on cash flow hedges, net of tax effects of $9,240, $(4,908), $13,291 and $(2,647) | (27,671 | ) | 14,726 | (39,398 | ) | 7,942 | |||||||||
Net investment hedge CTA gain (loss) | (101,847 | ) | 55,196 | (130,398 | ) | 38,884 | |||||||||
Net actuarial gain on defined benefit plans, net of tax effects of $(4), $(2), $(10) and $(6) | 15 | 8 | 26 | 14 | |||||||||||
Total other comprehensive income (loss), net of tax | 71,415 | (227,232 | ) | 137,821 | (134,727 | ) | |||||||||
Comprehensive income (loss), net of tax | $ | 117,220 | $ | (182,521 | ) | $ | 225,688 | $ | (121,127 | ) |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
(Unaudited) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 87,867 | $ | 13,600 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 392,617 | 352,130 | |||||
Stock-based compensation | 83,948 | 73,384 | |||||
Amortization of intangible assets | 79,175 | 60,455 | |||||
Amortization of debt issuance costs and debt discounts | 15,710 | 11,025 | |||||
Provision for allowance for doubtful accounts | 7,989 | 3,648 | |||||
Gain on asset sales | — | (5,242 | ) | ||||
Loss on debt extinguishment | 19,947 | 318 | |||||
Other items | 3,773 | 11,821 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (151,900 | ) | (42,367 | ) | |||
Income taxes, net | (33,927 | ) | (23,755 | ) | |||
Accounts payable and accrued expenses | 16,171 | (10,625 | ) | ||||
Other assets and liabilities | 32,474 | (61,294 | ) | ||||
Net cash provided by operating activities | 553,844 | 383,098 | |||||
Cash flows from investing activities: | |||||||
Purchases of investments | (26,257 | ) | (16,482 | ) | |||
Sales and maturities of investments | 29,456 | 28,665 | |||||
Business acquisitions, net of cash and restricted cash acquired | (3,629,654 | ) | (1,601,326 | ) | |||
Purchases of real estate | (48,580 | ) | (28,118 | ) | |||
Purchases of other property, plant and equipment | (625,814 | ) | (447,567 | ) | |||
Proceeds from sale of assets | 47,767 | 22,825 | |||||
Net cash used in investing activities | (4,253,082 | ) | (2,042,003 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from employee equity awards | 20,119 | 17,639 | |||||
Payment of dividends | (304,373 | ) | (246,694 | ) | |||
Proceeds from public offering of common stock, net of offering costs | 2,126,341 | — | |||||
Proceeds from senior notes | 1,250,000 | — | |||||
Proceeds from loans payable | 1,059,800 | 701,250 | |||||
Repayment of capital lease and other financing obligations | (44,460 | ) | (45,335 | ) | |||
Repayment of convertible debt, mortgage, and loans payable | (42,305 | ) | (973,111 | ) | |||
Debt extinguishment costs | (11,254 | ) | — | ||||
Debt issuance costs | (40,619 | ) | (42 | ) | |||
Other financing activities | (900 | ) | — | ||||
Net cash provided by (used) in financing activities | 4,012,349 | (546,293 | ) | ||||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | 16,868 | 8,639 | |||||
Change in cash balances included in assets held for sale | — | (25,111 | ) | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 329,979 | (2,221,670 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 773,247 | 2,718,427 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,103,226 | $ | 496,757 | |||
Cash and cash equivalents | $ | 1,063,777 | $ | 483,160 | |||
Current portion of restricted cash included in other current assets | 28,965 | 3,411 | |||||
Non-current portion of restricted cash included in other assets | 10,484 | 10,186 | |||||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows | $ | 1,103,226 | $ | 496,757 | |||
1. | Basis of Presentation and Significant Accounting Policies |
2. | Earnings Per Share |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income: | |||||||||||||||
Net income from continuing operations | $ | 45,805 | $ | 39,302 | $ | 87,867 | $ | 1,975 | |||||||
Net income from discontinued operations | — | 5,409 | — | 11,625 | |||||||||||
Net income | $ | 45,805 | $ | 44,711 | $ | 87,867 | $ | 13,600 | |||||||
Weighted-average shares used to calculate basic EPS | 77,923 | 69,729 | 75,383 | 68,931 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee equity awards | 585 | 635 | 625 | 644 | |||||||||||
Weighted-average shares used to calculate diluted EPS | 78,508 | 70,364 | 76,008 | 69,575 | |||||||||||
Basic EPS: | |||||||||||||||
Continuing operations | $ | 0.59 | $ | 0.56 | $ | 1.17 | $ | 0.03 | |||||||
Discontinued operations | — | 0.08 | — | 0.17 | |||||||||||
Basic EPS | $ | 0.59 | $ | 0.64 | $ | 1.17 | $ | 0.20 | |||||||
Diluted EPS: | |||||||||||||||
Continuing operations | $ | 0.58 | $ | 0.56 | $ | 1.16 | $ | 0.03 | |||||||
Discontinued operations | — | 0.08 | — | 0.17 | |||||||||||
Diluted EPS | $ | 0.58 | $ | 0.64 | $ | 1.16 | $ | 0.20 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Shares reserved for conversion of 4.75% convertible subordinated notes | — | 1,627 | — | 1,795 | |||||||
Common stock related to employee equity awards | 4 | 7 | 52 | 3 | |||||||
Total | 4 | 1,634 | 52 | 1,798 |
3. | Acquisitions |
Cash and cash equivalents | $ | 1,073 | |
Accounts receivable | 319 | ||
Other current assets | 7,319 | ||
Property, plant, and equipment | 837,559 | ||
Intangible assets | 1,702,900 | ||
Goodwill | 1,087,571 | ||
Total assets acquired | 3,636,741 | ||
Accounts payable and accrued liabilities | (1,725 | ) | |
Other current liabilities | (320 | ) | |
Capital lease and other financing obligations | (17,025 | ) | |
Deferred tax liabilities | (16,878 | ) | |
Other liabilities | (6,107 | ) | |
Net assets acquired | $ | 3,594,686 |
Intangible Assets | Fair Value | Weighted-average Estimated Useful Lives (Years) | ||||
Customer relationships (1) | $ | 1,702,900 | 14.3 |
(1) | Included in this amount is a customer relationship intangible asset for Verizon totaling $374.8 million. Pursuant to the acquisition agreement, the Company formalized agreements to provide pre-existing space and services to Verizon at the acquired data centers. |
Cash and cash equivalents | $ | 4,073 | |
Accounts receivable | 1,507 | ||
Other current assets | 794 | ||
Property, plant and equipment | 143,972 | ||
Intangible assets | 11,758 | ||
Goodwill | 48,835 | ||
Other assets | 81 | ||
Total assets acquired | 211,020 | ||
Accounts payable and accrued liabilities | (2,044 | ) | |
Other current liabilities | (2,798 | ) | |
Deferred tax liabilities | (42,395 | ) | |
Other liabilities | (755 | ) | |
Net assets acquired | $ | 163,028 |
Intangible Assets | Fair Value | Estimated Useful Lives (Years) | Weighted-average Estimated Useful Lives (Years) | |||||
In-place leases | $ | 7,485 | 0.9-9.4 | 4.3 | ||||
Favorable leasehold interests | 4,273 | 1.9-6.7 | 5.3 |
Cash and cash equivalents | $ | 73,368 | |
Accounts receivable | 24,042 | ||
Other current assets | 41,079 | ||
Assets held for sale | 877,650 | ||
Property, plant and equipment | 1,058,583 | ||
Goodwill | 2,215,567 | ||
Intangible assets | 694,243 | ||
Deferred tax assets | 994 | ||
Other assets | 4,102 | ||
Total assets acquired | 4,989,628 | ||
Accounts payable and accrued expenses | (84,367 | ) | |
Accrued property, plant and equipment | (3,634 | ) | |
Other current liabilities | (27,233 | ) | |
Liabilities held for sale | (155,650 | ) | |
Capital lease and other financing obligations | (165,365 | ) | |
Mortgage and loans payable | (592,304 | ) | |
Deferred tax liabilities | (176,168 | ) | |
Other liabilities | (40,021 | ) | |
Net assets acquired | $ | 3,744,886 |
Intangible Assets | Fair Value | Estimated Useful Lives (Years) | Weighted-average Estimated Useful Lives (Years) | |||||
Customer relationships | $ | 591,956 | 13.5 | 13.5 | ||||
Trade names | 72,033 | 1.5 | 1.5 | |||||
Favorable leases | 30,254 | 2.0 - 25.4 | 19.7 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues | $ | 1,101,848 | $ | 1,010,833 | $ | 2,157,653 | $ | 1,965,312 | |||||||
Net income (loss) from continuing operations | 74,831 | 30,673 | 124,160 | (58,993 | ) | ||||||||||
Basic EPS | 0.96 | 0.40 | 1.60 | (0.79 | ) | ||||||||||
Diluted EPS | 0.95 | 0.40 | 1.58 | (0.79 | ) |
4. | Assets Held for Sale |
5. | Discontinued Operations |
Three Months Ended June 30, 2016 | Six Months Ended June 30, 2016 | ||||||
Revenues | $ | 30,401 | $ | 50,982 | |||
Costs and operating expenses: | |||||||
Cost of revenues | 13,490 | 25,100 | |||||
Sales and marketing | 979 | 1,196 | |||||
General and administrative | 6,920 | 7,303 | |||||
Total costs and operating expenses | 21,389 | 33,599 | |||||
Income from discontinued operations | 9,012 | 17,383 | |||||
Interest and other, net | (708 | ) | (1,177 | ) | |||
Income from discontinued operations before income taxes | 8,304 | 16,206 | |||||
Income tax expense | (2,895 | ) | (4,581 | ) | |||
Net income from discontinued operations, net of tax | $ | 5,409 | $ | 11,625 |
6. | Derivatives and Hedging Activities |
Notional Amount | Fair Value (1) | Accumulated Other Comprehensive Income (Loss) (2) (3) | |||||||||
Derivative assets | $ | 177,873 | $ | 10,284 | $ | 9,375 | |||||
Derivative liabilities | 449,147 | (18,049 | ) | (20,884 | ) | ||||||
Total | $ | 627,020 | $ | (7,765 | ) | $ | (11,509 | ) |
(1) | All derivatives related to cash flow hedges are included in the condensed consolidated balance sheets within other current assets, other assets, other current liabilities and other liabilities. |
(2) | Included in the condensed consolidated balance sheets within accumulated other comprehensive income (loss). |
(3) | The Company recorded a net loss of $3.0 million within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to revenues and expenses as they mature in the next 12 months. |
Notional Amount | Fair Value (1) | Accumulated Other Comprehensive Income (Loss) (2) (3) | |||||||||
Derivative assets | $ | 545,638 | $ | 44,570 | $ | 42,634 | |||||
Derivative liabilities | 42,207 | (1,815 | ) | (1,453 | ) | ||||||
Total | $ | 587,845 | $ | 42,755 | $ | 41,181 |
(1) | All derivatives related to cash flow hedges are included in the condensed consolidated balance sheets within other current assets, other assets, other current liabilities and other liabilities. |
(2) | Included in the condensed consolidated balance sheets within accumulated other comprehensive income (loss). |
(3) | The Company recorded a net gain of $31.9 million within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to revenues and expenses as they mature over the next 12 months. |
Gross Amounts | Gross Amounts Offset in the Balance Sheet | Net Amounts (1) | Gross Amounts not Offset in the Balance Sheet (2) | Net | |||||||||||||||
Assets: | |||||||||||||||||||
Designated as hedging instruments: | |||||||||||||||||||
Foreign currency forward contracts designated as cash flow hedges | $ | 10,284 | $ | — | $ | 10,284 | $ | (10,284 | ) | $ | — | ||||||||
Not designated as hedging instruments: | |||||||||||||||||||
Embedded derivatives | 5,695 | — | 5,695 | — | 5,695 | ||||||||||||||
Economic hedges of embedded derivatives | 618 | — | 618 | — | 618 | ||||||||||||||
Foreign currency forward contracts | 335 | — | 335 | (335 | ) | — | |||||||||||||
6,648 | — | 6,648 | (335 | ) | 6,313 | ||||||||||||||
Additional netting benefit | — | — | — | (618 | ) | (618 | ) | ||||||||||||
$ | 16,932 | $ | — | $ | 16,932 | $ | (11,237 | ) | $ | 5,695 | |||||||||
Liabilities: | |||||||||||||||||||
Designated as hedging instruments | |||||||||||||||||||
Foreign currency forward and option contracts designated as cash flow hedges | $ | 18,049 | $ | — | $ | 18,049 | $ | (10,284 | ) | $ | 7,765 | ||||||||
Not designated as hedging instruments: | |||||||||||||||||||
Embedded derivatives | 4,096 | — | 4,096 | — | 4,096 | ||||||||||||||
Economic hedges of embedded derivatives | 138 | — | 138 | — | 138 | ||||||||||||||
Foreign currency forward contracts | 9,797 | — | 9,797 | (335 | ) | 9,462 | |||||||||||||
14,031 | — | 14,031 | (335 | ) | 13,696 | ||||||||||||||
Additional netting benefit | — | — | — | (618 | ) | (618 | ) | ||||||||||||
$ | 32,080 | $ | — | $ | 32,080 | $ | (11,237 | ) | $ | 20,843 |
(1) | As presented in the Company's condensed consolidated balance sheets within other current assets, other assets, other current liabilities and other liabilities. |
(2) | The Company enters into master netting agreements with its counterparties for transactions other than embedded derivatives to mitigate credit risk exposure to any single counterparty. Master netting agreements allow for individual derivative contracts with a single counterparty to offset in the event of default. |
Gross Amounts | Gross Amounts Offset in the Balance Sheet | Net Amounts (1) | Gross Amounts not Offset in the Balance Sheet (2) | Net | |||||||||||||||
Assets: | |||||||||||||||||||
Designated as hedging instruments: | |||||||||||||||||||
Cash flow hedges | |||||||||||||||||||
Foreign currency forward and option contracts | $ | 44,570 | $ | — | $ | 44,570 | $ | (1,815 | ) | $ | 42,755 | ||||||||
Net investment hedges | |||||||||||||||||||
Foreign currency forward contracts | 6,930 | — | 6,930 | (3,310 | ) | 3,620 | |||||||||||||
51,500 | — | 51,500 | (5,125 | ) | 46,375 | ||||||||||||||
Not designated as hedging instruments: | |||||||||||||||||||
Embedded derivatives | 9,745 | — | 9,745 | — | 9,745 | ||||||||||||||
Foreign currency forward contracts | 8,734 | — | 8,734 | (1,873 | ) | 6,861 | |||||||||||||
18,479 | — | 18,479 | (1,873 | ) | 16,606 | ||||||||||||||
Additional netting benefit | — | — | — | (2,436 | ) | (2,436 | ) | ||||||||||||
$ | 69,979 | $ | — | $ | 69,979 | $ | (9,434 | ) | $ | 60,545 | |||||||||
Liabilities: | |||||||||||||||||||
Designated as hedging instruments: | |||||||||||||||||||
Cash flow hedges | |||||||||||||||||||
Foreign currency forward and option contracts | $ | 1,815 | $ | — | $ | 1,815 | $ | (1,815 | ) | $ | — | ||||||||
Net investment hedges | |||||||||||||||||||
Foreign currency forward contracts | 3,525 | — | 3,525 | (3,310 | ) | 215 | |||||||||||||
5,340 | — | 5,340 | (5,125 | ) | 215 | ||||||||||||||
Not designated as hedging instruments: | |||||||||||||||||||
Embedded derivatives | 1,525 | — | 1,525 | — | 1,525 | ||||||||||||||
Economic hedges of embedded derivatives | 866 | — | 866 | — | 866 | ||||||||||||||
Foreign currency forward contracts | 3,228 | — | 3,228 | (1,873 | ) | 1,355 | |||||||||||||
5,619 | — | 5,619 | (1,873 | ) | 3,746 | ||||||||||||||
Additional netting benefit | — | — | — | (2,436 | ) | (2,436 | ) | ||||||||||||
$ | 10,959 | $ | — | $ | 10,959 | $ | (9,434 | ) | $ | 1,525 |
(1) | As presented in the Company's condensed consolidated balance sheets within other current assets, other assets, other current liabilities and other liabilities. |
(2) | The Company enters into master netting agreements with its counterparties for transactions other than embedded derivatives to mitigate credit risk exposure to any single counterparty. Master netting agreements allow for individual derivative contracts with a single counterparty to offset in the event of default. |
7. | Fair Value Measurements |
Fair Value at June 30, 2017 | Fair Value Measurement Using | ||||||||||
Level 1 | Level 2 | ||||||||||
Assets: | |||||||||||
Cash | $ | 771,675 | $ | 771,675 | $ | — | |||||
Money market and deposit accounts | 292,102 | 292,102 | — | ||||||||
Publicly traded equity securities | 6,389 | 6,389 | — | ||||||||
Certificates of deposit | 4,242 | — | 4,242 | ||||||||
Derivative instruments (1) | 16,932 | — | 16,932 | ||||||||
Total | $ | 1,091,340 | $ | 1,070,166 | $ | 21,174 | |||||
Liabilities: | |||||||||||
Derivative instruments (1) | $ | 32,080 | $ | — | $ | 32,080 | |||||
Total | $ | 32,080 | $ | — | $ | 32,080 |
(1) | Includes both foreign currency embedded derivatives and foreign currency forward and option contracts. Amounts are included within other current assets, other assets, others current liabilities and other liabilities in the Company’s accompanying condensed consolidated balance sheet. |
Fair Value at December 31, 2016 | Fair Value Measurement Using | ||||||||||
Level 1 | Level 2 | ||||||||||
Assets: | |||||||||||
Cash | $ | 345,119 | $ | 345,119 | $ | — | |||||
Money market and deposit accounts | 400,388 | 400,388 | — | ||||||||
Publicly traded equity securities | 6,463 | 6,463 | — | ||||||||
Certificates of deposit | 9,957 | — | 9,957 | ||||||||
Derivative instruments (1) | 69,979 | — | 69,979 | ||||||||
Total | $ | 831,906 | $ | 751,970 | $ | 79,936 | |||||
Liabilities: | |||||||||||
Derivative instruments (1) | $ | 10,959 | $ | — | $ | 10,959 | |||||
Total | $ | 10,959 | $ | — | $ | 10,959 |
(1) | Includes both foreign currency embedded derivatives and foreign currency forward and option contracts. Amounts are included within other current assets, other assets, other current liabilities and other liabilities in the Company's accompanying condensed consolidated balance sheet. |
8. | Leases |
Capital Lease Obligations | Other Financing Obligations (1) | Total | |||||||||
2017 (6 months remaining) | $ | 42,901 | $ | 44,704 | $ | 87,605 | |||||
2018 | 92,764 | 99,868 | 192,632 | ||||||||
2019 | 85,790 | 87,136 | 172,926 | ||||||||
2020 | 85,879 | 86,409 | 172,288 | ||||||||
2021 | 86,089 | 86,372 | 172,461 | ||||||||
Thereafter | 850,273 | 952,156 | 1,802,429 | ||||||||
Total minimum lease payments | 1,243,696 | 1,356,645 | 2,600,341 | ||||||||
Plus amount representing residual property value | — | 534,139 | 534,139 | ||||||||
Less amount representing interest | (534,399 | ) | (952,857 | ) | (1,487,256 | ) | |||||
Present value of net minimum lease payments | 709,297 | 937,927 | 1,647,224 | ||||||||
Less current portion | (29,632 | ) | (33,305 | ) | (62,937 | ) | |||||
Total | $ | 679,665 | $ | 904,622 | $ | 1,584,287 |
9. | Debt Facilities |
June 30, 2017 | December 31, 2016 | ||||||
Term loans | $ | 2,580,198 | $ | 1,413,582 | |||
Mortgage payable and loans payable | 45,879 | 44,382 | |||||
2,626,077 | 1,457,964 | ||||||
Less amount representing unamortized debt discount and debt issuance cost | (33,593 | ) | (22,811 | ) | |||
Add the amount representing mortgage premium | 1,985 | 1,862 | |||||
2,594,469 | 1,437,015 | ||||||
Less current portion | (83,022 | ) | (67,928 | ) | |||
Total | $ | 2,511,447 | $ | 1,369,087 |
June 30, 2017 | December 31, 2016 | ||||||
4.875% Senior Notes due 2020 | $ | 500,000 | $ | 500,000 | |||
5.375% Senior Notes due 2022 | 750,000 | 750,000 | |||||
5.375% Senior Notes due 2023 | 1,000,000 | 1,000,000 | |||||
5.750% Senior Notes due 2025 | 500,000 | 500,000 | |||||
5.875% Senior Notes due 2026 | 1,100,000 | 1,100,000 | |||||
5.375% Senior Notes due 2027 | 1,250,000 | — | |||||
5,100,000 | 3,850,000 | ||||||
Less amount representing unamortized debt issuance cost | (52,574 | ) | (39,230 | ) | |||
Total | $ | 5,047,426 | $ | 3,810,770 |
• | incur additional debt; |
• | pay dividends or make other restricted payments; |
• | purchase, redeem or retire capital stock or subordinated debt; |
• | make asset sales; |
• | enter into transactions with affiliates; |
• | incur liens; |
• | enter into sale-leaseback transactions; |
• | provide subsidiary guarantees; |
• | make investments; and |
• | merge or consolidate with any other person. |
Redemption Price of the 2027 Notes | ||
2022 | 102.688 | % |
2023 | 101.792 | % |
2024 | 100.896 | % |
2025 and thereafter | 100.000 | % |
• | 1.0% of the principal amount of the 2027 Senior Notes; and |
• | the excess of: (a) the present value at such redemption date of (i) the redemption price of the 2027 Senior Notes at May 15, 2022 (such redemption price as shown in the table above), plus (ii) all required interest payments due on the 2027 Senior Notes through May 15, 2022 (excluding accrued but unpaid interest, if any, to, but not including, the redemption date) computed using a discount rate equal to the treasury rate as of such redemption date plus 50 basis points; over (b) the principal amount of the 2027 Senior Notes, if greater. |
Years ending: | |||
2017 (6 months remaining) | $ | 41,500 | |
2018 | 83,067 | ||
2019 | 381,590 | ||
2020 | 543,467 | ||
2021 | 354,717 | ||
Thereafter | 6,323,721 | ||
Total | $ | 7,728,062 |
June 30, 2017 | December 31, 2016 | ||||||
Mortgage and loans payable | $ | 2,638,356 | $ | 1,461,954 | |||
Senior notes | 5,421,585 | 4,033,985 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest expense | $ | 119,042 | $ | 100,332 | $ | 230,726 | $ | 201,195 | |||||||
Interest capitalized | 7,999 | 3,183 | 14,399 | 5,476 | |||||||||||
Interest charges incurred | $ | 127,041 | $ | 103,515 | $ | 245,125 | $ | 206,671 |
10. | Commitments and Contingencies |
11. | Stockholders' Equity |
Balance as of December 31, 2016 | Net Change | Balance as of June 30, 2017 | |||||||||
Foreign currency translation adjustment ("CTA") gain (loss) | $ | (1,031,129 | ) | $ | 307,921 | $ | (723,208 | ) | |||
Unrealized gain (loss) on cash flow hedges (1) | 30,704 | (39,398 | ) | (8,694 | ) | ||||||
Unrealized gain (loss) on available-for-sale securities (2) | 2,110 | (330 | ) | 1,780 | |||||||
Net investment hedge CTA gain (loss) | 49,989 | (130,398 | ) | (80,409 | ) | ||||||
Net actuarial gain (loss) on defined benefit plans (3) | (816 | ) | 26 | (790 | ) | ||||||
Total | $ | (949,142 | ) | $ | 137,821 | $ | (811,321 | ) |
(1) | Refer to Note 6 for a discussion of the amounts reclassified from accumulated other comprehensive income (loss) to net income (loss). |
(2) | No realized gains and losses were reclassified from accumulated other comprehensive income (loss) to net income (loss) for the six months ended June 30, 2017. |
(3) | The Company has a defined benefit pension plan covering all employees in one country where such plan is mandated by law. The Company does not have any defined benefit plans in any other countries. The unamortized gain (loss) on defined benefit plans includes gains or losses resulting from a change in the value of either the projected benefit obligation or the plan assets resulting from a change in an actuarial assumption, net of amortization. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cost of revenues | $ | 3,178 | $ | 3,441 | $ | 6,089 | $ | 6,438 | |||||||
Sales and marketing | 13,426 | 10,714 | 24,398 | 20,485 | |||||||||||
General and administrative | 29,021 | 25,168 | 53,461 | 46,915 | |||||||||||
Total | $ | 45,625 | $ | 39,323 | $ | 83,948 | $ | 73,838 |
12. | Segment Information |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Adjusted EBITDA: | |||||||||||||||
Americas | $ | 258,151 | $ | 195,028 | $ | 456,770 | $ | 379,488 | |||||||
EMEA | 141,622 | 133,455 | 271,176 | 244,944 | |||||||||||
Asia-Pacific | 109,535 | 91,808 | 208,936 | 176,509 | |||||||||||
Total adjusted EBITDA | 509,308 | 420,291 | 936,882 | 800,941 | |||||||||||
Depreciation, amortization and accretion expense | (252,386 | ) | (213,719 | ) | (471,399 | ) | (415,872 | ) | |||||||
Stock-based compensation expense | (45,625 | ) | (39,323 | ) | (83,948 | ) | (73,838 | ) | |||||||
Acquisition costs | (26,402 | ) | (15,594 | ) | (29,427 | ) | (52,130 | ) | |||||||
Gains on asset sales | — | — | — | 5,242 | |||||||||||
Income from continuing operations | $ | 184,895 | $ | 151,655 | $ | 352,108 | $ | 264,343 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Americas | $ | 533,608 | $ | 413,471 | $ | 970,055 | $ | 817,865 | |||||||
EMEA | 322,944 | 300,609 | 637,791 | 568,465 | |||||||||||
Asia-Pacific | 209,869 | 186,430 | 408,100 | 358,336 | |||||||||||
Total | $ | 1,066,421 | $ | 900,510 | $ | 2,015,946 | $ | 1,744,666 | |||||||
Depreciation and amortization: | |||||||||||||||
Americas | $ | 124,342 | $ | 78,402 | $ | 212,269 | $ | 154,661 | |||||||
EMEA | 78,962 | 82,504 | 155,130 | 158,554 | |||||||||||
Asia-Pacific | 51,482 | 51,145 | 104,393 | 99,370 | |||||||||||
Total | $ | 254,786 | $ | 212,051 | $ | 471,792 | $ | 412,585 | |||||||
Capital expenditures: | |||||||||||||||
Americas | $ | 160,679 | $ | 115,989 | $ | 314,114 | $ | 199,489 | |||||||
EMEA | 151,485 | 86,582 | 235,069 | 143,855 | |||||||||||
Asia-Pacific | 36,408 | 47,296 | 76,631 | 104,223 | |||||||||||
Total | $ | 348,572 | $ | 249,867 | $ | 625,814 | $ | 447,567 |
June 30, 2017 | December 31, 2016 | ||||||
Americas | $ | 4,345,418 | $ | 3,339,518 | |||
EMEA | 2,773,988 | 2,355,943 | |||||
Asia-Pacific | 1,627,189 | 1,503,749 | |||||
Total long-lived assets | $ | 8,746,595 | $ | 7,199,210 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Colocation | $ | 782,231 | $ | 661,228 | $ | 1,473,753 | $ | 1,279,623 | |||||||
Interconnection | 165,684 | 134,059 | 313,744 | 259,646 | |||||||||||
Managed infrastructure | 58,193 | 50,846 | 112,802 | 101,156 | |||||||||||
Other | 3,940 | 5,173 | 8,189 | 7,501 | |||||||||||
Recurring revenues | 1,010,048 | 851,306 | 1,908,488 | 1,647,926 | |||||||||||
Non-recurring revenues | 56,373 | 49,204 | 107,458 | 96,740 | |||||||||||
Total | $ | 1,066,421 | $ | 900,510 | $ | 2,015,946 | $ | 1,744,666 |
13. | Subsequent Events |
• | Overview |
• | Results of Operations |
• | Non-GAAP Financial Measures |
• | Liquidity and Capital Resources |
• | Contractual Obligations and Off-Balance-Sheet Arrangements |
• | Critical Accounting Policies and Estimates |
• | Recent Accounting Pronouncements |
Three Months Ended June 30, | % Change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant Currency | ||||||||||||||
Americas: | |||||||||||||||||||
Recurring revenues | $ | 509,920 | 48 | % | $ | 393,479 | 44 | % | 30 | % | 29 | % | |||||||
Non-recurring revenues | 23,688 | 2 | % | 19,992 | 2 | % | 18 | % | 18 | % | |||||||||
533,608 | 50 | % | 413,471 | 46 | % | 29 | % | 28 | % | ||||||||||
EMEA: | |||||||||||||||||||
Recurring revenues | 304,581 | 29 | % | 281,810 | 31 | % | 8 | % | 14 | % | |||||||||
Non-recurring revenues | 18,363 | 2 | % | 18,799 | 2 | % | (2 | )% | 2 | % | |||||||||
322,944 | 31 | % | 300,609 | 33 | % | 7 | % | 13 | % | ||||||||||
Asia-Pacific: | |||||||||||||||||||
Recurring revenues | 195,547 | 18 | % | 176,017 | 20 | % | 11 | % | 13 | % | |||||||||
Non-recurring revenues | 14,322 | 1 | % | 10,413 | 1 | % | 38 | % | 41 | % | |||||||||
209,869 | 19 | % | 186,430 | 21 | % | 13 | % | 15 | % | ||||||||||
Total: | |||||||||||||||||||
Recurring revenues | 1,010,048 | 95 | % | 851,306 | 95 | % | 19 | % | 21 | % | |||||||||
Non-recurring revenues | 56,373 | 5 | % | 49,204 | 5 | % | 15 | % | 17 | % | |||||||||
$ | 1,066,421 | 100 | % | $ | 900,510 | 100 | % | 18 | % | 21 | % |
Three Months Ended June 30, | % Change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 231,407 | 44 | % | $ | 171,014 | 38 | % | 35 | % | 34 | % | |||||||
EMEA | 175,455 | 34 | % | 169,969 | 37 | % | 3 | % | 9 | % | |||||||||
Asia-Pacific | 115,341 | 22 | % | 115,984 | 25 | % | (1 | )% | 1 | % | |||||||||
Total | $ | 522,203 | 100 | % | $ | 456,967 | 100 | % | 14 | % | 17 | % |
Three Months Ended June 30, | |||||
2017 | 2016 | ||||
Cost of revenues as a percentage of revenues: | |||||
Americas | 43 | % | 41 | % | |
EMEA | 54 | % | 57 | % | |
Asia-Pacific | 55 | % | 62 | % | |
Total | 49 | % | 51 | % |
Three Months Ended June 30, | % Change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 85,740 | 60 | % | $ | 57,256 | 53 | % | 50 | % | 49 | % | |||||||
EMEA | 36,277 | 26 | % | 34,203 | 32 | % | 6 | % | 14 | % | |||||||||
Asia-Pacific | 19,549 | 14 | % | 16,373 | 15 | % | 19 | % | 22 | % | |||||||||
Total | $ | 141,566 | 100 | % | $ | 107,832 | 100 | % | 31 | % | 34 | % |
Three Months Ended June 30, | |||||
2017 | 2016 | ||||
Sales and marketing expenses as a percentage of revenues: | |||||
Americas | 16 | % | 14 | % | |
EMEA | 11 | % | 11 | % | |
Asia-Pacific | 9 | % | 9 | % | |
Total | 13 | % | 12 | % |
Three Months Ended June 30, | % Change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 116,986 | 62 | % | $ | 96,837 | 57 | % | 21 | % | 21 | % | |||||||
EMEA | 54,319 | 28 | % | 52,971 | 31 | % | 3 | % | 11 | % | |||||||||
Asia-Pacific | 20,050 | 10 | % | 18,654 | 12 | % | 7 | % | 10 | % | |||||||||
Total | $ | 191,355 | 100 | % | $ | 168,462 | 100 | % | 14 | % | 16 | % |
Three Months Ended June 30, | |||||
2017 | 2016 | ||||
General and administrative expenses as a percentage of revenues: | |||||
Americas | 22 | % | 23 | % | |
EMEA | 17 | % | 18 | % | |
Asia-Pacific | 10 | % | 10 | % | |
Total | 18 | % | 19 | % |
Three Months Ended June 30, | % Change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 75,039 | 40 | % | $ | 87,100 | 58 | % | (14 | )% | (14 | )% | |||||||
EMEA | 54,927 | 30 | % | 29,096 | 19 | % | 89 | % | 92 | % | |||||||||
Asia-Pacific | 54,929 | 30 | % | 35,459 | 23 | % | 55 | % | 58 | % | |||||||||
Total | $ | 184,895 | 100 | % | $ | 151,655 | 100 | % | 22 | % | 23 | % |
Three Months Ended June 30, | % Change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 258,151 | 50 | % | $ | 195,028 | 46 | % | 32 | % | 32 | % | |||||||
EMEA | 141,622 | 28 | % | 133,455 | 32 | % | 6 | % | 12 | % | |||||||||
Asia-Pacific | 109,535 | 22 | % | 91,808 | 22 | % | 19 | % | 22 | % | |||||||||
Total | $ | 509,308 | 100 | % | $ | 420,291 | 100 | % | 21 | % | 23 | % |
Six Months Ended June 30, | % change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant currency | ||||||||||||||
Americas: | |||||||||||||||||||
Recurring revenues | $ | 926,023 | 46 | % | $ | 773,635 | 44 | % | 20 | % | 19 | % | |||||||
Non-recurring revenues | 44,032 | 2 | % | 44,230 | 3 | % | — | % | (1 | )% | |||||||||
970,055 | 48 | % | 817,865 | 47 | % | 19 | % | 18 | % | ||||||||||
EMEA: | |||||||||||||||||||
Recurring revenues | 601,188 | 30 | % | 535,191 | 31 | % | 12 | % | 19 | % | |||||||||
Non-recurring revenues | 36,603 | 2 | % | 33,274 | 2 | % | 10 | % | 16 | % | |||||||||
637,791 | 32 | % | 568,465 | 33 | % | 12 | % | 19 | % | ||||||||||
Asia-Pacific: | |||||||||||||||||||
Recurring revenues | 381,277 | 19 | % | 339,100 | 19 | % | 12 | % | 13 | % | |||||||||
Non-recurring revenues | 26,823 | 1 | % | 19,236 | 1 | % | 39 | % | 40 | % | |||||||||
408,100 | 20 | % | 358,336 | 20 | % | 14 | % | 15 | % | ||||||||||
Total: | |||||||||||||||||||
Recurring revenues | 1,908,488 | 95 | % | 1,647,926 | 94 | % | 16 | % | 18 | % | |||||||||
Non-recurring revenues | 107,458 | 5 | % | 96,740 | 6 | % | 11 | % | 13 | % | |||||||||
$ | 2,015,946 | 100 | % | $ | 1,744,666 | 100 | % | 16 | % | 17 | % |
Six Months Ended June 30, | % change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant currency | ||||||||||||||
Americas | $ | 410,454 | 42 | % | $ | 341,140 | 39 | % | 20 | % | 19 | % | |||||||
EMEA | 348,615 | 35 | % | 321,731 | 36 | % | 8 | % | 15 | % | |||||||||
Asia-Pacific | 232,095 | 23 | % | 221,776 | 25 | % | 5 | % | 5 | % | |||||||||
Total | $ | 991,164 | 100 | % | $ | 884,647 | 100 | % | 12 | % | 14 | % |
Six Months Ended June 30, | |||||
2017 | 2016 | ||||
Cost of revenues as a percentage of revenues: | |||||
Americas | 42 | % | 42 | % | |
EMEA | 55 | % | 57 | % | |
Asia-Pacific | 57 | % | 62 | % | |
Total | 49 | % | 51 | % |
Six Months Ended June 30, | % change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant currency | ||||||||||||||
Americas | $ | 152,389 | 56 | % | $ | 115,009 | 53 | % | 33 | % | 32 | % | |||||||
EMEA | 77,948 | 29 | % | 66,054 | 31 | % | 18 | % | 28 | % | |||||||||
Asia-Pacific | 40,156 | 15 | % | 33,359 | 16 | % | 20 | % | 21 | % | |||||||||
Total | $ | 270,493 | 100 | % | $ | 214,422 | 100 | % | 26 | % | 29 | % |
Six Months Ended June 30, | |||||
2017 | 2016 | ||||
Sales and marketing expenses as a percentage of revenues: | |||||
Americas | 16 | % | 14 | % | |
EMEA | 12 | % | 12 | % | |
Asia-Pacific | 10 | % | 9 | % | |
Total | 13 | % | 12 | % |
Six Months Ended June 30, | % change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant currency | ||||||||||||||
Americas | $ | 225,320 | 60 | % | $ | 189,941 | 57 | % | 19 | % | 18 | % | |||||||
EMEA | 107,636 | 29 | % | 108,448 | 32 | % | (1 | )% | 8 | % | |||||||||
Asia-Pacific | 39,798 | 11 | % | 35,977 | 11 | % | 11 | % | 12 | % | |||||||||
Total | $ | 372,754 | 100 | % | $ | 334,366 | 100 | % | 11 | % | 14 | % |
Six Months Ended June 30, | |||||
2017 | 2016 | ||||
General and administrative expenses as a percentage of revenues: | |||||
Americas | 23 | % | 23 | % | |
EMEA | 17 | % | 19 | % | |
Asia-Pacific | 10 | % | 10 | % | |
Total | 18 | % | 19 | % |
Six Months Ended June 30, | % change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant currency | ||||||||||||||
Americas | $ | 156,149 | 45 | % | $ | 175,639 | 67 | % | (11 | )% | (12 | )% | |||||||
EMEA | 99,908 | 28 | % | 21,677 | 8 | % | 361 | % | 367 | % | |||||||||
Asia-Pacific | 96,051 | 27 | % | 67,027 | 25 | % | 43 | % | 44 | % | |||||||||
Total | $ | 352,108 | 100 | % | $ | 264,343 | 100 | % | 33 | % | 34 | % |
Six Months Ended June 30, | % change | ||||||||||||||||||
2017 | % | 2016 | % | Actual | Constant currency | ||||||||||||||
Americas | $ | 456,770 | 49 | % | $ | 379,488 | 47 | % | 20 | % | 19 | % | |||||||
EMEA | 271,176 | 29 | % | 244,944 | 31 | % | 11 | % | 17 | % | |||||||||
Asia-Pacific | 208,936 | 22 | % | 176,509 | 22 | % | 18 | % | 19 | % | |||||||||
Total | $ | 936,882 | 100 | % | $ | 800,941 | 100 | % | 17 | % | 19 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income from continuing operations | $ | 184,895 | $ | 151,655 | $ | 352,108 | $ | 264,343 | |||||||
Depreciation, amortization, and accretion expense | 252,386 | 213,719 | 471,399 | 415,872 | |||||||||||
Stock-based compensation expense | 45,625 | 39,323 | 83,948 | 73,838 | |||||||||||
Acquisition costs | 26,402 | 15,594 | 29,427 | 52,130 | |||||||||||
Gains on asset sales | — | — | — | (5,242 | ) | ||||||||||
Adjusted EBITDA | $ | 509,308 | $ | 420,291 | $ | 936,882 | $ | 800,941 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 45,805 | $ | 44,711 | $ | 87,867 | $ | 13,600 | |||||||
Adjustments: | |||||||||||||||
Real estate depreciation and amortization | 175,387 | 158,727 | 334,801 | 309,722 | |||||||||||
Gain on disposition of real estate property | (1,460 | ) | (1,951 | ) | (2,098 | ) | (5,988 | ) | |||||||
Adjustments for FFO from unconsolidated joint ventures | 28 | 28 | 56 | 56 | |||||||||||
FFO | $ | 219,760 | $ | 201,515 | $ | 420,626 | $ | 317,390 | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
FFO | $ | 219,760 | $ | 201,515 | $ | 420,626 | $ | 317,390 | |||||||
Adjustments: | |||||||||||||||
Installation revenue adjustment | 6,939 | 7,407 | 11,614 | 10,761 | |||||||||||
Straight-line rent expense adjustment | 1,015 | 1,895 | 3,424 | 3,028 | |||||||||||
Amortization of deferred financing costs | 4,130 | 5,243 | 15,710 | 10,751 | |||||||||||
Stock-based compensation expense | 45,625 | 39,323 | 83,948 | 73,838 | |||||||||||
Non-real estate depreciation expense | 29,241 | 21,021 | 57,816 | 42,408 | |||||||||||
Amortization expense | 50,158 | 32,303 | 79,175 | 60,455 | |||||||||||
Accretion expense (gain) | (2,400 | ) | 1,668 | (393 | ) | 3,287 | |||||||||
Recurring capital expenditures | (37,869 | ) | (31,928 | ) | (60,541 | ) | (63,743 | ) | |||||||
Loss on debt extinguishment | 16,444 | 605 | 19,947 | 605 | |||||||||||
Acquisition costs | 26,402 | 15,594 | 29,427 | 52,130 | |||||||||||
Income tax expense adjustment | 674 | 1,301 | 3,483 | 1,111 | |||||||||||
Adjustments for AFFO from unconsolidated joint ventures | (5 | ) | (9 | ) | (12 | ) | (21 | ) | |||||||
Net income from discontinued operations, net of tax | — | (5,409 | ) | — | (11,625 | ) | |||||||||
AFFO | $ | 360,114 | $ | 290,529 | $ | 664,224 | $ | 500,375 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
(dollars in thousands) | |||||||
Net cash provided by operating activities | $ | 553,844 | $ | 383,098 | |||
Net cash used in investing activities | (4,253,082 | ) | (2,042,003 | ) | |||
Net cash provided by (used in) financing activities | 4,012,349 | (546,293 | ) |
2017 (6 months) | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||||||||
Term loans (1) | $ | 39,918 | $ | 79,835 | $ | 378,264 | $ | 40,045 | $ | 351,195 | $ | 1,690,942 | $ | 2,580,199 | |||||||||||||
Senior notes (1) | — | — | — | 500,000 | — | 4,600,000 | 5,100,000 | ||||||||||||||||||||
Interest (2) | 179,597 | 356,722 | 354,830 | 334,105 | 319,824 | 958,016 | 2,503,094 | ||||||||||||||||||||
Capital lease and other financing obligations (3) | 87,605 | 192,632 | 172,926 | 172,288 | 172,461 | 1,802,429 | 2,600,341 | ||||||||||||||||||||
Operating leases (4) | 78,992 | 157,993 | 151,319 | 141,224 | 132,611 | 1,150,491 | 1,812,630 | ||||||||||||||||||||
Other contractual commitments (5) | 683,509 | 103,670 | 51,296 | 13,737 | 10,590 | 100,670 | 963,472 | ||||||||||||||||||||
Asset retirement obligations (6) | 1,800 | 3,239 | 13,995 | 10,650 | 4,595 | 81,617 | 115,896 | ||||||||||||||||||||
$ | 1,071,421 | $ | 894,091 | $ | 1,122,630 | $ | 1,212,049 | $ | 991,276 | $ | 10,384,165 | $ | 15,675,632 |
(1) | Represents principal only. |
(2) | Represents interest on mortgage payable, loans payable, senior notes and term loans based on their approximate interest rates as of June 30, 2017. |
(3) | Represents principal and interest. |
(4) | Represents minimum operating lease payments, excluding potential lease renewals. |
(5) | Represents off-balance sheet arrangements. Other contractual commitments are described below. |
(6) | Represents liability, net of future accretion expense. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
• | retaining relationships with key customers, landlords and suppliers of the acquired business, some of which may terminate their contracts with the Business as a result of the Acquisition or which may attempt to negotiate changes in their current or future business relationships with us; |
• | expanding our relationships with U.S. government customers, which will subject us to complex regulatory and compliance requirements and risks with which we have limited experience; |
• | integrating or migrating IT systems, which may create a risk of errors or performance problems and could affect our ability to meet customer service level obligations; |
• | our reliance on transition services from Verizon to operate the Business, and our need to develop sustainable alternative arrangements upon expiration or interruption of those transition services; |
• | the diversion of management's attention from ongoing business concerns and performance shortfalls at Equinix as a result of the devotion of management's attention to the Acquisition; |
• | managing a larger company; |
• | integrating two unique corporate cultures; |
• | retaining key employees, who may experience uncertainty associated with the Acquisition and who may depart after the Acquisition because of issues relating to the uncertainty and difficulty of the integration or a desire not to remain with us following the Acquisition; and |
• | unforeseen expenses or delays associated with the Acquisition. |
• | we will not be allowed a deduction for distributions to stockholders in computing our taxable income; |
• | we will be subject to federal and state income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate tax rates; and |
• | we would not be eligible to elect REIT status again until the fifth taxable year that begins after the first year for which we failed to qualify as a REIT. |
• | the possible disruption of our ongoing business and diversion of management's attention by acquisition, transition and integration activities, particularly when multiple acquisitions and integrations are occurring at the same time; |
• | our potential inability to successfully pursue or realize some or all of the anticipated revenue opportunities associated with an acquisition or investment; |
• | the possibility that we may not be able to successfully integrate acquired businesses, or businesses in which we invest, or achieve anticipated operating efficiencies or cost savings; |
• | the possibility that announced acquisitions may not be completed, due to failure to satisfy the conditions to closing or for other reasons; |
• | the dilution of our existing stockholders as a result of our issuing stock in transactions, such as in connection with our acquisitions of Switch & Data Facilities Company, Inc. in 2010 and TelecityGroup in 2016; |
• | the possibility of customer dissatisfaction if we are unable to achieve levels of quality and stability on par with past practices; |
• | the potential deterioration to our ability to access credit markets due to increased leverage; |
• | the possibility that our customers may not accept either the existing equipment infrastructure or the "look-and-feel" of a new or different IBX data center; |
• | the possibility that additional capital expenditures may be required or that transaction expenses associated with acquisitions may be higher than anticipated; |
• | the possibility that required financing to fund an acquisition may not be available on acceptable terms or at all; |
• | the possibility that we may be unable to obtain required approvals from governmental authorities under antitrust and competition laws on a timely basis or at all, which could, among other things, delay or prevent us from completing an acquisition, limit our ability to realize the expected financial or strategic benefits of an acquisition or have other adverse effects on our current business and operations; |
• | the possible loss or reduction in value of acquired businesses; |
• | the possibility that future acquisitions may present new complexities in deal structure, related complex accounting and coordination with new partners, particularly in light of our desire to maintain our qualification for taxation as a REIT; |
• | the possibility that future acquisitions may be in geographies and regulatory environments to which we are unaccustomed; |
• | the possibility that carriers may find it cost-prohibitive or impractical to bring fiber and networks into a new IBX data center; |
• | the possibility of litigation or other claims in connection with, or as a result of, an acquisition, including claims from terminated employees, customers, former stockholders or other third parties; |
• | the possibility that asset divestments may be required in order to obtain regulatory clearance for a transaction; and |
• | the possibility of pre-existing undisclosed liabilities, including, but not limited to, lease or landlord related liability, environmental liability or asbestos liability, for which insurance coverage may be insufficient or unavailable, or other issues not discovered in the diligence process. |
• | require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt and in respect of other off-balance sheet arrangements, reducing the availability of our cash flow to fund future capital expenditures, working capital, execution of our expansion strategy and other general corporate requirements; |
• | increase the likelihood of negative outlook from our rating agencies; |
• | make it more difficult for us to satisfy our obligations under our various debt instruments; |
• | increase our cost of borrowing and even limit our ability to access additional debt to fund future growth; |
• | increase our vulnerability to general adverse economic and industry conditions and adverse changes in governmental regulations; |
• | limit our flexibility in planning for, or reacting to, changes in our business and industry, which may place us at a competitive disadvantage compared with our competitors; |
• | limit our operating flexibility through covenants with which we must comply, such as limiting our ability to repurchase shares of our common stock; |
• | limit our ability to borrow additional funds, even when necessary to maintain adequate liquidity, which would also limit our ability to further expand our business; and |
• | make us more vulnerable to increases in interest rates because of the variable interest rates on some of our borrowings to the extent we have not entirely hedged such variable rate debt. |
• | the costs of customizing IBX data centers for foreign countries; |
• | protectionist laws and business practices favoring local competition; |
• | greater difficulty or delay in accounts receivable collection; |
• | difficulties in staffing and managing foreign operations, including negotiating with foreign labor unions or workers’ councils; |
• | difficulties in managing across cultures and in foreign languages; |
• | political and economic instability; |
• | fluctuations in currency exchange rates; |
• | difficulties in repatriating funds from certain countries; |
• | our ability to obtain, transfer, or maintain licenses required by governmental entities with respect to our business; |
• | unexpected changes in regulatory, tax and political environments; |
• | our ability to secure and maintain the necessary physical and telecommunications infrastructure; |
• | compliance with anti-bribery and corruption laws; |
• | compliance with economic and trade sanctions enforced by the Office of Foreign Assets Control of the U.S. Department of Treasury; and |
• | compliance with evolving governmental regulation with which we have little experience. |
• | our operating results or forecasts; |
• | new issuances of equity, debt or convertible debt by us, including through our ATM Program; |
• | increases in market interest rates and changes in other general market and economic conditions, including inflationary concerns; |
• | changes to our capital allocation, tax planning or business strategy; |
• | our qualification for taxation as a REIT and our declaration of distributions to our stockholders; |
• | a stock repurchase program; |
• | developments in our relationships with corporate customers; |
• | announcements by our customers or competitors; |
• | changes in regulatory policy or interpretation; |
• | governmental investigations; |
• | changes in the ratings of our debt or stock by rating agencies or securities analysts; |
• | our purchase or development of real estate and/or additional IBX data centers; |
• | our acquisitions of complementary businesses; or |
• | the operational performance of our IBX data centers. |
• | human error; |
• | equipment failure; |
• | physical, electronic and cyber security breaches; |
• | fire, earthquake, hurricane, flood, tornado and other natural disasters; |
• | extreme temperatures; |
• | water damage; |
• | fiber cuts; |
• | power loss; |
• | terrorist acts; |
• | sabotage and vandalism; and |
• | failure of business partners who provide our resale products. |
• | fluctuations of foreign currencies in the markets in which we operate; |
• | the timing and magnitude of depreciation and interest expense or other expenses related to the acquisition, purchase or construction of additional IBX data centers or the upgrade of existing IBX data centers; |
• | demand for space, power and services at our IBX data centers; |
• | changes in general economic conditions, such as an economic downturn, or specific market conditions in the telecommunications and internet industries, both of which may have an impact on our customer base; |
• | charges to earnings resulting from past acquisitions due to, among other things, impairment of goodwill or intangible assets, reduction in the useful lives of intangible assets acquired, identification of additional assumed contingent liabilities or revised estimates to restructure an acquired company's operations; |
• | the duration of the sales cycle for our offerings and our ability to ramp our newly-hired sales persons to full productivity within the time period we have forecasted; |
• | restructuring charges or reversals of restructuring charges, which may be necessary due to revised sublease assumptions, changes in strategy or otherwise; |
• | acquisitions or dispositions we may make; |
• | the financial condition and credit risk of our customers; |
• | the provision of customer discounts and credits; |
• | the mix of current and proposed products and offerings and the gross margins associated with our products and offerings; |
• | the timing required for new and future IBX data centers to open or become fully utilized; |
• | competition in the markets in which we operate; |
• | conditions related to international operations; |
• | increasing repair and maintenance expenses in connection with aging IBX data centers; |
• | lack of available capacity in our existing IBX data centers to generate new revenue or delays in opening new or acquired IBX data centers that delay our ability to generate new revenue in markets which have otherwise reached capacity; |
• | changes in rent expense as we amend our IBX data center leases in connection with extending their lease terms when their initial lease term expiration dates approach or changes in shared operating costs in connection with our leases, which are commonly referred to as common area maintenance expenses; |
• | the timing and magnitude of other operating expenses, including taxes, expenses related to the expansion of sales, marketing, operations and acquisitions, if any, of complementary businesses and assets; |
• | the cost and availability of adequate public utilities, including power; |
• | changes in employee stock-based compensation; |
• | overall inflation; |
• | increasing interest expense due to any increases in interest rates and/or potential additional debt financings; |
• | changes in our tax planning strategies or failure to realize anticipated benefits from such strategies; |
• | changes in income tax benefit or expense; and |
• | changes in or new U.S. GAAP as periodically released by the Financial Accounting Standards Board ("FASB"). |
• | ownership limitations and transfer restrictions relating to our stock that are intended to facilitate our compliance with certain REIT rules relating to share ownership; |
• | authorization for the issuance of "blank check" preferred stock; |
• | the prohibition of cumulative voting in the election of directors; |
• | limits on the persons who may call special meetings of stockholders; |
• | limits on stockholder action by written consent; and |
• | advance notice requirements for nominations to the Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosure |
Item 5. | Other Information |
Item 6. | Exhibits |
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed Herewith | |||
2.1 | Rule 2.7 Announcement, dated as of May 29, 2015. Recommended Cash and Share Offer for Telecity Group plc by Equinix, Inc. | 8-K | 5/29/2015 | 2.1 | ||||
2.2 | Cooperation Agreement, dated as of May 29, 2015, by and between Equinix, Inc. and Telecity Group plc. | 8-K | 5/29/2015 | 2.2 | ||||
2.3 | Amendment to Cooperation Agreement, dated as of November 24, 2015, by and between Equinix, Inc. and Telecity Group plc. | 10-K | 12/31/2015 | 2.3 | ||||
2.4 | Transaction Agreement, dated as of December 6, 2016, by and between Verizon Communications Inc. and Equinix, Inc. and Telecity Group plc. | 8-K | 12/6/2016 | 2.1 | ||||
2.5 | Amendment No.1 to the Transaction Agreement, dated February 23, 2017, by and between Verizon communications Inc. and Equinix, Inc. | 10-K | 12/31/2016 | 2.5 | ||||
2.6 | Amendment No.2 to the Transaction Agreement, dated April 30, 2017, by and between Verizon Communications Inc. and Equinix, Inc. | 8-K | 5/1/2017 | 2.1 | ||||
3.1 | Amended and Restated Certificate of Incorporation of the Registrant, as amended to date. | 10-K/A | 12/31/2002 | 3.1 | ||||
3.2 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant | 8-K | 6/14/2011 | 3.1 | ||||
3.3 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant | 8-K | 6/11/2013 | 3.1 | ||||
3.4 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant | 10-Q | 6/30/2014 | 3.4 | ||||
3.5 | Certificate of Designation of Series A and Series A-1 Convertible Preferred Stock. | 10-K/A | 12/31/2002 | 3.3 | ||||
3.6 | Amended and Restated Bylaws of the Registrant. | 8-K | 3/29/2016 | 3.1 | ||||
4.1 | Reference is made to Exhibits 3.1, 3.2, 3.3, 3.4, 3.5 and 3.6. | |||||||
4.2 | Indenture for the 2020 Notes dated March 5, 2013 by and between Equinix, Inc. and U.S. Bank National Association as trustee | 8-K | 3/5/2013 | 4.1 | ||||
4.3 | Form of 4.875% Senior Note Due 2020 (see Exhibit 4.2). | 8-K | 3/5/2013 | 4.2 | ||||
4.4 | Indenture for the 2023 Notes dated March 5, 2013 by and between Equinix, Inc. and U.S. Bank National Association as trustee | 8-K | 3/5/2013 | 4.1 | ||||
4.5 | Form of 5.375% Senior Note due 2023 (see Exhibit 4.4) | |||||||
4.6 | Indenture, dated as of November 20, 2014, between Equinix, Inc. and U.S. Bank National Association, as trustee | 8-K | 11/20/2014 | 4.1 | ||||
4.7 | First Supplemental Indenture, dated as of November 20, 2014, between Equinix, Inc. and U.S. Bank National Association, as trustee | 8-K | 11/20/2014 | 4.2 | ||||
4.8 | Form of 5.375% Senior Note due 2022 (see Exhibit 4.7) | |||||||
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed Herewith | |||
4.9 | Second Supplemental Indenture, dated as of November 20, 2014, between Equinix, Inc. and U.S. Bank National Association, as trustee | 8-K | 11/20/2014 | 4.4 | ||||
4.10 | Form of 5.750% Senior Note due 2025 (see Exhibit 4.9) | |||||||
4.11 | Third Supplemental Indenture, dated as of December 4, 2015, between Equinix Inc. and U.S. Bank National Association, as trustee | 8-K | 12/4/2015 | 4.2 | ||||
4.12 | Form of 5.875% Senior Note due 2026 (See Exhibit 4.11) | |||||||
4.13 | Fourth Supplemental Indenture, dated as of March 22, 2017 between Equinix, Inc. and U.S. Bank National Association, as trustee | 8-K | 3/22/2017 | 4.2 | ||||
4.14 | Form of 5.375% Senior Notes due 2027 | 8-K | 3/22/2017 | 4.3 | ||||
4.15 | Form of Registrant's Common Stock Certificate | 10-K | 12/31/2014 | 4.13 | ||||
10.1** | Form of Indemnification Agreement between the Registrant and each of its officers and directors. | S-4 (File No. 333-93749) | 12/29/1999 | 10.5 | ||||
10.2** | 2000 Equity Incentive Plan, as amended. | 10-K | 12/31/2016 | 10.2 | ||||
10.3** | 2000 Director Option Plan, as amended. | 10-K | 12/31/2016 | 10.3 | ||||
10.4** | 2001 Supplemental Stock Plan, as amended. | 10-K | 12/31/2016 | 10.4 | ||||
10.5** | Equinix, Inc. 2004 Employee Stock Purchase Plan, as amended. | 10-Q | 6/30/2014 | 10.5 | ||||
10.6** | Severance Agreement by and between Stephen Smith and Equinix, Inc. dated December 18, 2008. | 10-K | 12/31/2008 | 10.31 | ||||
10.7** | Severance Agreement by and between Peter Van Camp and Equinix, Inc. dated December 10, 2008. | 10-K | 12/31/2008 | 10.32 | ||||
10.8** | Severance Agreement by and between Keith Taylor and Equinix, Inc. dated December 19, 2008. | 10-K | 12/31/2008 | 10.33 | ||||
10.9** | Change in Control Severance Agreement by and between Eric Schwartz and Equinix, Inc. dated December 19, 2008. | 10-K | 12/31/2008 | 10.35 | ||||
10.10** | Switch & Data 2007 Stock Incentive Plan. | S-1/A (File No. 333-137607) filed by Switch & Data Facilities Company, Inc. | 2/5/2007 | 10.9 | ||||
10.11** | Change in Control Severance Agreement by and between Charles Meyers and Equinix, Inc. dated September 30, 2010. | 10-Q | 9/30/2010 | 10.42 | ||||
10.12** | Form of amendment to existing severance agreement between the Registrant and each of Messrs. Meyers, Smith, Taylor and Van Camp. | 10-K | 12/31/2010 | 10.33 | ||||
10.13** | Letter amendment, dated December 14, 2010, to Change in Control Severance Agreement, dated December 18, 2008, and letter agreement relating to expatriate benefits, dated April 22, 2008, as amended, by and between the Registrant and Eric Schwartz. | 10-K | 12/31/2010 | 10.34 | ||||
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed Herewith | |||
10.14** | International Long-Term Assignment Letter by and between Equinix, Inc. and Eric Schwartz, dated May 21, 2013. | 10-Q | 6/30/2013 | 10.51 | ||||
10.15** | Employment Agreement by and between Equinix (EMEA) B.V. and Eric Schwartz, dated as of August 7, 2013. | 10-Q | 9/30/2013 | 10.54 | ||||
10.16** | Restricted Stock Unit Agreement dated August 14, 2013 for Charles Meyers under the Equinix, Inc. 2000 Equity Incentive Plan. | 10-Q | 9/30/2013 | 10.55 | ||||
10.17** | Offer Letter from Equinix, Inc. to Karl Strohmeyer dated October 28, 2013. | 10-Q | 3/31/2014 | 10.49 | ||||
10.18** | Restricted Stock Unit Agreement for Karl Strohmeyer under the Equinix, Inc. 2000 Equity Incentive Plan. | 10-Q | 3/31/2014 | 10.50 | ||||
10.19** | Change in Control Severance Agreement by and between Karl Strohmeyer and Equinix, Inc. dated December 2, 2013. | 10-Q | 3/31/2014 | 10.51 | ||||
10.20** | 2014 Form of Revenue/Adjusted EBITDA Restricted Stock Unit Agreement for CEO and CFO. | 10-Q | 3/31/2014 | 10.52 | ||||
10.21** | 2014 Form of Revenue/Adjusted EBITDA Restricted Stock Unit Agreement for all other Section 16 officers. | 10-Q | 3/31/2014 | 10.53 | ||||
10.22 | Agreement for Purchase and Sale of Shares Among RW Brasil Fundo de Investimentos em Participação, Antônio Eduardo Zago De Carvalho and Sidney Victor da Costa Breyer, as Sellers, and Equinix Brasil Participaçãoes Ltda., as Purchaser, and Equinix South America Holdings LLC., as a Party for Limited Purposes and ALOG Soluções de Tecnologia em Informática S.A. as Intervening Consenting Party dated July 18, 2014 | 10-Q | 9/30/2014 | 10.67 | ||||
10.23 | Credit Agreement, by and among Equinix, Inc., as borrower, Equinix LLC and Switch & Data LLC as guarantors, the Lenders (defined therein), Bank of America, N.A., as administrative agent, a Lender and L/C issuer, JPMorgan Chase Bank, N.A., and TD Securities (USA) LLC, as co-syndication agents, Barclays Bank PLC, Citibank, N.A., Royal Bank of Canada and ING Bank N.V., Singapore Branch, as Co-Documentation Agents and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and TD Securities (USA) LLC, as joint lead arrangers and book runners, dated December 17, 2014. | 10-K | 12/31/2014 | 10.48 | ||||
10.24** | 2015 Form of Revenue/AFFO Restricted Stock Unit Agreement for Executives. | 10-Q | 3/31/2015 | 10.50 | ||||
10.25** | 2015 Form of TSR Restricted Stock Unit Agreement for Executives. | 10-Q | 3/31/2015 | 10.51 | ||||
10.26** | 2015 Form of Time-Based Restricted Stock Unit Agreement for Executives. | 10-Q | 3/31/2015 | 10.52 | ||||
10.27 | First Amendment to Credit Agreement and first Amendment to Pledge and Security Agreement by and among Equinix, Inc., as borrower, the Guarantors (defined therein), the Lenders (defined therein) and Bank of America, N.A., as administrative agent, dated April 30, 2015. | 10-Q | 9/30/2015 | 10.52 | ||||
10.30 | Second Amendment to Credit Agreement by and among Equinix, Inc., as borrower, the Guarantors (defined therein), the Lenders (defined therein) and Bank of America, N.A., as administrative agent, dated December 8, 2015. | 10-K | 12/31/2015 | 10.55 | ||||
10.31** | Equinix, Inc. 2016 Incentive Plan | 10-Q | 3/31/2016 | 10.56 |
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed Herewith | |||
10.32** | 2016 Form of Revenue/AFFO Restricted Stock Unit Agreement for Executives. | 10-Q | 3/31/2016 | 10.57 | ||||
10.33** | 2016 Form of TSR Restricted Stock Unit Agreement for Executives. | 10-Q | 3/31/2016 | 10.58 | ||||
10.34** | 2016 Form of Time-Based Restricted Stock Unit Agreement for Executives. | 10-Q | 3/31/2016 | 10.59 | ||||
10.35** | 2017 Form of Revenue/AFFO Restricted Stock Unit Agreement for Executives. | 10-Q | 3/31/2017 | 10.35 | ||||
10.36** | 2017 Form of TSR Restricted Stock Unit Agreement for Executives. | 10-Q | 3/31/2017 | 10.36 | ||||
10.37** | 2017 Form of Time-Based Restricted Stock Unit Agreement for Executives. | 10-Q | 3/31/2017 | 10.37 | ||||
10.38** | Restricted Stock Unit Award granted to John Hughes on February 25, 2016 | 10-Q | 3/31/2016 | 10.60 | ||||
10.39** | Equinix, Inc. Annual Incentive Plan | 10-Q | 3/31/2017 | 10.39 | ||||
10.40** | Equinix, Inc. Annual Incentive Plan 2017 Award Agreement for Executive Staff Employees | 10-Q | 3/31/2017 | 10.40 | ||||
10.41 | Share Purchase Agreement with Digital Realty Trust, L.P., relating to the sale and purchase of shares in TelecityGroup UK LON Limited, Telecity Netherlands AMS01 AMS04 BV, Equinix Real Estate (TCY AMS04) B.V. and TelecityGroup Germany Fra2 GmbH, dated May 14, 2016. | 10-Q | 6/30/2016 | 10.55 | ||||
10.42** | Letter Agreement dated June 9, 2016, by and between Equinix, Inc. and Eric Schwartz, amending his International Long Term Assignment letter dated May 21, 2013 and Employment Agreement with Equinix (EMEA) B.V. dated August 7, 2013. | 10-Q | 9/30/2016 | 10.56 | ||||
10.43** | Term Loan Agreement dated as of September 30, 2016 among Equinix Japan K.K. as Borrower, the Lenders (defined therein) and Bank of Tokyo-Mitsubishi UFJ, Ltd., as Arranger and Agent. | 10-Q | 9/30/2016 | 10.42 | ||||
10.44 | Third Amendment to Credit Agreement and Second Amendment to Pledge and Security Agreement by and among Equinix, Inc., as borrower, the Guarantors (defined therein), the Lenders (defined therein) and Bank of America, N.A., as administrative agent, dated December 22, 2016. | 10-K | 12/31/2016 | 10.39 | ||||
12.1 | Statement of Computation of Ratios | 10-K | 12/31/2016 | 12.1 | ||||
X | ||||||||
X | ||||||||
X | ||||||||
X | ||||||||
101.INS | XBRL Instance Document. | X | ||||||
101.SCH | XBRL Taxonomy Extension Schema Document. | X | ||||||
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed Herewith | |||
101.CAL | XBRL Taxonomy Extension Calculation Document. | X | ||||||
101.DEF | XBRL Taxonomy Extension Definition Document. | X | ||||||
101.LAB | XBRL Taxonomy Extension Labels Document. | X | ||||||
101.PRE | XBRL Taxonomy Extension Presentation Document. | X |
EQUINIX, INC. | ||
Date: August 4, 2017 | ||
By: | /s/ KEITH D. TAYLOR | |
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
Exhibit Number | Description of Document |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema Document. |
101.CAL | XBRL Taxonomy Extension Calculation Document. |
101.DEF | XBRL Taxonomy Extension Definition Document. |
101.LAB | XBRL Taxonomy Extension Labels Document. |
101.PRE | XBRL Taxonomy Extension Presentation Document. |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Aug. 03, 2017 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | EQUINIX INC | |
Entity Central Index Key | 0001101239 | |
Current Fiscal Year End Date | --12-31 | |
Trading Symbol | EQIX | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 77,945,120 |
Condensed Consolidated Balance Sheets - Parenthetical - $ / shares |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common Stock, Par value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares outstanding | 77,944,939 | 71,409,015 |
Treasury stock, at cost (shares) | 405,472 | 408,415 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Income Statement [Abstract] | ||||
Revenues | $ 1,066,421 | $ 900,510 | $ 2,015,946 | $ 1,744,666 |
Costs and operating expenses: | ||||
Cost of revenues | 522,203 | 456,967 | 991,164 | 884,647 |
Sales and marketing | 141,566 | 107,832 | 270,493 | 214,422 |
General and administrative | 191,355 | 168,462 | 372,754 | 334,366 |
Acquisition costs | 26,402 | 15,594 | 29,427 | 52,130 |
Gains on asset sales | 0 | 0 | 0 | (5,242) |
Total costs and operating expenses | 881,526 | 748,855 | 1,663,838 | 1,480,323 |
Income from continuing operations | 184,895 | 151,655 | 352,108 | 264,343 |
Interest income | 4,437 | 841 | 7,529 | 1,766 |
Interest expense | (119,042) | (100,332) | (230,726) | (201,195) |
Other income (expense) | 1,284 | 1,555 | 1,621 | (59,155) |
Loss on debt extinguishment | (16,444) | (605) | (19,947) | (605) |
Income from continuing operations before income taxes | 55,130 | 53,114 | 110,585 | 5,154 |
Income tax expense | (9,325) | (13,812) | (22,718) | (3,179) |
Net income from continuing operations | 45,805 | 39,302 | 87,867 | 1,975 |
Net income from discontinued operations, net of tax | 0 | 5,409 | 0 | 11,625 |
Net income | $ 45,805 | $ 44,711 | $ 87,867 | $ 13,600 |
Earnings per share (EPS): | ||||
Basic EPS from continuing operations (in dollars per share) | $ 0.59 | $ 0.56 | $ 1.17 | $ 0.03 |
Basic EPS from discontinued operations (in dollars per share) | 0.00 | 0.08 | 0.00 | 0.17 |
Basic EPS (in dollars per share) | $ 0.59 | $ 0.64 | $ 1.17 | $ 0.20 |
Weighted-average shares | 77,923 | 69,729 | 75,383 | 68,931 |
Diluted EPS from continuing operations (in dollars per share) | $ 0.58 | $ 0.56 | $ 1.16 | $ 0.03 |
Diluted EPS from discontinued operations (in dollars per share) | 0.00 | 0.08 | 0.00 | 0.17 |
Diluted EPS (in dollars per share) | $ 0.58 | $ 0.64 | $ 1.16 | $ 0.20 |
Weighted-average shares for diluted EPS | 78,508 | 70,364 | 76,008 | 69,575 |
Quarterly cash dividend declared (in dollars per share) | $ 2 | $ 1.75 | $ 4 | $ 3.5 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - Parenthetical - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
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Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain (loss) on available-for-sale securities | $ 29 | $ (558) | $ (70) | $ (420) |
Unrealized gain (loss) on cash flow hedges | 9,240 | (4,908) | 13,291 | (2,647) |
Defined benefit plans | $ (4) | $ (2) | $ (10) | $ (6) |
Basis of Presentation and Significant Accounting Policies |
6 Months Ended |
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Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by Equinix, Inc. ("Equinix" or the "Company") and reflect all adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary to fairly state the financial position and the results of operations for the interim periods presented. The condensed consolidated balance sheet data as of December 31, 2016 has been derived from audited consolidated financial statements as of that date. The condensed consolidated financial statements have been prepared in accordance with the regulations of the Securities and Exchange Commission ("SEC"), but omit certain information and footnote disclosure necessary to present the statements in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). For further information, refer to the Consolidated Financial Statements and Notes thereto included in Equinix’s Form 10-K as filed with the SEC on February 27, 2017. Results for the interim periods are not necessarily indicative of results for the entire fiscal year. Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Equinix and its subsidiaries, including the acquisitions of certain Verizon data center assets from May 1, 2017, the IO UK data center operating business from February 3, 2017, the Paris IBX data center from August 1, 2016 and Telecity Group plc ("TelecityGroup") from January 15, 2016. All significant intercompany accounts and transactions have been eliminated in consolidation. Revenue Recognition Equinix derives more than 90% of its revenues from recurring revenue streams, consisting primarily of (1) colocation, which includes the licensing of cabinet space and power; (2) interconnection offerings, such as cross connects and Equinix Exchange ports; (3) managed infrastructure services and (4) other revenues consisting of rental income from tenants or subtenants. The remainder of the Company’s revenues are from non-recurring revenue streams, such as installation revenues, professional services, contract settlements and equipment sales. Revenues from recurring revenue streams are generally billed monthly and recognized ratably over the term of the contract, generally one to three years for IBX data center colocation customers. Non-recurring installation fees, although generally paid in a lump sum upon installation, are deferred and recognized ratably over the period the customer is expected to benefit from the installation. Professional service fees are recognized in the period in which the services were provided and represent the culmination of a separate earnings process as long as they meet the criteria for separate recognition under the accounting standard related to revenue arrangements with multiple deliverables. Revenue from bandwidth and equipment sales is recognized on a gross basis in accordance with the accounting standard related to reporting revenue gross as a principal versus net as an agent, primarily because the Company acts as the principal in the transaction, takes title to products and services and bears inventory and credit risk. To the extent the Company does not meet the criteria for recognizing bandwidth and equipment services as gross revenue, the Company records the revenue on a net basis. Revenue from contract settlements, when a customer wishes to terminate their contract early, is generally recognized on a cash basis, when no remaining performance obligations exist, to the extent that the revenue has not previously been recognized. The Company guarantees certain service levels, such as uptime, as outlined in individual customer contracts. If these service levels are not achieved due to any failure of the physical infrastructure or offerings, or in the event of certain instances of damage to customer infrastructure within the Company’s IBX data centers, the Company would generally reduce revenue for any credits or cash payments given to the customer as a result. The Company generally determines such service level credits and cash payments prior to the associated revenue being recognized, and historically, these credits and cash payments have generally not been significant. Revenue is recognized only when the service has been provided and when there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection of the receivable is reasonably assured. It is the Company’s customary business practice to obtain a signed master sales agreement and sales order prior to recognizing revenue in an arrangement. Taxes collected from customers and remitted to governmental authorities are reported on a net basis and are excluded from revenue. As a result of certain customer agreements being priced in currencies different from the functional currencies of the parties involved, under applicable accounting rules, the Company is deemed to have foreign currency forward contracts embedded in these contracts. The Company refers to these as foreign currency embedded derivatives (see Note 6). These instruments are separated from their host contracts and held on the Company’s consolidated balance sheet at their fair value. The majority of these foreign currency embedded derivatives arise in certain of the Company’s subsidiaries where the local currency is the subsidiary’s functional currency and the customer contract is denominated in the U.S. dollar. Changes in their fair values are recognized within revenues in the Company’s consolidated statements of operations. The Company assesses collectability based on a number of factors, including past transaction history with the customer and the credit-worthiness of the customer. The Company generally does not request collateral from its customers although in certain cases the Company obtains a security interest in a customer’s equipment placed in its IBX data centers or obtains a deposit. If the Company determines that collection of a fee is not reasonably assured, the fee is deferred and revenue is recognized at the time collection becomes reasonably assured, which is generally upon receipt of cash. In addition, the Company also maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments for which the Company had expected to collect the revenues. If the financial condition of the Company’s customers were to deteriorate or if they became insolvent, resulting in an impairment of their ability to make payments, greater allowances for doubtful accounts may be required. Management specifically analyzes accounts receivable and current economic news and trends, historical bad debts, customer concentrations, customer credit-worthiness and changes in customer payment terms when evaluating revenue recognition and the adequacy of the Company’s reserves. Any amounts that were previously recognized as revenue and subsequently determined to be uncollectible are charged to bad debt expense included in general and administrative expense in the consolidated statements of operations. A specific bad debt reserve of up to the full amount of a particular invoice value is provided for certain problematic customer balances. An additional reserve is established for all other accounts based on the age of the invoices and an analysis of historical credits issued. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable. Income Taxes The Company began operating as a real estate investment trust for federal income tax purposes ("REIT") effective January 1, 2015, and thereafter received a favorable private letter ruling ("PLR") from the U.S. Internal Revenue Service ("IRS") that validated the Company's position with respect to specified REIT compliance matters. As a result, the Company may deduct the distributions made to its stockholders from taxable income generated by the operations of the Company parent and its qualified REIT subsidiaries ("QRSs"). The Company’s dividends paid deduction generally eliminates the U.S. taxable income of the Company parent and its QRSs, resulting in no U.S. income tax due. However, the Company's taxable REIT subsidiaries ("TRSs") will continue to be subject to income taxes on any taxable income generated by them. In addition, the foreign operations of the Company will continue to be subject to local income taxes regardless of whether the foreign operations are operated as a QRS or TRS. The Company provides for income taxes during interim periods based on the estimated effective tax rate for the year. The effective tax rate is subject to change in the future due to various factors such as the operating performance of the Company, tax law changes and future business acquisitions. It is reasonably possible that a portion of unrecognized tax benefits relating to the Company's tax positions may become realizable in the coming quarter due to the expiration of statutes of limitations. The Company's effective tax rates were 20.5% and 61.7% for the six months ended June 30, 2017 and 2016, respectively. The decrease in the effective tax rate for the six months in 2017 as compared to the same period in 2016 is primarily due to the significant acquisition costs incurred in the prior period for the TelecityGroup acquisition that were not tax deductible. Assets Held for Sale and Discontinued Operations Assets and liabilities to be disposed of that meet all of the criteria to be classified as held for sale as set forth in the accounting standard for impairment or disposal of long-lived assets are reported at the lower of their carrying amounts or fair values less costs to sell. Assets are not depreciated or amortized while they are classified as held for sale. A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. The accounting guidance requires a business activity that, on acquisition, meets the criteria to be classified as held for sale be reported as a discontinued operation. For further information on the Company's assets held for sale and discontinued operations, see Notes 4 and 5. Reclassifications Certain amounts in prior periods have been reclassified to conform to current period presentation. Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In May 2017, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-09 Compensation–Stock Compensation (Topic 718). This ASU was issued primarily to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This ASU affects any entity that changes the terms or conditions of a share-based payment award. This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU is effective for annual or any interim reporting periods beginning after December 15, 2017 with early adoption permitted. The adoption of ASU 2017-09 is not expected to have a significant impact on its consolidated financial statements. In March 2017, FASB issued ASU No. 2017-07 Compensation–Retirement Benefits (Topic 715). This ASU was issued primarily to improve the presentation of net periodic pension cost and net periodic post-retirement benefit cost. This ASU requires that an employer reports the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic post-retirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. This ASU is effective for annual or any interim reporting periods beginning after December 15, 2017. While the Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements, the Company does not expect the adoption of ASU 2017-07 to have a significant impact on its consolidated financial statements due, in part, to the immateriality of a retirement benefit plan it holds. In February 2017, FASB issued ASU No. 2017-05 Other Income—Gains and Losses from the Derecognition of Non-financial Assets (Subtopic 610-20). This ASU is to clarify the scope of the non-financial asset guidance in Subtopic 610-20 and to add guidance for partial sales of non-financial assets. This ASU defines the term in substance non-financial asset and clarifies that non-financial assets within the scope of Subtopic 610-20 may include non-financial assets transferred within a legal entity to a counterparty. The ASU also provides guidance on the accounting for what often are referred to as partial sales of non-financial assets within the scope of Subtopic 610-20 and contributions of non-financial assets to a joint venture or other non-controlled investee. This ASU is effective for annual or any interim reporting periods beginning after December 15, 2017. Early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements, but does not expect to early adopt this ASU. In January 2017, FASB issued ASU No. 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU is to simplify the subsequent measurement of goodwill. The ASU eliminates step 2 from the goodwill impairment test and the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU should be applied on a prospective basis. This ASU is effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. In January 2017, FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those periods with early adoption being permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and expects to adopt the standard prospectively on January 1, 2018. In October 2016, FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This ASU requires the recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective for fiscal years and interim period within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization's portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company expects this ASU to impact its accounts receivable and is currently evaluating the extent of the impact that the adoption of this ASU will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. While the Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements, the Company believes this standard will have a significant impact on its consolidated financial statements due, in part, to the substantial amount of leases it has. In January 2016, the FASB issued ASU 2016-01, Financial Instruments- Overall (Subtopic 825-10) ("ASU 2016-01"), which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income other than those accounted for under equity method of accounting or those that result in consolidation of the investees. The ASU also requires that an entity present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the ASU eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company currently holds publicly traded equity securities that are classified as “available-for-sale” and are carried at fair value with unrealized gains and losses reported in stockholders’ equity as a component of accumulated other comprehensive income (loss). Upon the adoption of this ASU, the unrealized gains and losses will be recognized through net income. The Company has not elected to measure its financial liabilities at fair value therefore, does not expect to have an impact on the accounting for its financial liabilities. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09") Topic 606 and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016 and May 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, respectively (ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12 and ASU 2016-20 collectively, Topic 606). Topic 606 will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of Topic 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. Topic 606 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. Topic 606 allows entities to adopt with one of these two methods: full retrospective, which applies retrospectively to each prior reporting period presented, or modified retrospective, which recognizes the cumulative effect of initially applying the revenue standard as an adjustment to the opening balance of retained earnings in the period of initial application. The Company currently anticipates adopting the standard using the modified retrospective method. Topic 606, as amended, is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company will adopt the standard on January 1, 2018. While the Company is continuing to evaluate all potential impacts of the standard, the Company believes the most significant impact relates to its accounting for installation revenue and the cost to obtain contracts. Under the new standard, the Company expects to recognize installation revenue over the contract period rather than over the estimated installation life. Under the new standard, the Company is also required to capitalize and amortize certain costs to obtain contracts. Therefore, these costs to obtain contracts will not be immediately expensed, but will be capitalized and amortized over the estimated contract term plus estimated renewal term. Accounting Standards Adopted In January 2017, FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is effective immediately. The Company adopted ASU 2017-03 in the three months ended March 31, 2017 by including appropriate disclosure requirements within its condensed consolidated financial statements to adhere to this new ASU. In December 2016, FASB issued ASU No. 2016-19, Technical Corrections and Improvements. This ASU covers a wide range of Topics in the Accounting Standards Codification. Certain aspects of this ASU were effective immediately, while a few of the corrections are effective for the Company for its fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted ASU 2016-19 in the three months ended March 31, 2017. The adoption of ASU 2016-19 did not impact the Company's condensed consolidated financial statements. In November 2016, FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU applies to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows. The ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for the Company for its fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with early adoption being permitted. This ASU should be applied using a retrospective transition method to each period presented. The Company adopted ASU 2016-18 in the three months ended March 31, 2017 and applied this ASU retrospectively to the periods presented in the Company's condensed consolidated statements of cash flows. As a result, net cash used in investing activities for the six months ended June 30, 2016 was adjusted to exclude the change in restricted cash and increased the previously reported amount by $466.3 million. Restricted cash amounts are primarily time deposits or cash set side as a pledge for our mortgage loan in Germany, an escrow account for a data center project and collateral for the Company's various bank guarantees for the periods ended June 30, 2017 and 2016. In October 2016, FASB issued ASU No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control. This ASU alters how a decision maker needs to consider indirect interests in a variable interest entity ("VIE") held through an entity under common control. Under this ASU, if a decision maker is required to evaluate whether it is the primary beneficiary of a VIE, it will need to consider only its proportionate indirect interest in the VIE held through a common control party. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-17 in the three months ended March 31, 2017. The adoption of this standard did not impact the Company's condensed consolidated financial statements as it does not hold any interests in a VIE through related parties that are under common control. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU provides guidance on the classification of eight cash flow issues to reduce the existing diversification in practice, including (a) debt prepayment or debt extinguishment costs; (b) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (c) contingent consideration payments made after a business combination; (d) proceeds from settlement of insurance claims; (e) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (f) distributions received from equity method investees; (g) beneficial interests in securitization transactions; and (h) separately identifiable cash flows and application of the predominance principle. The ASU is effective for fiscal years and interim period within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU 2016-15 in the three months ended March 31, 2017 and applied this ASU using a retrospective transition method to each period presented in the Company's condensed consolidated statements of cash flows. The adoption of ASU 2016-15 did not impact the Company's condensed consolidated statements of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). This ASU simplifies several areas of the accounting for share-based payment award transactions, including (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. The Company adopted ASU 2016-09 in the three months ended March 31, 2017. Beginning on January 1, 2017, the Company began to record the excess tax benefits from stock-based compensation as income tax expense through the statement of operations instead of additional paid-in capital as required under the previous guidance. There was no adjustment to excess tax benefits from stock-based compensation recorded as additional paid-in capital in prior years. Excess tax benefits that were not previously recognized, as well as a valuation allowance recognized for deferred tax assets as a result of the adoption of this ASU, were recorded on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of 2017 totaling $1.1 million. As a part of the adoption of this ASU, stock compensation awards will have more dilutive effect on the Company's earnings per share prospectively. Under this guidance, cash flows related to excess tax benefits will no longer be separately classified as financing activities apart from other income tax cash flow. The Company elected to apply this part of the guidance retrospectively, which resulted in no change in either net cash provided by operating activities or net cash used in financing activities in the Company's condensed consolidated statement of cash flows for the six months ended June 30, 2016 to conform with the current period presentation. Additionally, this guidance permits entities to make an accounting policy to estimate forfeitures each period or to account for forfeitures as they occur. The Company elected to continue to estimate forfeitures. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments ("ASU 2016-06"). This ASU clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this ASU is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. This guidance is to be applied on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year in which the amendments are effective, and is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted ASU 2016-06 in the three months ended March 31, 2017. The adoption of this standard did not impact the Company's condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships ("ASU 2016-05"). This ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. This ASU may be applied prospectively or using a modified retrospective approach, and is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted ASU 2016-05 in the three months ended March 31, 2017. The adoption of ASU 2016-05 did not impact the Company's condensed consolidated financial statements. |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share ("EPS") for the periods presented (in thousands, except per share amounts):
The following table sets forth weighted-average outstanding potential shares of common stock that are not included in the diluted earnings per share calculation above because to do so would be anti-dilutive for the periods indicated (in thousands):
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Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Certain Verizon Data Center Assets Acquisition On May 1, 2017, the Company completed the acquisition of certain colocation service business from Verizon Communications Inc. ("Verizon") consisting of 29 data center buildings located in the United States, Brazil and Colombia, for a cash purchase price of approximately $3.6 billion (the "Acquisition" or the "Selected Verizon Data Center Business Acquisition"). The Company funded the Acquisition with proceeds of debt and equity financings, which closed in January and March 2017 (See further discussions on the term B-2 loan borrowing and senior notes issuance in Note 9 and common stock issuance in Note 11).The Acquisition constitutes a business under the accounting standard for business combinations and therefore was accounted for as a business combination using the acquisition method of accounting. In connection with the Acquisition, the Company entered into a commitment letter (the "Commitment Letter"), dated December 6, 2016, with JPMorgan Chase Bank, N.A., Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Commitment Parties"), pursuant to which the Commitment Parties committed to provide a senior unsecured bridge facility in an aggregate principal amount of $2.0 billion for the purposes of funding (i) a portion of the cash consideration for the Acquisition and (ii) the fees and expenses incurred in connection with the Acquisition. Commitment fees associated with the Commitment Letter were equal to (i) 0.50% of the commitment plus (ii) an additional 0.25% of the commitment that is four months after the date in which the Commitment Letter was entered into. Following the completion of the debt and equity financings associated with the Acquisition in March 2017, the Company terminated the Commitment Letter. See further discussions on the senior notes issuance in Note 9 and common stock issuance in Note 11. During the first quarter of 2017, the Company paid $10.0 million of commitment fees associated with the Commitment Letter and recorded $7.8 million to interest expense in the condensed consolidated statement of operations for the six months ended June 30, 2017. The Company included the Acquisition's results of operations from May 1, 2017 in its condensed consolidated statement of operations and the estimated fair value of assets acquired and liabilities assumed in its condensed consolidated balance sheets beginning May 1, 2017. The Company incurred acquisition costs of approximately $24.5 million and $26.4 million during the three and six months ended June 30, 2017, respectively, related to the Acquisition. Purchase Price Allocation Under the acquisition method of accounting, the total purchase price is allocated to the assets acquired and liabilities assumed measured at fair value on the date of acquisition. As of June 30, 2017, the Company has not completed the detailed valuation analysis to derive the fair value of the following items including but not limited to, property, plant and equipment and intangible assets. Therefore, the allocation of the purchase price to assets acquired and liabilities assumed is based on provisional estimates and is subject to continuing management analysis, with assistance from third party valuation advisers. The preliminary purchase price allocation was as follows (in thousands):
The following table presents certain information on the acquired identifiable intangible assets (dollars in thousands):
The fair value of customer relationships was estimated by applying an income approach. The fair value was determined by calculating the present value of estimated future operating cash flows generated from existing customers less costs to realize the revenue. The Company applied discount rates ranging from 7.7% to 10.7%, which reflected the nature of the assets as they relate to the risk and uncertainty of the estimated future operating cash flows. Other significant assumptions used to estimate the fair value of the customer relationships include projected revenue growth, customer attrition rates, sales and marketing expenses and operating margins. The fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in the accounting standard for fair value measurements. The fair value of the property, plant and equipment was estimated by applying the cost approach. The cost approach is to use the replacement or reproduction cost as an indicator of fair value. The premise of the cost approach is that a market participant would pay no more for an asset than the amount for which the asset could be replaced or reproduced. The key assumptions of the cost approach include replacement cost new, physical deterioration, functional and economic obsolescence, economic useful life, remaining useful life, age and effective age. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The goodwill is attributable to the workforce of the acquired business and the revenue increase from future customers expected to arise after the acquisition. The goodwill is not expected to be deductible for local tax purposes. Goodwill will not be amortized and will be tested for impairment at least annually. Goodwill recorded as a result of the Acquisition was attributable to the Company's Americas region. For the three and six months ended June 30, 2017, the Company's results of continuing operations include the Acquisition's revenues of $86.7 million and net income from continuing operations of $27.4 million for the period May 1, 2017 through June 30, 2017. IO Acquisition On February 3, 2017, the Company acquired IO UK's data center operating business in Slough, United Kingdom, for a cash payment of approximately $36.3 million ("IO Acquisition"). The acquired facility will be renamed LD10. The IO Acquisition constitutes a business under the accounting standard for business combinations and as a result, was accounted for as a business combination using the acquisition method of accounting. Under the acquisition method, the total purchase price is allocated to the assets acquired and liabilities assumed measured at fair value on the date of acquisition. As of June 30, 2017, the Company has not completed the detailed valuation analysis to derive the fair value of the following items, including but not limited to working capital and deferred taxes. The purchase price has been provisionally allocated, primarily to property, plant and equipment of $40.3 million, goodwill of $17.9 million, intangible assets of $6.3 million, deferred tax assets of $6.3 million and financing obligations of $33.1 million. The nature of the intangible assets acquired is customer relationships with an estimated useful life of 10 years. Goodwill is not expected to be deductible for local tax purposes and is attributable to the Company's EMEA region. The Company included IO UK's data center operating results from February 3, 2017 in its condensed consolidated statement of operations and the estimated fair value of assets acquired and liabilities assumed in its condensed consolidated balance sheets beginning February 3, 2017. For the three and six months ended June 30, 2017, the incremental revenues and net loss recorded from the IO Acquisition were not significant to the Company's condensed consolidated statement of operations. The acquisition costs incurred during the three and six months ended June 30, 2017 related to the IO Acquisition were not significant. Paris IBX Data Center Acquisition On August 1, 2016, the Company completed the purchase of Digital Realty Trust, Inc.'s ("Digital Realty's") operating business including its real estate and facility, located in St. Denis, Paris for cash consideration of approximately €193.8 million or $216.4 million at the exchange rate in effect on August 1, 2016 (the "Paris IBX Data Center Acquisition"). A portion of the building was leased to the Company and was being used by the Company as its Paris 2 and Paris 3 data centers. The Paris 2 lease was accounted for as an operating lease and the Paris 3 lease was accounted for as a financing lease. Upon acquisition, the Company in effect terminated both leases. The Company settled the financing lease obligation of Paris 3 for €47.8 million or approximately $53.4 million and recognized a loss on debt extinguishment of €8.8 million or approximately $9.9 million in the third quarter of 2016. The Paris IBX Data Center Acquisition constitutes a business under the accounting standard for business combinations and as a result, the Paris IBX Data Center Acquisition was accounted for as a business combination using the acquisition method of accounting. The Company included the incremental Paris IBX Data Center's results of operations from August 1, 2016 in its condensed consolidated statement of operations and the estimated fair value of assets acquired and liabilities assumed in its condensed consolidated balance sheets beginning August 1, 2016. The Company incurred acquisition costs of approximately $12.0 million for the year ended December 31, 2016 related to the Paris IBX Data Center Acquisition. Purchase Price Allocation Under the acquisition method of accounting, the assets acquired and liabilities assumed in a business combination shall be measured at fair value at the date of the acquisition and the Company has completed the valuation analysis. The purchase price allocation, which excludes settlement of the Paris 3 financing obligations, was as follows (in thousands):
Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. Goodwill is not expected to be deductible for local tax purposes. Goodwill will not be amortized and will be tested for impairment at least annually. Goodwill is attributable to the Company's EMEA region. The following table presents certain information on the acquired identifiable intangible assets (dollars in thousands):
The fair value of in-place leases may consist of a variety of components including, but not necessarily limited to the value associated with avoiding the cost of originating the acquired in-place leases. The fair value of favorable leases was estimated based on the income approach, by computing the net present value of the difference between the contractual amounts to be paid pursuant to the lease agreements and estimates of the fair market lease rates for the corresponding in-place leases measured over the remaining non-cancellable terms of the leases. The fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in the accounting standard for fair value measurements. The fair value of the property, plant and equipment was estimated by applying the income approach or cost approach, such as cash flows or earnings that an asset can be expected to generate over its useful life or the replacement or reproduction cost. For the three months ended June 30, 2017, the incremental revenues and incremental net loss from the Paris IBX Data Center Acquisition were not significant to the Company's condensed consolidated statement of operations. For the six months ended June 30, 2017, the incremental revenues from the Paris IBX Data Center Acquisition were $6.4 million and the incremental net loss was not significant to the Company's condensed consolidated statement of operations. The incremental results of operations from the Paris IBX Data Center Acquisition are not significant; therefore the Company does not present pro forma combined results of operations. TelecityGroup Acquisition On January 15, 2016, the Company completed the acquisition of the entire issued and to be issued share capital of TelecityGroup. TelecityGroup operates data center facilities in cities across Europe. The acquisition of TelecityGroup has enhanced the Company's existing data center portfolio by adding new IBX metro markets in Europe including Dublin, Helsinki, Istanbul, Manchester, Milan, Sofia, Stockholm and Warsaw. As a result of the transaction, TelecityGroup became a wholly-owned subsidiary of the Company. Under the terms of the acquisition, the Company acquired all outstanding shares and all vested equity awards of TelecityGroup at 572.5 pence in cash and 0.0336 new shares of Equinix common stock for a total purchase consideration of approximately £2,624.5 million or approximately $3,743.6 million. In addition, the Company assumed $1.3 million of TelecityGroup's vested employee equity awards as part of consideration transferred. The Company incurred acquisition costs of approximately $42.5 million during the year ended December 31, 2016 related to the TelecityGroup acquisition. In connection with the TelecityGroup acquisition, the Company placed £322.9 million or approximately $475.7 million into a restricted cash account. The cash was released upon completion of the acquisition. Also, in connection with TelecityGroup acquisition, the Company entered into a bridge credit agreement with J.P. Morgan Chase Bank, N.A. ("JPMCB") as the initial lender and as administrative agent for the lenders for a principal amount of £875.0 million or approximately $1,289.0 million at the exchange rate in effect on December 31, 2015 (the "Bridge Loan"). The Company did not make any borrowings under the Bridge Loan and the Bridge Loan was terminated on January 8, 2016. Purchase Price Allocation Under the acquisition method of accounting, the assets acquired and liabilities assumed in a business combination shall be measured at fair value at the date of the acquisition and the Company has completed the valuation analysis. As of December 31, 2016, the Company updated the final allocation of purchase price for TelecityGroup from the provisional amounts reported as of March 31, 2016, which primarily resulted in increases to intangible assets of $36.8 million and deferred tax liabilities of $19.5 million and decreases in capital lease and other financing obligations of $34.4 million, goodwill of $22.5 million and assets held for sale of $36.9 million. The changes did not have a significant impact on the Company’s results from operations for the year ended December 31, 2016. The final allocation of the purchase price is as follows (in thousands):
The purchase price allocation above, as of the acquisition date, includes acquired assets and liabilities that were classified by the Company as held for sale (Note 4). The following table presents certain information on the acquired intangible assets (dollars in thousands):
The fair value of customer relationships was estimated by applying an income approach. The fair value was determined by calculating the present value of estimated future operating cash flows generated from existing customers less costs to realize the revenue. The Company applied a weighted-average discount rate of approximately 8.5%, which reflected the nature of the assets as they relate to the estimated future operating cash flows. Other significant assumptions used to estimate the fair value of the customer relationships include projected revenue growth, customer attrition rates, sales and marketing expenses and operating margins. The fair value of the TelecityGroup trade name was estimated using the relief of royalty approach. The Company applied a relief of royalty rate of 2.0% and a weighted-average discount rate of approximately 9.0%. The fair value of the other acquired identifiable intangible assets was estimated by applying a relief of royalty or cost approach as appropriate. The fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in the accounting standard for fair value measurements. The fair value of the property, plant and equipment was estimated by applying the income approach or cost approach. The income approach is used to estimate fair value based on the income stream, such as cash flows or earnings that an asset can be expected to generate over its useful life. There are two primary methods of applying the income approach to determine the fair value of assets: the discounted cash flow method and the direct capitalization method. The key assumptions include the estimated earnings, discount rate and direct capitalization rate. The cost approach is to use the replacement or reproduction cost as an indicator of fair value. The premise of the cost approach is that a market participant would pay no more for an asset than the amount for which the asset could be replaced or reproduced. The key assumptions of the cost approach include replacement cost new, physical deterioration, functional and economic obsolescence, economic useful life, remaining useful life, age and effective age. The Company determined the fair value of the loans payable assumed in the TelecityGroup acquisition by estimating TelecityGroup's debt rating and reviewing market data with a similar debt rating and other characteristics of the debt, including the maturity date and security type. On January 15, 2016, the Company prepaid and terminated these loans payable. In conjunction with the repayment of the loans payable, the Company incurred an insignificant amount of pre-payment penalties and interest rate swap termination costs, which were recorded as interest expense in the condensed consolidated statement of operations. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the acquisition. The goodwill is not expected to be deductible for local tax purposes. Goodwill will not be amortized and will be tested for impairment at least annually. Goodwill recorded as a result of the TelecityGroup acquisition, except for the goodwill associated with assets held for sale, is attributable to the Company's EMEA region. For the three months ended June 30, 2016, the Company's results of continuing operations include TelecityGroup revenues of $107.2 million and net loss from continuing operations of $35.9 million. For the six months ended June 30, 2016, the Company's results of continuing operations include TelecityGroup revenues of $191.7 million and net loss from continuing operations of $38.7 million. Unaudited Pro Forma Combined Financial Information The following unaudited pro forma combined financial information has been prepared by the Company using the acquisition method of accounting to give effect to the Selected Verizon Data Center Business Acquisition as though it occurred on January 1, 2016. The Company completed the Selected Verizon Data Center Business Acquisition on May 1, 2017. The operating results of the Selected Verizon Data Center Business Acquisition for the period May 1, 2017 through June 30, 2017 are included in the condensed consolidated statement of operations for the three and six months ended June 30, 2017. The Company and Verizon entered into agreements at the closing of the Acquisition pursuant to which the Company will provide space and services to Verizon at the acquired data centers. These arrangements are not reflected in the unaudited pro forma combined financial information. For the three and six months ended June 30, 2017, the Company recognized approximately $86.7 million of revenues attributed to the Acquisition, which included these arrangements. The unaudited pro forma combined financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have actually been reported had the acquisitions occurred on the above dates, nor is it necessarily indicative of the future results of operations of the combined company. The following table sets forth the unaudited pro forma combined results of operations for the three and six months ended June 30, 2017 and 2016 (in thousands, except per share amounts):
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Property, Plant and Equipment [Abstract] | |
Assets Held for Sale | Assets Held for Sale During the fourth quarter of 2015, the Company entered into an agreement to sell a parcel of land in San Jose, California. The sale was completed in February 2016 and the Company recognized a gain on sale of $5.2 million. In June 2016, the Company approved the divestiture of the solar power assets of Bit-isle. In October 2016, the Company entered into a Share Transfer Agreement for the transfer of common stock of Terra Power Co., Ltd., relating to the divestiture of the solar power assets of Bit-isle. The Company received ¥400.0 million upon the closing of the transaction, or approximately $3.8 million at the exchange rate in effect on October 31, 2016. By November 30, 2016, the Company had received an additional ¥2,500.0 million, or approximately $22.1 million at the exchange rate in effect at the time of cash receipt. The Company received the remaining payment of ¥5,313.4 million in the first quarter of 2017, or approximately $47.8 million at the exchange rate in effect on March 31, 2017. The Company did not have any assets and liabilities held for sale as of June 30, 2017 and December 31, 2016 |
Discontinued Operations |
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Discontinued Operations | Discontinued Operations In order to obtain the approval of the European Commission for the acquisition of TelecityGroup, the Company and TelecityGroup agreed to divest certain data centers, including the Company's London 2 data center and certain data centers of TelecityGroup. The data centers, on acquisition, met the criteria to be classified as held for sale and were therefore reported as a discontinued operation. As of the date of acquisition, depreciation and amortization of discontinued operations were ceased. Capital expenditures from the date of acquisition through June 30, 2016 were $31.5 million. The Company did not record income from discontinued operations, net of tax for the three and six months ended June 30, 2017. The following table presents the financial results of the Company's discontinued operations for the three and six months ended June 30, 2016 (in thousands).
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Derivatives and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities | Derivatives and Hedging Activities Derivatives Designated as Hedging Instruments Net Investment Hedges. The Company is exposed to the impact of foreign exchange rate fluctuations on the value of investments in its foreign subsidiaries. In order to mitigate the impact of foreign currency exchange rates, the Company has entered into various foreign currency loans which are designated as hedges against the Company's net investment in foreign subsidiaries. As of June 30, 2017 and December 31, 2016, the total principal amounts of foreign currency loans, which were designated as net investment hedges, were $1,806.3 million and $646.2 million, respectively. For a net investment hedge, changes in the fair value of the hedging instrument designated as a net investment hedge, except the ineffective portion and forward points, are recorded as a component of other comprehensive income in the condensed consolidated balance sheets. The Company recorded net foreign exchange losses of $101.8 million and $130.4 million in other comprehensive income (loss) for the three and six months ended June 30, 2017 and foreign exchange gains of $55.2 million and $38.9 million in other comprehensive income (loss) for the three and six months ended June 30, 2016, respectively. The Company recorded no ineffectiveness from its net investment hedges for the three and six months ended June 30, 2017 and 2016. Cash Flow Hedges. The Company hedges its foreign currency translation exposure for forecasted revenues and expenses in its EMEA region between the U.S. Dollar and the British Pound, Euro, Swedish Krona and Swiss Franc. The foreign currency forward and option contracts that the Company uses to hedge this exposure are designated as cash flow hedges under the accounting standard for derivatives and hedging. The Company also uses purchased collar options to manage a portion of its exposure to foreign currency exchange rate fluctuations, where the Company writes a foreign currency call option and purchases a foreign currency put option. When two or more derivative instruments in combination are jointly designated as a cash flow hedging instrument, they are treated as a single instrument. The Company enters into intercompany hedging instruments ("intercompany derivatives") with wholly-owned subsidiaries of the Company in order to hedge certain forecasted revenues and expenses denominated in currencies other than the U.S. dollar. Simultaneously, the Company enters into derivative contracts with unrelated third parties to externally hedge the net exposure created by such intercompany derivatives. The following disclosure is prepared on a consolidated basis. Assets and liabilities resulting from intercompany derivatives have been eliminated in consolidation. As of June 30, 2017, the Company's cash flow hedge instruments had maturity dates ranging from July 2017 to June 2019 as follows (in thousands):
As of December 31, 2016, the Company's cash flow hedge instruments had maturity dates ranging from January 2017 to November 2018 as follows (in thousands):
During the three months ended June 30, 2017 and 2016, the ineffective and excluded portions of cash flow hedges recognized in other income (expense) were not significant. During the three months ended June 30, 2017, the amount of net gains reclassified from accumulated other comprehensive income (loss) to revenues was $10.5 million and the amount of net losses reclassified from accumulated other comprehensive income (loss) to operating expenses was $5.6 million. During the three months ended June 30, 2016, the amount of net gains reclassified from accumulated other comprehensive income (loss) to revenues was $6.2 million and the amount of net losses reclassified from accumulated other comprehensive income (loss) to operating expenses was $2.8 million. During the six months ended June 30, 2017 and 2016, the ineffective and excluded portions of cash flow hedges recognized in other income (expense) were not significant. During the six months ended June 30, 2017, the amount of net gains reclassified from accumulated other comprehensive income (loss) to revenues was $28.2 million and the amount of net losses reclassified from accumulated other comprehensive income (loss) to operating expenses was $14.6 million. During the six months ended June 30, 2016, the amount of net gains reclassified from accumulated other comprehensive income (loss) to revenues was $12.6 million and the amount of net losses reclassified from accumulated other comprehensive income (loss) to operating expenses was $6.7 million. Derivatives Not Designated as Hedging Instruments Embedded Derivatives. The Company is deemed to have foreign currency forward contracts embedded in certain of the Company's customer agreements that are priced in currencies different from the functional or local currencies of the parties involved. These embedded derivatives are separated from their host contracts and carried on the Company's balance sheet at their fair value. The majority of these embedded derivatives arise as a result of the Company's foreign subsidiaries pricing their customer contracts in the U.S. dollar. Gains and losses on these embedded derivatives are included within revenues in the Company's condensed consolidated statements of operations. During the three months ended June 30, 2017 and June 30, 2016, gains (losses) associated with these embedded derivatives were not significant. During the six months ended June 30, 2017, the losses associated with these embedded derivatives were $6.8 million and during the six months ended June 30, 2016, the losses associated with these embedded derivatives were $8.1 million. Economic Hedges of Embedded Derivatives. The Company uses foreign currency forward contracts to manage the foreign exchange risk associated with the Company's customer agreements that are priced in currencies different from the functional or local currencies of the parties involved ("economic hedges of embedded derivatives"). Foreign currency forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon price on an agreed-upon settlement date. Gains and losses on these contracts are included within revenues in the Company's condensed consolidated statements of operations along with gains and losses of the related embedded derivatives. The Company entered into various economic hedges of embedded derivatives during the three and six months ended June 30, 2017 and 2016. During the three and six months ended June 30, 2017, the gains (losses) associated with these contracts were not significant. During the three months ended June 30, 2016, the gains (losses) associated with these contracts were not significant. During the six months ended June 30, 2016, the gains associated with these contracts were $5.6 million. Foreign Currency Forward and Option Contracts. The Company also uses foreign currency forward and option contracts to manage the foreign exchange risk associated with certain foreign currency-denominated assets and liabilities. As a result of foreign currency fluctuations, the U.S. dollar equivalent values of its foreign currency-denominated assets and liabilities change. Gains and losses on these contracts are included in other income (expense), net in the Company's condensed consolidated statements of operations, along with foreign currency gains and losses of the related foreign currency-denominated assets and liabilities associated with these foreign currency forward and option contracts. The Company entered into various foreign currency forward and option contracts during the three and six months ended June 30, 2017 and 2016. During the three and six months ended June 30, 2017, the Company recognized net losses of $22.5 million and $37.2 million, respectively, associated with these contracts. During the three and six months ended June 30, 2016, the Company recognized net gains of $49.1 million and $41.5 million, respectively, associated with these contracts. Offsetting Derivative Assets and Liabilities The following table presents the fair value of derivative instruments recognized in the Company's condensed consolidated balance sheets as of June 30, 2017 (in thousands):
The following table presents the fair value of derivative instruments recognized in the Company's condensed consolidated balance sheets as of December 31, 2016 (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Cash, Cash Equivalents and Investments. The fair value of the Company's investments in money market funds approximates their face value. Such instruments are included in cash equivalents. The Company's money market funds and publicly traded equity securities are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices for identical instruments in active markets. The fair value of the Company's other investments approximate their face value and include certificates of deposit. The fair value of these investments is priced based on the quoted market price for similar instruments or nonbinding market prices that are corroborated by observable market data. Such instruments are classified within Level 2 of the fair value hierarchy. The Company determines the fair values of its Level 2 investments by using inputs such as actual trade data, benchmark yields, broker/dealer quotes, and other similar data, which are obtained from quoted market prices, custody bank, third-party pricing vendors, or other sources. The Company uses such pricing data as the primary input to make its assessments and determinations as to the ultimate valuation of its investment portfolio and has not made, during the periods presented, any material adjustments to such inputs. The Company is responsible for its condensed consolidated financial statements and underlying estimates. Derivative Assets and Liabilities. For derivatives, the Company uses forward contract and option models employing market observable inputs, such as spot currency rates and forward points with adjustments made to these values utilizing published credit default swap rates of its foreign exchange trading counterparties and other comparable companies. The Company has determined that the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, therefore the derivatives are categorized as Level 2. The Company's financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 were as follows (in thousands):
The Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 were as follows (in thousands):
The Company did not have any Level 3 financial assets or financial liabilities as of June 30, 2017 and December 31, 2016. |
Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Capital Lease and Other Financing Obligations Amsterdam 5 ("AM5") On May 15, 2017, the Company entered into an agreement to acquire the land and building for the AM5 IBX for cash consideration of €26.7 million or $30.4 million at the exchange rate in effect on June 30, 2017. The Company had previously leased this IBX. As a result of the purchase, the prior lease was effectively terminated, the lease liability was settled in full and the transaction was accounted for as a debt extinguishment. The Company settled the financing lease obligation of AM5 for €20.0 million or approximately $22.8 million and recognized a loss on debt extinguishment of €7.2 million or approximately $8.2 million. The fair value allocated to the ground lease of €6.7 million or $7.6 million was recorded as other assets and will be amortized through December 2054. Hong Kong 5 ("HK5") In January 2017, the Company entered into an agreement for certain elements of the construction of the Company's fifth data center in Hong Kong ("HK5"). The terms of the construction agreement triggered the Company to be, in substance, the owner of the asset during the construction phase. Additionally, the Company believes that it will likely fail the sales lease back test due to its continued involvement and therefore has accounted for the construction and related agreements as a build-to-suit arrangement. As of June 30, 2017, the Company recorded a financing liability totaling approximately 547.5 million Hong Kong dollars, or $70.1 million at the exchange rate in effect as of June 30, 2017. Maturities of Capital Lease and Other Financing Obligations The Company's capital lease and other financing obligations are summarized as follows (in thousands):
(1) Other financing obligations are primarily build-to-suit lease obligations. |
Debt Facilities |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Facilities | Debt Facilities Mortgage and Loans Payable As of June 30, 2017 and December 31, 2016, the Company's mortgage and loans payable consisted of the following (in thousands):
On December 22, 2016, the Company, as borrower, and certain subsidiaries as guarantors, entered into a third amendment (the "Third Amendment") to the Senior Credit Facility. Pursuant to the Third Amendment, (i) the Company may borrow up to €1,000.0 million in additional term B loan (the "Term B-2 Loan"), (ii) the interest rate margin applicable to the existing Term Loan B (the "Term Loan B-1 Facility") in U.S. Dollars was reduced from 3.25% to 2.50% and the LIBOR floor applicable to such loans was reduced from 0.75% to zero and (iii) the interest rate margin applicable to the loans borrowed under the Term Loan B-1 Facility in Pounds Sterling was reduced from 3.75% to 3.00%, with no change to the existing LIBOR floor of 0.75% applicable to such loans. On January 6, 2017, the Company borrowed the full amount of the Term B-2 Loan of €1,000.0 million, or approximately $1,059.8 million and recorded debt issuance cost of €13.0 million, or approximately $13.8 million at the exchange rate in effect on January 6, 2017. The Term B-2 Loan will bear interest at an index rate based on LIBOR plus a margin of 3.25%. No original issue discount is applicable to the Term B-2 Loan. The Term B-2 Loan must be repaid in equal quarterly installments of 0.25% of the original principal amount of the Term B-2 Loan starting in the second quarter of 2017, with the remaining amount outstanding to be repaid in full on the seventh anniversary of the funding date of the Term B-2 Loan. As of June 30, 2017, the Company had a €997.5 million outstanding term loan balance, or a total of approximately $1,138.7 million at the exchange rate in effect on June 30, 2017, under the Term B-2 Loan commitment. As of June 30, 2017, debt issuance costs related to the Term B-2 Loan, net of amortization, were €12.1 million or $12.8 million. Senior Notes As of June 30, 2017 and December 31, 2016, the Company's senior notes consisted of the following (in thousands):
2027 Senior Notes In March 2017, the Company issued $1,250.0 million aggregate principal amount of 5.375% senior notes due May 15, 2027, which are referred to as the "2027 Senior Notes". Interest on the notes is payable semi-annually in arrears on May 15 and November 15 of each year, commencing on May 15, 2017. Debt issuance costs related to the 2027 Senior Notes were $16.8 million. The 2027 Senior Notes are unsecured and rank equal in right of payment to the Company's existing or future senior indebtedness and senior in right of payment to the Company's existing and future subordinated indebtedness. The senior notes are effectively subordinated to all of the existing and future secured debt, including debt outstanding under any bank facility or secured by any mortgage, to the extent of the assets securing such debt. They are also structurally subordinated to any existing and future indebtedness and other liabilities (including trade payables) of any of the Company's subsidiaries. The 2027 Senior Notes are governed by a supplemental indenture to the indenture between the Company and U.S. Bank National Association, as trustee, that also governs the Company's 5.875% Senior Notes due 2026, 5.375% Senior Notes due 2022, and 5.750% Senior Notes due 2025. The supplemental indenture contains covenants that limit the Company's ability and the ability of its subsidiaries to, among other things:
The 2027 Senior Notes also provide for optional redemption. At any time prior to May 15, 2020, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of the 2027 Senior Notes (calculated giving effect to any issuance of additional notes of such series) outstanding under the 2027 Senior Notes indenture, at a redemption price equal to 105.375% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date, with the net cash proceeds of one or more equity offerings, provided that (i) at least 65% of the aggregate principal amount of the 2027 Senior Notes (calculated giving effect to any issuance of additional notes) issued under the 2027 indenture remains outstanding immediately after the occurrence of such redemption and (ii) the redemption must occur within 90 days of the date of the closing of such equity offering. On or after May 15, 2022, the Company may redeem all or a part of the 2027 Senior Notes, on any one or more occasions, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon, if any, to, but not including, the applicable redemption date, if redeemed during the twelve-month period beginning May 15 of the years indicated below:
In addition, at any time prior to May 15, 2022, the Company may also redeem all or a part of the 2027 Senior Notes at a redemption price equal to 100% of the principal amount of 2027 Senior Notes redeemed plus the applicable premium (the "2027 Senior Notes Applicable Premium") as of, and accrued and unpaid interest, if any, to, but not including, the date of the redemption, subject to the rights of the holders of record of 2027 Senior Notes on the relevant record date to receive interest due on the relevant interest payment date. The 2027 Senior Notes Applicable Premium is defined as the greater of:
As of June 30, 2017, debt issuance costs related to the 2027 Senior Notes, net of amortization, were $16.4 million. Maturities of Debt Facilities The following table sets forth maturities of the Company's debt, including mortgage and loans payable, and senior notes, gross of debt issuance costs and debt discounts, as of June 30, 2017 (in thousands):
Fair Value of Debt Facilities The following table sets forth the estimated fair values of the Company's mortgage and loans payable, and senior notes, including current maturities, as of (in thousands):
The fair value of the mortgage and loans payable, which are not publicly traded, was estimated by considering the Company's credit rating, current rates available to the Company for debt of the same remaining maturities and terms of the debt (Level 2). The fair value of the senior notes, which are traded in the public debt market, was based on quoted market prices (Level 1). Interest Charges The following table sets forth total interest costs incurred and total interest costs capitalized for the periods presented (in thousands):
Total interest paid, net of capitalized interest, during the three months ended June 30, 2017 and 2016 was $90.0 million and $82.7 million, respectively. Total interest paid, net of capitalized interest, during the six months ended June 30, 2017 and 2016 was $199.0 million and $155.0 million, respectively. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments Primarily as a result of the Company's various IBX expansion projects, as of June 30, 2017, the Company was contractually committed for $371.4 million of unaccrued capital expenditures, primarily for IBX infrastructure equipment not yet delivered and labor not yet provided, in connection with the work necessary to open these IBX data centers and make them available to customers for installation. In addition, the Company had numerous other, non-capital purchase commitments in place as of June 30, 2017, such as commitments to purchase power in select locations through the remainder of 2017 and thereafter, and other open purchase orders for goods or services to be delivered or provided during the remainder of 2017 and thereafter. Such other miscellaneous purchase commitments totaled $592.0 million as of June 30, 2017. Contingent Liabilities The Company estimates exposure on certain liabilities, such as indirect and property taxes, based on the best information available at the time of determination. With respect to real and personal property taxes, the Company records what it can reasonably estimate based on prior payment history, current landlord estimates or estimates based on current or changing fixed asset values in each specific municipality, as applicable. However, there are circumstances beyond the Company’s control whereby the underlying value of the property or basis for which the tax is calculated on the property may change, such as a landlord selling the underlying property of one of the Company’s IBX data center leases or a municipality changing the assessment value in a jurisdiction and, as a result, the Company’s property tax obligations may vary from period to period. Based upon the most current facts and circumstances, the Company makes the necessary property tax accruals for each of its reporting periods. However, revisions in the Company’s estimates of the potential or actual liability could materially impact its financial position, results of operations or cash flows. The Company's indirect and property tax filings in various jurisdictions are subject to examination by local tax authorities. The outcome of any examinations cannot be predicted with certainty. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations that would affect the adequacy of its tax accruals for each of the reporting periods. If any issues arising from the tax examinations are resolved in a manner inconsistent with the Company’s expectations, the revision of the estimates of the potential or actual liabilities could materially impact its financial position, results of operations, or cash flows. |
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Stockholders' Equity | Stockholders' Equity Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss, net of tax, by components are as follows (in thousands):
Changes in foreign currency exchange rates can have a significant impact to the Company's condensed consolidated balance sheets (as evidenced above in the Company's foreign currency translation gain or loss), as well as its condensed consolidated results of operations, as amounts in foreign currencies generally translate into more U.S. dollars when the U.S. dollar weakens or less U.S. dollars when the U.S. dollar strengthens. As of June 30, 2017, the U.S. dollar was generally weaker relative to certain of the currencies of the foreign countries in which the Company operates. This overall weakening of the U.S. dollar had an overall favorable impact on the Company's condensed consolidated financial position because the foreign denominations translated into more U.S. dollars as evidenced by an increase in foreign currency translation gain for the six months ended June 30, 2017 as reflected in the above table. In future periods, the volatility of the U.S. dollar as compared to the other currencies in which the Company operates could have a significant impact on its condensed consolidated financial position and results of operations including the amount of revenue that the Company reports in future periods. Common Stock In March 2017, the Company issued and sold 6,069,444 shares of its common stock in a public offering pursuant to a registration statement and a related prospectus and prospectus supplement, in each case filed with the SEC. The shares issued and sold included the full exercise of the underwriters' option to purchase 791,666 additional shares. The Company received net proceeds of approximately $2,126.3 million, after deducting underwriting discounts and commissions of $57.9 million and offering expenses of $0.8 million. Dividends On February 15, 2017, the Company declared a quarterly cash dividend of $2.00 per share, with a record date of February 27, 2017 and a payment date of March 22, 2017. During the three months ended March 31, 2017, the Company paid a total of $148.1 million in dividends. In addition, the Company accrued an additional $2.6 million in dividends payable for restricted stock units that have not yet vested. On April 26, 2017, the Company declared a quarterly cash dividend of $2.00 per share, with a record date of May 24, 2017 and a payment date of June 21, 2017. During the three months ended June 30, 2017, the Company paid a total of $156.3 million in dividends. In addition, the Company accrued an additional $2.7 million in dividends payable for restricted stock units that have not yet vested. Stock-Based Compensation In the first half of 2017, the Compensation Committee and the Stock Award Committee of the Company's Board of Directors approved the issuance of an aggregate of 511,548 shares of restricted stock units to certain employees, including executive officers, pursuant to the 2000 Equity Incentive Plan, as part of the Company's annual refresh program. These equity awards are subject to vesting provisions and have a weighted-average grant date fair value of $367.23 and a weighted-average requisite service period of 3.48 years. The valuation of restricted stock units with only a service condition or a service and performance condition requires no significant assumptions as the fair value for these types of equity awards is based solely on the fair value of the Company's stock price on the date of grant. The Company used revenues and adjusted funds from operations ("AFFO") as the performance measurements in the restricted stock units with both service and performance conditions that were granted in the first half of 2017. The Company uses a Monte Carlo simulation option-pricing model to determine the fair value of restricted stock units with a service and market condition. There were no significant changes in the assumptions used to determine the fair value of restricted stock units with a service and market condition that were granted in 2017 compared to the prior year. The following table presents, by operating expense category, the Company's stock-based compensation expense recognized in the Company's condensed consolidated statement of operations (in thousands):
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Segment Information |
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Segment Information | Segment Information While the Company has a single line of business, which is the design, build-out and operation of IBX data centers, it has determined that it has three reportable segments comprised of its Americas, EMEA and Asia-Pacific geographic regions. The Company's chief operating decision-maker evaluates performance, makes operating decisions and allocates resources based on the Company's revenues and adjusted EBITDA performance both on a consolidated basis and based on these three reportable segments. The Company defines adjusted EBITDA as income from operations plus depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, acquisition costs and gains on asset sales as presented below (in thousands):
The Company also provides the following additional segment disclosures (in thousands):
The Company's long-lived assets are located in the following geographic areas as of (in thousands):
Revenue information on a services basis is as follows (in thousands):
No single customer accounted for 10% or greater of the Company's revenues for the three and six months ended June 30, 2017 and 2016. No single customer accounted for 10% or greater of the Company's gross accounts receivable as of June 30, 2017 and December 31, 2016. |
Subsequent Events |
6 Months Ended |
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Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On August 2, 2017, the Company declared a quarterly cash dividend of $2.00 per share, which is payable on September 20, 2017 to the Company's common stockholders of record as of the close of business on August 23, 2017. On August 4, 2017, the Company entered into an equity distribution agreement with RBC Capital Market, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, establishing an "at the market" equity offering program, under which Equinix may offer and sell from time to time up to an aggregate of $750.0 million of its common stock in "at the market" transactions (the "ATM Program"). No sales have been made under the ATM Program to date. |
Basis of Presentation and Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by Equinix, Inc. ("Equinix" or the "Company") and reflect all adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary to fairly state the financial position and the results of operations for the interim periods presented. The condensed consolidated balance sheet data as of December 31, 2016 has been derived from audited consolidated financial statements as of that date. The condensed consolidated financial statements have been prepared in accordance with the regulations of the Securities and Exchange Commission ("SEC"), but omit certain information and footnote disclosure necessary to present the statements in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). For further information, refer to the Consolidated Financial Statements and Notes thereto included in Equinix’s Form 10-K as filed with the SEC on February 27, 2017. Results for the interim periods are not necessarily indicative of results for the entire fiscal year. |
Consolidation | Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Equinix and its subsidiaries, including the acquisitions of certain Verizon data center assets from May 1, 2017, the IO UK data center operating business from February 3, 2017, the Paris IBX data center from August 1, 2016 and Telecity Group plc ("TelecityGroup") from January 15, 2016. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Revenue Recognition | Revenue Recognition Equinix derives more than 90% of its revenues from recurring revenue streams, consisting primarily of (1) colocation, which includes the licensing of cabinet space and power; (2) interconnection offerings, such as cross connects and Equinix Exchange ports; (3) managed infrastructure services and (4) other revenues consisting of rental income from tenants or subtenants. The remainder of the Company’s revenues are from non-recurring revenue streams, such as installation revenues, professional services, contract settlements and equipment sales. Revenues from recurring revenue streams are generally billed monthly and recognized ratably over the term of the contract, generally one to three years for IBX data center colocation customers. Non-recurring installation fees, although generally paid in a lump sum upon installation, are deferred and recognized ratably over the period the customer is expected to benefit from the installation. Professional service fees are recognized in the period in which the services were provided and represent the culmination of a separate earnings process as long as they meet the criteria for separate recognition under the accounting standard related to revenue arrangements with multiple deliverables. Revenue from bandwidth and equipment sales is recognized on a gross basis in accordance with the accounting standard related to reporting revenue gross as a principal versus net as an agent, primarily because the Company acts as the principal in the transaction, takes title to products and services and bears inventory and credit risk. To the extent the Company does not meet the criteria for recognizing bandwidth and equipment services as gross revenue, the Company records the revenue on a net basis. Revenue from contract settlements, when a customer wishes to terminate their contract early, is generally recognized on a cash basis, when no remaining performance obligations exist, to the extent that the revenue has not previously been recognized. The Company guarantees certain service levels, such as uptime, as outlined in individual customer contracts. If these service levels are not achieved due to any failure of the physical infrastructure or offerings, or in the event of certain instances of damage to customer infrastructure within the Company’s IBX data centers, the Company would generally reduce revenue for any credits or cash payments given to the customer as a result. The Company generally determines such service level credits and cash payments prior to the associated revenue being recognized, and historically, these credits and cash payments have generally not been significant. Revenue is recognized only when the service has been provided and when there is persuasive evidence of an arrangement, the fee is fixed or determinable and collection of the receivable is reasonably assured. It is the Company’s customary business practice to obtain a signed master sales agreement and sales order prior to recognizing revenue in an arrangement. Taxes collected from customers and remitted to governmental authorities are reported on a net basis and are excluded from revenue. As a result of certain customer agreements being priced in currencies different from the functional currencies of the parties involved, under applicable accounting rules, the Company is deemed to have foreign currency forward contracts embedded in these contracts. The Company refers to these as foreign currency embedded derivatives (see Note 6). These instruments are separated from their host contracts and held on the Company’s consolidated balance sheet at their fair value. The majority of these foreign currency embedded derivatives arise in certain of the Company’s subsidiaries where the local currency is the subsidiary’s functional currency and the customer contract is denominated in the U.S. dollar. Changes in their fair values are recognized within revenues in the Company’s consolidated statements of operations. The Company assesses collectability based on a number of factors, including past transaction history with the customer and the credit-worthiness of the customer. The Company generally does not request collateral from its customers although in certain cases the Company obtains a security interest in a customer’s equipment placed in its IBX data centers or obtains a deposit. If the Company determines that collection of a fee is not reasonably assured, the fee is deferred and revenue is recognized at the time collection becomes reasonably assured, which is generally upon receipt of cash. In addition, the Company also maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments for which the Company had expected to collect the revenues. If the financial condition of the Company’s customers were to deteriorate or if they became insolvent, resulting in an impairment of their ability to make payments, greater allowances for doubtful accounts may be required. Management specifically analyzes accounts receivable and current economic news and trends, historical bad debts, customer concentrations, customer credit-worthiness and changes in customer payment terms when evaluating revenue recognition and the adequacy of the Company’s reserves. Any amounts that were previously recognized as revenue and subsequently determined to be uncollectible are charged to bad debt expense included in general and administrative expense in the consolidated statements of operations. A specific bad debt reserve of up to the full amount of a particular invoice value is provided for certain problematic customer balances. An additional reserve is established for all other accounts based on the age of the invoices and an analysis of historical credits issued. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable. |
Income Taxes | Income Taxes The Company began operating as a real estate investment trust for federal income tax purposes ("REIT") effective January 1, 2015, and thereafter received a favorable private letter ruling ("PLR") from the U.S. Internal Revenue Service ("IRS") that validated the Company's position with respect to specified REIT compliance matters. As a result, the Company may deduct the distributions made to its stockholders from taxable income generated by the operations of the Company parent and its qualified REIT subsidiaries ("QRSs"). The Company’s dividends paid deduction generally eliminates the U.S. taxable income of the Company parent and its QRSs, resulting in no U.S. income tax due. However, the Company's taxable REIT subsidiaries ("TRSs") will continue to be subject to income taxes on any taxable income generated by them. In addition, the foreign operations of the Company will continue to be subject to local income taxes regardless of whether the foreign operations are operated as a QRS or TRS. The Company provides for income taxes during interim periods based on the estimated effective tax rate for the year. The effective tax rate is subject to change in the future due to various factors such as the operating performance of the Company, tax law changes and future business acquisitions. |
Assets Held for Sale and Discontinued Operations | Assets Held for Sale and Discontinued Operations Assets and liabilities to be disposed of that meet all of the criteria to be classified as held for sale as set forth in the accounting standard for impairment or disposal of long-lived assets are reported at the lower of their carrying amounts or fair values less costs to sell. Assets are not depreciated or amortized while they are classified as held for sale. A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results. The accounting guidance requires a business activity that, on acquisition, meets the criteria to be classified as held for sale be reported as a discontinued operation. For further information on the Company's assets held for sale and discontinued operations, see Notes 4 and 5. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to conform to current period presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In May 2017, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-09 Compensation–Stock Compensation (Topic 718). This ASU was issued primarily to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This ASU affects any entity that changes the terms or conditions of a share-based payment award. This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU is effective for annual or any interim reporting periods beginning after December 15, 2017 with early adoption permitted. The adoption of ASU 2017-09 is not expected to have a significant impact on its consolidated financial statements. In March 2017, FASB issued ASU No. 2017-07 Compensation–Retirement Benefits (Topic 715). This ASU was issued primarily to improve the presentation of net periodic pension cost and net periodic post-retirement benefit cost. This ASU requires that an employer reports the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. It also requires the other components of net periodic pension cost and net periodic post-retirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Additionally, only the service cost component is eligible for capitalization, when applicable. This ASU is effective for annual or any interim reporting periods beginning after December 15, 2017. While the Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements, the Company does not expect the adoption of ASU 2017-07 to have a significant impact on its consolidated financial statements due, in part, to the immateriality of a retirement benefit plan it holds. In February 2017, FASB issued ASU No. 2017-05 Other Income—Gains and Losses from the Derecognition of Non-financial Assets (Subtopic 610-20). This ASU is to clarify the scope of the non-financial asset guidance in Subtopic 610-20 and to add guidance for partial sales of non-financial assets. This ASU defines the term in substance non-financial asset and clarifies that non-financial assets within the scope of Subtopic 610-20 may include non-financial assets transferred within a legal entity to a counterparty. The ASU also provides guidance on the accounting for what often are referred to as partial sales of non-financial assets within the scope of Subtopic 610-20 and contributions of non-financial assets to a joint venture or other non-controlled investee. This ASU is effective for annual or any interim reporting periods beginning after December 15, 2017. Early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements, but does not expect to early adopt this ASU. In January 2017, FASB issued ASU No. 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU is to simplify the subsequent measurement of goodwill. The ASU eliminates step 2 from the goodwill impairment test and the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU should be applied on a prospective basis. This ASU is effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. In January 2017, FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those periods with early adoption being permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and expects to adopt the standard prospectively on January 1, 2018. In October 2016, FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This ASU requires the recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU is effective for fiscal years and interim period within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization's portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company expects this ASU to impact its accounts receivable and is currently evaluating the extent of the impact that the adoption of this ASU will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"). Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. While the Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements, the Company believes this standard will have a significant impact on its consolidated financial statements due, in part, to the substantial amount of leases it has. In January 2016, the FASB issued ASU 2016-01, Financial Instruments- Overall (Subtopic 825-10) ("ASU 2016-01"), which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income other than those accounted for under equity method of accounting or those that result in consolidation of the investees. The ASU also requires that an entity present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the ASU eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company currently holds publicly traded equity securities that are classified as “available-for-sale” and are carried at fair value with unrealized gains and losses reported in stockholders’ equity as a component of accumulated other comprehensive income (loss). Upon the adoption of this ASU, the unrealized gains and losses will be recognized through net income. The Company has not elected to measure its financial liabilities at fair value therefore, does not expect to have an impact on the accounting for its financial liabilities. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09") Topic 606 and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016 and May 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20, respectively (ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12 and ASU 2016-20 collectively, Topic 606). Topic 606 will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of Topic 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. Topic 606 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. Topic 606 allows entities to adopt with one of these two methods: full retrospective, which applies retrospectively to each prior reporting period presented, or modified retrospective, which recognizes the cumulative effect of initially applying the revenue standard as an adjustment to the opening balance of retained earnings in the period of initial application. The Company currently anticipates adopting the standard using the modified retrospective method. Topic 606, as amended, is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company will adopt the standard on January 1, 2018. While the Company is continuing to evaluate all potential impacts of the standard, the Company believes the most significant impact relates to its accounting for installation revenue and the cost to obtain contracts. Under the new standard, the Company expects to recognize installation revenue over the contract period rather than over the estimated installation life. Under the new standard, the Company is also required to capitalize and amortize certain costs to obtain contracts. Therefore, these costs to obtain contracts will not be immediately expensed, but will be capitalized and amortized over the estimated contract term plus estimated renewal term. Accounting Standards Adopted In January 2017, FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is effective immediately. The Company adopted ASU 2017-03 in the three months ended March 31, 2017 by including appropriate disclosure requirements within its condensed consolidated financial statements to adhere to this new ASU. In December 2016, FASB issued ASU No. 2016-19, Technical Corrections and Improvements. This ASU covers a wide range of Topics in the Accounting Standards Codification. Certain aspects of this ASU were effective immediately, while a few of the corrections are effective for the Company for its fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted ASU 2016-19 in the three months ended March 31, 2017. The adoption of ASU 2016-19 did not impact the Company's condensed consolidated financial statements. In November 2016, FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU applies to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows. The ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for the Company for its fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with early adoption being permitted. This ASU should be applied using a retrospective transition method to each period presented. The Company adopted ASU 2016-18 in the three months ended March 31, 2017 and applied this ASU retrospectively to the periods presented in the Company's condensed consolidated statements of cash flows. As a result, net cash used in investing activities for the six months ended June 30, 2016 was adjusted to exclude the change in restricted cash and increased the previously reported amount by $466.3 million. Restricted cash amounts are primarily time deposits or cash set side as a pledge for our mortgage loan in Germany, an escrow account for a data center project and collateral for the Company's various bank guarantees for the periods ended June 30, 2017 and 2016. In October 2016, FASB issued ASU No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control. This ASU alters how a decision maker needs to consider indirect interests in a variable interest entity ("VIE") held through an entity under common control. Under this ASU, if a decision maker is required to evaluate whether it is the primary beneficiary of a VIE, it will need to consider only its proportionate indirect interest in the VIE held through a common control party. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-17 in the three months ended March 31, 2017. The adoption of this standard did not impact the Company's condensed consolidated financial statements as it does not hold any interests in a VIE through related parties that are under common control. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU provides guidance on the classification of eight cash flow issues to reduce the existing diversification in practice, including (a) debt prepayment or debt extinguishment costs; (b) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (c) contingent consideration payments made after a business combination; (d) proceeds from settlement of insurance claims; (e) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (f) distributions received from equity method investees; (g) beneficial interests in securitization transactions; and (h) separately identifiable cash flows and application of the predominance principle. The ASU is effective for fiscal years and interim period within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU 2016-15 in the three months ended March 31, 2017 and applied this ASU using a retrospective transition method to each period presented in the Company's condensed consolidated statements of cash flows. The adoption of ASU 2016-15 did not impact the Company's condensed consolidated statements of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). This ASU simplifies several areas of the accounting for share-based payment award transactions, including (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. The Company adopted ASU 2016-09 in the three months ended March 31, 2017. Beginning on January 1, 2017, the Company began to record the excess tax benefits from stock-based compensation as income tax expense through the statement of operations instead of additional paid-in capital as required under the previous guidance. There was no adjustment to excess tax benefits from stock-based compensation recorded as additional paid-in capital in prior years. Excess tax benefits that were not previously recognized, as well as a valuation allowance recognized for deferred tax assets as a result of the adoption of this ASU, were recorded on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of 2017 totaling $1.1 million. As a part of the adoption of this ASU, stock compensation awards will have more dilutive effect on the Company's earnings per share prospectively. Under this guidance, cash flows related to excess tax benefits will no longer be separately classified as financing activities apart from other income tax cash flow. The Company elected to apply this part of the guidance retrospectively, which resulted in no change in either net cash provided by operating activities or net cash used in financing activities in the Company's condensed consolidated statement of cash flows for the six months ended June 30, 2016 to conform with the current period presentation. Additionally, this guidance permits entities to make an accounting policy to estimate forfeitures each period or to account for forfeitures as they occur. The Company elected to continue to estimate forfeitures. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments ("ASU 2016-06"). This ASU clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this ASU is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. This guidance is to be applied on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year in which the amendments are effective, and is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted ASU 2016-06 in the three months ended March 31, 2017. The adoption of this standard did not impact the Company's condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships ("ASU 2016-05"). This ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. This ASU may be applied prospectively or using a modified retrospective approach, and is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted ASU 2016-05 in the three months ended March 31, 2017. The adoption of ASU 2016-05 did not impact the Company's condensed consolidated financial statements. |
Cash Flow Hedges | Cash Flow Hedges. The Company hedges its foreign currency translation exposure for forecasted revenues and expenses in its EMEA region between the U.S. Dollar and the British Pound, Euro, Swedish Krona and Swiss Franc. The foreign currency forward and option contracts that the Company uses to hedge this exposure are designated as cash flow hedges under the accounting standard for derivatives and hedging. |
Derivatives Not Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments Embedded Derivatives. The Company is deemed to have foreign currency forward contracts embedded in certain of the Company's customer agreements that are priced in currencies different from the functional or local currencies of the parties involved. These embedded derivatives are separated from their host contracts and carried on the Company's balance sheet at their fair value. The majority of these embedded derivatives arise as a result of the Company's foreign subsidiaries pricing their customer contracts in the U.S. dollar. Gains and losses on these embedded derivatives are included within revenues in the Company's condensed consolidated statements of operations. During the three months ended June 30, 2017 and June 30, 2016, gains (losses) associated with these embedded derivatives were not significant. During the six months ended June 30, 2017, the losses associated with these embedded derivatives were $6.8 million and during the six months ended June 30, 2016, the losses associated with these embedded derivatives were $8.1 million. Economic Hedges of Embedded Derivatives. The Company uses foreign currency forward contracts to manage the foreign exchange risk associated with the Company's customer agreements that are priced in currencies different from the functional or local currencies of the parties involved ("economic hedges of embedded derivatives"). Foreign currency forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon price on an agreed-upon settlement date. Gains and losses on these contracts are included within revenues in the Company's condensed consolidated statements of operations along with gains and losses of the related embedded derivatives. The Company entered into various economic hedges of embedded derivatives during the three and six months ended June 30, 2017 and 2016. During the three and six months ended June 30, 2017, the gains (losses) associated with these contracts were not significant. During the three months ended June 30, 2016, the gains (losses) associated with these contracts were not significant. During the six months ended June 30, 2016, the gains associated with these contracts were $5.6 million. Foreign Currency Forward and Option Contracts. The Company also uses foreign currency forward and option contracts to manage the foreign exchange risk associated with certain foreign currency-denominated assets and liabilities. As a result of foreign currency fluctuations, the U.S. dollar equivalent values of its foreign currency-denominated assets and liabilities change. Gains and losses on these contracts are included in other income (expense), net in the Company's condensed consolidated statements of operations, along with foreign currency gains and losses of the related foreign currency-denominated assets and liabilities associated with these foreign currency forward and option contracts. The Company entered into various foreign currency forward and option contracts during the three and six months ended June 30, 2017 and 2016. During the three and six months ended June 30, 2017, the Company recognized net losses of $22.5 million and $37.2 million, respectively, associated with these contracts. During the three and six months ended June 30, 2016, the Company recognized net gains of $49.1 million and $41.5 million, respectively, associated with these contracts. |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments. The fair value of the Company's investments in money market funds approximates their face value. Such instruments are included in cash equivalents. The Company's money market funds and publicly traded equity securities are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices for identical instruments in active markets. The fair value of the Company's other investments approximate their face value and include certificates of deposit. The fair value of these investments is priced based on the quoted market price for similar instruments or nonbinding market prices that are corroborated by observable market data. Such instruments are classified within Level 2 of the fair value hierarchy. The Company determines the fair values of its Level 2 investments by using inputs such as actual trade data, benchmark yields, broker/dealer quotes, and other similar data, which are obtained from quoted market prices, custody bank, third-party pricing vendors, or other sources. The Company uses such pricing data as the primary input to make its assessments and determinations as to the ultimate valuation of its investment portfolio and has not made, during the periods presented, any material adjustments to such inputs. The Company is responsible for its condensed consolidated financial statements and underlying estimates. |
Derivative Assets and Liabilities | Derivative Assets and Liabilities. For derivatives, the Company uses forward contract and option models employing market observable inputs, such as spot currency rates and forward points with adjustments made to these values utilizing published credit default swap rates of its foreign exchange trading counterparties and other comparable companies. The Company has determined that the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, therefore the derivatives are categorized as Level 2. |
Segment Information | While the Company has a single line of business, which is the design, build-out and operation of IBX data centers, it has determined that it has three reportable segments comprised of its Americas, EMEA and Asia-Pacific geographic regions. The Company's chief operating decision-maker evaluates performance, makes operating decisions and allocates resources based on the Company's revenues and adjusted EBITDA performance both on a consolidated basis and based on these three reportable segments. |
Earnings Per Share (Tables) |
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Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share ("EPS") for the periods presented (in thousands, except per share amounts):
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Anti-dilutive Potential Shares of Common Stock Excluded from Computation of Earnings Per Share | The following table sets forth weighted-average outstanding potential shares of common stock that are not included in the diluted earnings per share calculation above because to do so would be anti-dilutive for the periods indicated (in thousands):
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Acquisitions (Tables) |
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Pro forma consolidated operations | The following table sets forth the unaudited pro forma combined results of operations for the three and six months ended June 30, 2017 and 2016 (in thousands, except per share amounts):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The preliminary purchase price allocation was as follows (in thousands):
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Acquired Identifiable Intangible Assets | The following table presents certain information on the acquired identifiable intangible assets (dollars in thousands):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The purchase price allocation, which excludes settlement of the Paris 3 financing obligations, was as follows (in thousands):
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Acquired Identifiable Intangible Assets | The following table presents certain information on the acquired identifiable intangible assets (dollars in thousands):
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Telecity Group plc [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | he final allocation of the purchase price is as follows (in thousands):
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Acquired Identifiable Intangible Assets | The following table presents certain information on the acquired intangible assets (dollars in thousands):
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Discontinued Operations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Results of Discontinued Operations | The following table presents the financial results of the Company's discontinued operations for the three and six months ended June 30, 2016 (in thousands).
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Derivatives and Hedging Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Cash Flow Hedges | As of June 30, 2017, the Company's cash flow hedge instruments had maturity dates ranging from July 2017 to June 2019 as follows (in thousands):
As of December 31, 2016, the Company's cash flow hedge instruments had maturity dates ranging from January 2017 to November 2018 as follows (in thousands):
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Schedule of Fair Value of Derivative Instruments Recognized in Consolidated Balance Sheets | The following table presents the fair value of derivative instruments recognized in the Company's condensed consolidated balance sheets as of June 30, 2017 (in thousands):
The following table presents the fair value of derivative instruments recognized in the Company's condensed consolidated balance sheets as of December 31, 2016 (in thousands):
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The Company's financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 were as follows (in thousands):
The Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 were as follows (in thousands):
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Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Capital Lease and Other Financing Obligations | The Company's capital lease and other financing obligations are summarized as follows (in thousands):
(1) Other financing obligations are primarily build-to-suit lease obligations. |
Debt Facilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Debt | As of June 30, 2017 and December 31, 2016, the Company's mortgage and loans payable consisted of the following (in thousands):
As of June 30, 2017 and December 31, 2016, the Company's senior notes consisted of the following (in thousands):
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Summary of Senior Notes Redemption Price Percentage | On or after May 15, 2022, the Company may redeem all or a part of the 2027 Senior Notes, on any one or more occasions, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon, if any, to, but not including, the applicable redemption date, if redeemed during the twelve-month period beginning May 15 of the years indicated below:
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Summary of Maturities of Debt Facilities | The following table sets forth maturities of the Company's debt, including mortgage and loans payable, and senior notes, gross of debt issuance costs and debt discounts, as of June 30, 2017 (in thousands):
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Fair Value of Debt Facilities | The following table sets forth the estimated fair values of the Company's mortgage and loans payable, and senior notes, including current maturities, as of (in thousands):
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Schedule of Interest Charges Incurred | The following table sets forth total interest costs incurred and total interest costs capitalized for the periods presented (in thousands):
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Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss, net of tax, by components are as follows (in thousands):
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Stock-Based Compensation Expense Recognized in Company's Condensed Consolidated Statement of Operations | The following table presents, by operating expense category, the Company's stock-based compensation expense recognized in the Company's condensed consolidated statement of operations (in thousands):
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Adjusted EBITDA | The Company defines adjusted EBITDA as income from operations plus depreciation, amortization, accretion, stock-based compensation expense, restructuring charges, impairment charges, acquisition costs and gains on asset sales as presented below (in thousands):
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Segment Disclosures | The Company also provides the following additional segment disclosures (in thousands):
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Segment Long-Lived Assets | The Company's long-lived assets are located in the following geographic areas as of (in thousands):
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Revenue Information on Services Basis | Revenue information on a services basis is as follows (in thousands):
|
Basis of Presentation and Significant Accounting Policies (Detail) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jan. 01, 2017 |
|
Accounting Policies [Abstract] | |||
Effective income tax rate, continuing operations | 20.50% | 61.70% | |
Restatement adjustment [Member] | Accounting Standards Update 2016-18 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase in restricted cash | $ 466.3 | ||
Retained earnings [Member] | New accounting pronouncement, early adoption, effect [Member] | Accounting Standards Update 2016-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect adjustment | $ 1.1 |
Earnings Per Share - Anti-dilutive Potential Shares of Common Stock Excluded from Computation of Earnings Per Share (Detail) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive potential shares of common stock excluded from computation of earnings per share, amount | 4 | 1,634 | 52 | 1,798 |
Common stock related to employee equity awards [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive potential shares of common stock excluded from computation of earnings per share, amount | 4 | 7 | 52 | 3 |
4.75% Convertible Subordinated Notes [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive potential shares of common stock excluded from computation of earnings per share, amount | 0 | 1,627 | 0 | 1,795 |
Interest rate (percent) | 4.75% | 4.75% |
Acquisitions - Unaudited Pro Forma (Details) - USD ($) $ / shares in Units, $ in Thousands |
2 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Business Acquisition [Line Items] | |||||
Revenue | $ 1,066,421 | $ 900,510 | $ 2,015,946 | $ 1,744,666 | |
Net income (loss) from continuing operations | $ 45,805 | $ 39,302 | $ 87,867 | $ 1,975 | |
Basic EPS (in dollars per share) | $ 0.59 | $ 0.64 | $ 1.17 | $ 0.20 | |
Diluted EPS (in dollars per share) | $ 0.58 | $ 0.64 | $ 1.16 | $ 0.20 | |
Verizon [Member] | |||||
Business Acquisition [Line Items] | |||||
Revenue | $ 86,700 | $ 86,700 | $ 86,700 | ||
Verizon [Member] | Pro Forma [Member] | |||||
Business Acquisition [Line Items] | |||||
Revenue | 1,101,848 | $ 1,010,833 | 2,157,653 | $ 1,965,312 | |
Net income (loss) from continuing operations | $ 74,831 | $ 30,673 | $ 124,160 | $ (58,993) | |
Basic EPS (in dollars per share) | $ 0.96 | $ 0.40 | $ 1.60 | $ (0.79) | |
Diluted EPS (in dollars per share) | $ 0.95 | $ 0.40 | $ 1.58 | $ (0.79) |
Assets Held for Sale (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2016
JPY (¥)
|
Nov. 30, 2016
USD ($)
|
Oct. 31, 2016
JPY (¥)
|
Oct. 31, 2016
USD ($)
|
Feb. 28, 2016
USD ($)
|
Jun. 30, 2017
USD ($)
|
Mar. 31, 2017
JPY (¥)
|
Mar. 31, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Long Lived Assets Held-for-sale [Line Items] | ||||||||||||
Gains on asset sales | $ 0 | $ 0 | $ 0 | $ 5,242 | ||||||||
Assets held for sale | 0 | 0 | $ 0 | |||||||||
Liabilities held for sale | $ 0 | $ 0 | $ 0 | |||||||||
San Jose Land Parcel [Member] | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||||||||||||
Long Lived Assets Held-for-sale [Line Items] | ||||||||||||
Gains on asset sales | $ 5,200 | |||||||||||
Bit-isle [Member] | Solar Power Assets [Member] | ||||||||||||
Long Lived Assets Held-for-sale [Line Items] | ||||||||||||
Proceeds from sale of property, plant and equipment | ¥ 2,500,000,000 | $ 22,100 | ¥ 400,000,000 | $ 3,800 | ¥ 5,313,400,000 | $ 47,800 |
Discontinued Operations - Additional Information (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Telecity Group plc [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Capital expenditure, discontinued operations | $ 31.5 |
Discontinued Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2016 |
|
Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract] | ||
Revenues | $ 30,401 | $ 50,982 |
Cost of revenues | 13,490 | 25,100 |
Sales and marketing | 979 | 1,196 |
General and administrative | 6,920 | 7,303 |
Total costs and operating expenses | 21,389 | 33,599 |
Income from discontinued operations | 9,012 | 17,383 |
Interest and other, net | (708) | (1,177) |
Income from discontinued operations before income taxes | 8,304 | 16,206 |
Income tax expense | (2,895) | (4,581) |
Net income from discontinued operations, net of tax | $ 5,409 | $ 11,625 |
Derivatives and Hedging Activities - Summary of Cash Flow Hedges (Detail) - Cash flow hedges [Member] - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Derivative assets | $ 177,873 | $ 545,638 |
Notional Amount, Derivative liabilities | 449,147 | 42,207 |
Notional Amount, Total | 627,020 | 587,845 |
Fair Value, Derivative assets | 10,284 | 44,570 |
Fair Value, Derivative liabilities | (18,049) | (1,815) |
Fair Value, Total | (7,765) | 42,755 |
Unrealized gain (loss) on cash flow hedging instruments, derivative assets | 9,375 | 42,634 |
Unrealized gain (loss) on cash flow hedging instruments, derivative liabilities | (20,884) | (1,453) |
Unrealized gain (loss) on cash flow hedging instruments | (11,509) | 41,181 |
Unrealized gain (loss) on cash flow hedges [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Net loss to be reclassified within 12 months | $ (3,001) | $ 31,900 |
Leases - Additional Information (Detail) $ in Thousands, € in Millions, ¥ in Millions |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
May 15, 2017
EUR (€)
|
May 15, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2017
JPY (¥)
|
Jun. 30, 2017
USD ($)
|
May 15, 2017
USD ($)
|
|
Capital Leased Assets [Line Items] | |||||||||
Payments to acquire lease | $ 48,580 | $ 28,118 | |||||||
Financing lease, settled amount | 44,460 | 45,335 | |||||||
Loss on debt extinguishment | $ (16,444) | $ (605) | $ (19,947) | $ (605) | |||||
Erfpacht [Member] | |||||||||
Capital Leased Assets [Line Items] | |||||||||
Payments to acquire lease | € 26.7 | $ 30,400 | |||||||
AM5 [Member] | |||||||||
Capital Leased Assets [Line Items] | |||||||||
Financing lease, settled amount | 20.0 | 22,800 | |||||||
Loss on debt extinguishment | 7.2 | $ 8,200 | |||||||
TY5 Tokyo [Member] | |||||||||
Capital Leased Assets [Line Items] | |||||||||
Capital lease obligation | ¥ 547.5 | $ 70,100 | |||||||
Other assets [Member] | |||||||||
Capital Leased Assets [Line Items] | |||||||||
Ground lease | € 6.7 | $ 7,600 |
Debt Facilities - Mortgage and Loans Payable (Detail) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Long term debt, gross | $ 2,626,077 | $ 1,457,964 |
Less the amount representing debt discount and debt issuance cost | (33,593) | (22,811) |
Add the amount representing mortgage premium | 1,985 | 1,862 |
Loans payable current and non current | 2,594,469 | 1,437,015 |
Less current portion | (83,022) | (67,928) |
Loans payable, noncurrent | 2,511,447 | 1,369,087 |
Term loans [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, gross | 2,580,198 | 1,413,582 |
Mortgage payable and other loans payable [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, gross | $ 45,879 | $ 44,382 |
Debt Facilities Debt Facilities - 2027 Senior Notes Redemption Rates (Details) - Senior Notes [Member] - 5.375% Senior Notes due 2027 [Member] |
6 Months Ended |
---|---|
Jun. 30, 2017 | |
2022 [Member] | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 102.688% |
2023 [Member] | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 101.792% |
2024 [Member] | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 100.896% |
2025 and thereafter [Member] | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 100.00% |
Debt Facilities - Summary of Maturities of Debt Facilities (Detail) $ in Thousands |
Jun. 30, 2017
USD ($)
|
---|---|
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2017 (6 months remaining) | $ 41,500 |
2018 | 83,067 |
2019 | 381,590 |
2020 | 543,467 |
2021 | 354,717 |
Thereafter | 6,323,721 |
Total long term debt | $ 7,728,062 |
Debt Facilities - Fair Value of Debt Facilities (Detail) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Disclosure [Abstract] | ||
Mortgage and loans payable | $ 2,638,356 | $ 1,461,954 |
Senior notes | $ 5,421,585 | $ 4,033,985 |
Debt Facilities - Interest Charges (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Debt Disclosure [Abstract] | ||||
Interest expense | $ 119,042 | $ 100,332 | $ 230,726 | $ 201,195 |
Interest capitalized | 7,999 | 3,183 | 14,399 | 5,476 |
Interest charges incurred | 127,041 | 103,515 | 245,125 | 206,671 |
Interest paid, net of capitalized interest | $ 90,000 | $ 82,700 | $ 199,000 | $ 155,000 |
Commitments and Contingencies - Additional Information (Detail) $ in Millions |
Jun. 30, 2017
USD ($)
|
---|---|
Capital expenditures [Member] | |
Other Commitments [Line Items] | |
Purchase commitments | $ 371.4 |
Miscellaneous purchase commitments [Member] | |
Other Commitments [Line Items] | |
Purchase commitments | $ 592.0 |
Stockholders' Equity - Stock-Based Compensation Expense Recognized in Company's Condensed Consolidated Statement of Operations (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 45,625 | $ 39,323 | $ 83,948 | $ 73,838 |
Cost of revenues [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 3,178 | 3,441 | 6,089 | 6,438 |
Sales and marketing [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 13,426 | 10,714 | 24,398 | 20,485 |
General and administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 29,021 | $ 25,168 | $ 53,461 | $ 46,915 |
Segment Information - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2017
Segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Schedule of Adjusted EBITDA (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | $ 509,308 | $ 420,291 | $ 936,882 | $ 800,941 |
Depreciation, amortization and accretion expense | (252,386) | (213,719) | (471,399) | (415,872) |
Stock-based compensation expense | (45,625) | (39,323) | (83,948) | (73,838) |
Acquisition costs | (26,402) | (15,594) | (29,427) | (52,130) |
Gains on asset sales | 0 | 0 | 0 | 5,242 |
Income from continuing operations | 184,895 | 151,655 | 352,108 | 264,343 |
Americas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | 258,151 | 195,028 | 456,770 | 379,488 |
EMEA [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | 141,622 | 133,455 | 271,176 | 244,944 |
Asia-Pacific [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | $ 109,535 | $ 91,808 | $ 208,936 | $ 176,509 |
Segment Information - Segment Disclosures (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 1,066,421 | $ 900,510 | $ 2,015,946 | $ 1,744,666 |
Total depreciation and amortization | 254,786 | 212,051 | 471,792 | 412,585 |
Capital expenditures | 348,572 | 249,867 | 625,814 | 447,567 |
Americas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 533,608 | 413,471 | 970,055 | 817,865 |
Total depreciation and amortization | 124,342 | 78,402 | 212,269 | 154,661 |
Capital expenditures | 160,679 | 115,989 | 314,114 | 199,489 |
EMEA [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 322,944 | 300,609 | 637,791 | 568,465 |
Total depreciation and amortization | 78,962 | 82,504 | 155,130 | 158,554 |
Capital expenditures | 151,485 | 86,582 | 235,069 | 143,855 |
Asia-Pacific [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 209,869 | 186,430 | 408,100 | 358,336 |
Total depreciation and amortization | 51,482 | 51,145 | 104,393 | 99,370 |
Capital expenditures | $ 36,408 | $ 47,296 | $ 76,631 | $ 104,223 |
Segment Information - Long-Lived Assets (Detail) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Company's long-lived assets | $ 8,746,595 | $ 7,199,210 |
Americas [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Company's long-lived assets | 4,345,418 | 3,339,518 |
EMEA [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Company's long-lived assets | 2,773,988 | 2,355,943 |
Asia-Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Company's long-lived assets | $ 1,627,189 | $ 1,503,749 |
Subsequent Events - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Aug. 02, 2017 |
Apr. 26, 2017 |
Feb. 15, 2017 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Aug. 04, 2017 |
|
Subsequent Event [Line Items] | ||||||||
Quarterly cash dividend declared (in dollars per share) | $ 2.00 | $ 2.00 | $ 2 | $ 1.75 | $ 4 | $ 3.5 | ||
Subsequent event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Quarterly cash dividend declared (in dollars per share) | $ 2.00 | |||||||
Equity offering agreement, authorized amount | $ 750,000,000.0 |
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