Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Rollforward

The following tables provide a rollforward of stockholders' equity for the three months ended March 31, 2020 and 2019 (in thousands):



														AOCI (Loss)			Retained Earnings			Equinix Stockholders' Equity			Non-controlling Interests			Total Stockholders' Equity
	Common Stock			Treasury Stock					Additional Paid-in Capital		Accumulated Dividends
	Shares	Amount		Shares		Amount			Additional Paid-in Capital		Accumulated Dividends
Balance as of December 31, 2019	85,700,953	$	86	(392,567	)	$	(144,256	)	$	12,696,433	$	(4,168,469	)	$	(934,613	)	$	1,391,425		$	8,840,606		$	(224	)	$	8,840,382
Adjustment from adoption of new accounting standard update	—	—		—		—			—		—			—			(900		)	(900		)	—			(900		)
Net income	—	—		—		—			—		—			—			118,792			118,792			165			118,957
Other comprehensive loss	—	—		—		—			—		—			(272,056		)	—			(272,056		)	(11		)	(272,067		)
Issuance of common stock and release of treasury stock for employee equity awards	405,550	—		50,594		16,958			13,432		—			—			—			30,390			—			30,390
Issuance of common stock under ATM Program	162,530	—		—		—			101,791		—			—			—			101,791			—			101,791
Dividend distribution on common stock, $2.66 per share	—	—		—		—			—		(227,387		)	—			—			(227,387		)	—			(227,387		)
Settlement of accrued dividends on vested equity awards	—	—		—		—			109		(403		)	—			—			(294		)	—			(294		)
Accrued dividends on unvested equity awards	—	—		—		—			—		(3,268		)	—			—			(3,268		)	—			(3,268		)
Stock-based compensation, net of estimated forfeitures	—	—		—		—			81,690		—			—			—			81,690			—			81,690
Balance as of March 31, 2020	86,269,033	$	86	(341,973	)	$	(127,298	)	$	12,893,455	$	(4,399,527	)	$	(1,206,669	)	$	1,509,317		$	8,669,364		$	(70	)	$	8,669,294



									Additional Paid-in Capital		Accumulated Dividends			AOCI (Loss)			Retained Earnings			Equinix Stockholders' Equity			Non-controlling interests			Total Stockholders' Equity
	Common Stock			Treasury Stock
	Shares	Amount		Shares		Amount
Balance as of December 31, 2018	81,119,117	$	81	(396,859	)	$	(145,161	)	$	10,751,313	$	(3,331,200	)	$	(945,702	)	$	889,948		$	7,219,279		$	—		$	7,219,279
Adjustment from adoption of new accounting standard update	—	—		—		—			—		—			—			(5,973		)	(5,973		)	—			(5,973		)
Net income (loss)	—	—		—		—			—		—			—			118,078			118,078			(331		)	117,747
Other comprehensive income	—	—		—		—			—		—			3,337			—			3,337			7			3,344
Issuance of common stock and release of treasury stock for employee equity awards	360,464	—		1,706		360			27,233		—			—			—			27,593			—			27,593
Issuance of common stock for equity offering	2,985,575	3		—		—			1,213,431		—			—			—			1,213,434			—			1,213,434
Dividend distribution on common stock, $2.46 per share	—	—		—		—			—		(198,933		)	—			—			(198,933		)	—			(198,933		)
Settlement of accrued dividends on vested equity awards	—	—		—		—			284		(387		)	—			—			(103		)	—			(103		)
Accrued dividends on unvested equity awards	—	—		—		—			—		(2,395		)	—			—			(2,395		)	—			(2,395		)
Stock-based compensation, net of estimated forfeitures	—	—		—		—			50,795		—			—			—			50,795			—			50,795
Balance as of March 31, 2019	84,465,156	$	84	(395,153	)	$	(144,801	)	$	12,043,056	$	(3,532,915	)	$	(942,365	)	$	1,002,053		$	8,425,112		$	(324	)	$	8,424,788

Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss, net of tax, by components are as follows (in thousands):



	Balance as of December 31, 2019			Net Change			Balance as of March 31, 2020
Foreign currency translation adjustment ("CTA") loss	$	(1,056,918	)	$	(413,781	)	$	(1,470,699	)
Unrealized gain on cash flow hedges ⁽¹⁾	15,638			(3,256		)	12,382
Net investment hedge CTA gain ⁽¹⁾	107,619			144,946			252,565
Net actuarial loss on defined benefit plans ⁽²⁾	(952		)	35			(917		)
Accumulated other comprehensive loss attributable to Equinix	$	(934,613	)	$	(272,056	)	$	(1,206,669	)


⁽¹⁾	Refer to Note 6 for a discussion of the amounts reclassified from accumulated other comprehensive loss to net income.

⁽²⁾

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.

Changes in foreign currencies can have a significant impact to the Company's consolidated balance sheets (as evidenced above in the Company's foreign currency translation loss), as well as its consolidated results of operations, as amounts in foreign currencies are generally translated into more U.S. Dollars when the U.S. Dollar weakens or fewer U.S. Dollars when the U.S. Dollar strengthens. As of March 31, 2020, the U.S. Dollar was generally stronger relative to certain of the currencies of the foreign countries in which the Company operates as compared to December 31, 2019. This overall strengthening of the U.S. Dollar had an overall unfavorable impact on the Company's condensed consolidated financial position because the foreign denominations translated into fewer U.S. Dollars as evidenced by an increase in foreign currency translation loss for the three months ended March 31, 2020 as reflected in the above table. 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 2019, the Company issued and sold 2,985,575 shares of common stock in a public offering pursuant to a registration statement and a related prospectus and prospectus supplement. The Company received net proceeds of approximately $1,213.4 million, net of underwriting discounts, commissions and offering expenses.

In December 2018, the Company launched an ATM program, under which it 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"). For the three months ended March 31, 2020, the Company sold 162,530 shares under the ATM Program, for approximately $101.8 million, net of payment of commissions to sales agents and other offering expenses. During the quarter ended March 31, 2019, no sales were made under the ATM Program.

Stock-Based Compensation

For the three months ended March 31, 2020, the Compensation Committee and/or the Stock Award Committee of the Company's Board of Directors, as the case may be, approved the issuance of an aggregate of 653,281 shares of restricted stock units to certain employees, including executive officers, pursuant to the 2000 Equity Incentive Plan. These equity awards are subject to vesting provisions and have a weighted-average grant date fair value of $579.24 and a weighted-average requisite service period of 3.31 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") per share as the performance measurements in the restricted stock units with both service and performance conditions that were granted in the three months ended March 31, 2020.

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. The Company used total shareholder return ("TSR") as the performance measurement in the restricted stock units with a service and market condition that were granted in the three months ended March 31, 2020. 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 2020 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 statements of operations (in thousands):



	Three Months Ended March 31,
	2020		2019
Cost of revenues	$	9,343	$	5,012
Sales and marketing	18,545		13,301
General and administrative	52,678		30,710
Total	$	80,566	$	49,023