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 of TelecityGroup in the United Kingdom, Netherlands and Germany. These TelecityGroup data centers, on acquisition, met the criteria to be classified as held for sale and were therefore reported as discontinued operations. As of January 15, 2016, the date of TelecityGroup acquisition, depreciation and amortization of the reported discontinued operations were ceased.

On July 5, 2016, the Company completed the sale of these data centers and related assets to Digital Realty for approximately €304.6 million and £376.2 million, or approximately $827.3 million at the exchange rates in effect on July 5, 2016. The Company recognized a gain on sale of the TelecityGroup data centers in discontinued operations of $4.2 million for the three months ended September 30, 2016. The results of operations for these data centers that were divested have been reported as net income from discontinued operations, net of tax, from January 15, 2016, the date of TelecityGroup acquisition, through July 5, 2016 in the Company's condensed consolidated statements of operations. The results of operations for these data centers during the three months ended September 30, 2016 were not significant. Capital expenditures from the date of acquisition through the date of sale were $31.5 million.

The Company did not record income from discontinued operations, net of tax for the three and nine months ended September 30, 2017. The following table presents the financial results of the Company's discontinued operations for the nine months ended September 30, 2016 (in thousands).



	Nine Months Ended September 30, 2016
Revenues	$	48,782
Costs and operating expenses:
Cost of revenues	24,795
Sales and marketing	1,030
General and administrative	7,026
Total costs and operating expenses	32,851
Income from discontinued operations	15,931
Interest and other, net	(1,286		)
Income from discontinued operations before income taxes	14,645
Income tax expense	(4,581		)
Gain on sale of discontinued operations, net of income taxes	4,242
Net income from discontinued operations, net of tax	$	14,306