Balance Sheet Components | 6 Months Ended |
Jun. 30, 2014 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' |
Balance Sheet Components | ' |
4. Balance Sheet Components |
Cash, Cash Equivalents and Short-Term and Long-Term Investments |
Cash, cash equivalents and short-term and long-term investments consisted of the following as of (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
Cash and cash equivalents: | | | | | | | | | | | | | | | | |
Cash (1) | | $ | 361,379 | | | $ | 186,007 | | | | | | | | | |
Cash equivalents: | | | | | | | | | | | | | | | | |
Money market funds | | | 28,939 | | | | 74,787 | | | | | | | | | |
U.S. government agency securities | | | 18,016 | | | | — | | | | | | | | | |
Commercial paper | | | — | | | | 1,100 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total cash and cash equivalents | | | 408,334 | | | | 261,894 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
U.S. government securities | | | 238,902 | | | | 305,021 | | | | | | | | | |
U.S. government agency securities | | | 27,786 | | | | 125,917 | | | | | | | | | |
Corporate bonds | | | 6,650 | | | | 190,177 | | | | | | | | | |
Certificates of deposit | | | 1,629 | | | | 76,152 | | | | | | | | | |
Asset-backed securities | | | 5,829 | | | | 68,938 | | | | | | | | | |
Commercial paper | | | 15,219 | | | | 1,993 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total marketable securities | | | 296,015 | | | | 768,198 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total cash, cash equivalents and short-term and long-term investments | | $ | 704,349 | | | $ | 1,030,092 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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-1 | Excludes restricted cash. | | | | | | | | | | | | | | | |
As of June 30, 2014 and December 31, 2013, cash equivalents included investments which were readily convertible to cash and had original maturity dates of 90 days or less. The maturities of securities classified as short-term investments were one year or less as of June 30, 2014 and December 31, 2013. The maturities of securities classified as long-term investments were greater than one year and less than three years as of June 30, 2014 and December 31, 2013. |
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The following table summarizes the cost and estimated fair value of marketable securities based on their stated effective maturities as of (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, 2014 | | | December 31, 2013 | |
| | Amortized | | | Fair Value | | | Amortized | | | Fair Value | |
Cost | Cost |
Due within one year | | $ | 207,209 | | | $ | 207,325 | | | $ | 369,698 | | | $ | 369,808 | |
Due after one year through three years | | | 88,582 | | | | 88,690 | | | | 398,200 | | | | 398,390 | |
| | | | | | | | | | | | | | | | |
| | $ | 295,791 | | | $ | 296,015 | | | $ | 767,898 | | | $ | 768,198 | |
| | | | | | | | | | | | | | | | |
The following table summarizes the fair value and gross unrealized gains and losses related to the Company’s short-term and long-term investments in marketable securities designated as available-for-sale securities as of (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, 2014 | |
| | Amortized | | | Gross | | | Gross | | | Fair Value | |
Cost | unrealized | unrealized |
| gains | losses |
U.S. government securities | | $ | 238,701 | | | $ | 201 | | | $ | — | | | $ | 238,902 | |
U.S. government agency securities | | | 27,767 | | | | 19 | | | | — | | | | 27,786 | |
Corporate bonds | | | 6,647 | | | | 3 | | | | — | | | | 6,650 | |
Certificates of deposit | | | 1,629 | | | | — | | | | — | | | | 1,629 | |
Asset-backed securities | | | 5,828 | | | | 1 | | | | — | | | | 5,829 | |
Commercial paper | | | 15,219 | | | | — | | | | — | | | | 15,219 | |
| | | | | | | | | | | | | | | | |
| | $ | 295,791 | | | $ | 224 | | | $ | — | | | $ | 296,015 | |
| | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | |
| | December 31, 2013 | |
| | Amortized | | | Gross | | | Gross | | | Fair Value | |
Cost | unrealized | unrealized |
| gains | losses |
U.S. government securities | | $ | 304,897 | | | $ | 131 | | | $ | (7 | ) | | $ | 305,021 | |
U.S. government agency securities | | | 125,904 | | | | 35 | | | | (22 | ) | | | 125,917 | |
Corporate bonds | | | 190,068 | | | | 149 | | | | (40 | ) | | | 190,177 | |
Certificates of deposit | | | 76,126 | | | | 27 | | | | (1 | ) | | | 76,152 | |
Asset-backed securities | | | 68,914 | | | | 33 | | | | (9 | ) | | | 68,938 | |
Commercial paper | | | 1,989 | | | | 4 | | | | — | | | | 1,993 | |
| | | | | | | | | | | | | | | | |
| | $ | 767,898 | | | $ | 379 | | | $ | (79 | ) | | $ | 768,198 | |
| | | | | | | | | | | | | | | | |
As of June 30, 2014, the Company did not have any securities in a loss position. If market conditions were to deteriorate, the Company could sustain other-than-temporary impairments to its investment portfolio which could result in additional realized losses being recorded in interest income, net, or securities markets could become inactive which could affect the liquidity of the Company’s investments. |
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Accounts Receivable |
Accounts receivables, net, consisted of the following as of (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
Accounts receivable | | $ | 382,610 | | | $ | 323,822 | | | | | | | | | |
Unearned revenue | | | (136,894 | ) | | | (132,342 | ) | | | | | | | | |
Allowance for doubtful accounts | | | (7,885 | ) | | | (6,640 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 237,831 | | | $ | 184,840 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Trade accounts receivable are recorded at the invoiced amount and generally do not bear interest. The Company generally invoices its customers at the end of a calendar month for services to be provided the following month. Accordingly, unearned revenue consists of pre-billing for services that have not yet been provided, but which have been billed to customers in advance in accordance with the terms of their contracts. |
Other Current Assets |
Other current assets consisted of the following as of (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
Prepaid expenses | | $ | 31,322 | | | $ | 26,578 | | | | | | | | | |
Taxes receivable | | | 46,306 | | | | 21,584 | | | | | | | | | |
Deferred tax assets, net | | | 7,442 | | | | 7,442 | | | | | | | | | |
Other receivables | | | 2,575 | | | | 4,181 | | | | | | | | | |
Derivative instruments | | | 8,262 | | | | 4,457 | | | | | | | | | |
Restricted cash, current | | | 3,287 | | | | 3,210 | | | | | | | | | |
Other current assets | | | 1,850 | | | | 4,666 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 101,044 | | | $ | 72,118 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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Property, Plant and Equipment |
Property, plant and equipment consisted of the following as of (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
IBX plant and machinery | | $ | 2,759,055 | | | $ | 2,640,907 | | | | | | | | | |
Leasehold improvements | | | 1,069,296 | | | | 1,039,847 | | | | | | | | | |
Buildings (1) | | | 2,033,680 | | | | 1,862,562 | | | | | | | | | |
IBX equipment | | | 545,549 | | | | 490,677 | | | | | | | | | |
Computer equipment and software | | | 226,869 | | | | 193,524 | | | | | | | | | |
Land | | | 122,040 | | | | 122,035 | | | | | | | | | |
Furniture and fixtures | | | 25,260 | | | | 24,134 | | | | | | | | | |
Construction in progress | | | 387,659 | | | | 244,254 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 7,169,408 | | | | 6,617,940 | | | | | | | | | |
Less accumulated depreciation | | | (2,245,246 | ) | | | (2,026,290 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 4,924,162 | | | $ | 4,591,650 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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-1 | Includes site improvements. | | | | | | | | | | | | | | | |
International Business Exchange® (“IBX”) plant and machinery, leasehold improvements, buildings, computer equipment and software and construction in progress recorded under capital leases aggregated $539,421,000 and $428,974,000 as of June 30, 2014 and December 31, 2013, respectively. Depreciation on the assets recorded under capital leases is included in depreciation expense and accumulated depreciation on such assets totaled $67,687,000 and $56,041,000 as of June 30, 2014 and December 31, 2013, respectively. |
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Goodwill and Intangible Assets |
Goodwill and intangible assets, net, consisted of the following as of (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
Goodwill: | | | | | | | | | | | | | | | | |
Americas | | $ | 476,789 | | | $ | 471,845 | | | | | | | | | |
EMEA | | | 446,007 | | | | 435,041 | | | | | | | | | |
Asia-Pacific | | | 135,567 | | | | 135,267 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 1,058,363 | | | $ | 1,042,153 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
Intangible assets: | | | | | | | | | | | | | | | | |
Intangible asset – customer contracts | | $ | 234,903 | | | $ | 233,038 | | | | | | | | | |
Intangible assets – favorable leases | | | 24,885 | | | | 25,147 | | | | | | | | | |
Intangible asset – licenses | | | 9,697 | | | | 9,697 | | | | | | | | | |
Intangible asset – others | | | 8,934 | | | | 8,859 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 278,419 | | | | 276,741 | | | | | | | | | |
Less accumulated amortization | | | (108,289 | ) | | | (92,559 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 170,130 | | | $ | 184,182 | | | | | | | | | |
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The Company’s goodwill and intangible assets in EMEA (Europe, Middle East and Africa), denominated in the United Arab Emirates dirham, British pounds and Euros, goodwill and intangible assets in Asia-Pacific, denominated in Chinese yuan, Hong Kong dollars and Singapore dollars and certain goodwill and intangible assets in Americas, denominated in Canadian dollars and Brazilian reais, are subject to foreign currency fluctuations. The Company’s foreign currency translation gains and losses, including goodwill and intangible assets, are a component of other comprehensive income and loss. |
For the three and six months ended June 30, 2014, the Company recorded amortization expense of $7,074,000 and $13,979,000, respectively, associated with its intangible assets. For the three and six months ended June 30, 2013, the Company recorded amortization expense of $6,864,000 and $13,623,000, respectively, associated with its intangible assets. The Company’s estimated future amortization expense related to these intangibles is as follows (in thousands): |
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Year ending: | | | | | | | | | | | | | | | | |
2014 (6 months remaining) | | $ | 14,828 | | | | | | | | | | | | | |
2015 | | | 29,312 | | | | | | | | | | | | | |
2016 | | | 28,831 | | | | | | | | | | | | | |
2017 | | | 27,255 | | | | | | | | | | | | | |
2018 | | | 24,120 | | | | | | | | | | | | | |
Thereafter | | | 45,784 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 170,130 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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Other Assets |
Other assets consisted of the following (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
Deferred tax assets, net | | $ | 299,739 | | | $ | 229,975 | | | | | | | | | |
Prepaid expenses, non-current | | | 49,799 | | | | 61,039 | | | | | | | | | |
Debt issuance costs, net | | | 35,982 | | | | 41,847 | | | | | | | | | |
Deposits | | | 32,445 | | | | 25,543 | | | | | | | | | |
Restricted cash, non-current | | | 15,644 | | | | 16,178 | | | | | | | | | |
Derivative instruments | | | 3,224 | | | | 4,118 | | | | | | | | | |
Other assets, non-current | | | 6,899 | | | | 8,624 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 443,732 | | | $ | 387,324 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
The increase in deferred tax assets, net was primarily due to the depreciation and amortization recapture as a result of changing the Company’s methods of depreciating and amortizing various data center assets for tax purposes in connection with the Company’s plan to convert to a real estate investment trust (“REIT”). |
Accounts Payable and Accrued Expenses |
Accounts payable and accrued expenses consisted of the following (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
Accounts payable | | $ | 21,019 | | | $ | 30,291 | | | | | | | | | |
Accrued compensation and benefits | | | 86,887 | | | | 92,106 | | | | | | | | | |
Accrued interest | | | 46,696 | | | | 48,310 | | | | | | | | | |
Accrued taxes | | | 39,607 | | | | 32,047 | | | | | | | | | |
Accrued utilities and security | | | 34,010 | | | | 31,314 | | | | | | | | | |
Accrued professional fees | | | 8,484 | | | | 9,753 | | | | | | | | | |
Accrued repairs and maintenance | | | 5,039 | | | | 3,557 | | | | | | | | | |
Accrued other | | | 18,379 | | | | 15,845 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 260,121 | | | $ | 263,223 | | | | | | | | | |
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Other Current Liabilities |
Other current liabilities consisted of the following (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
Deferred tax liabilities, net | | $ | 72,004 | | | $ | 72,004 | | | | | | | | | |
Deferred installation revenue | | | 41,644 | | | | 43,145 | | | | | | | | | |
Customer deposits | | | 15,485 | | | | 15,174 | | | | | | | | | |
Derivative instruments | | | 5,563 | | | | 6,515 | | | | | | | | | |
Deferred recurring revenue | | | 6,033 | | | | 5,007 | | | | | | | | | |
Deferred rent | | | 2,746 | | | | 3,865 | | | | | | | | | |
Asset retirement obligations | | | 1,226 | | | | 1,290 | | | | | | | | | |
Other current liabilities | | | 1,850 | | | | 958 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 146,551 | | | $ | 147,958 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Other Liabilities |
Other liabilities consisted of the following (in thousands): |
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| | | | | | | | | | | | | | | | |
| | June 30, | | | December 31, | | | | | | | | | |
2014 | 2013 | | | | | | | | |
Asset retirement obligations, non-current | | $ | 60,962 | | | $ | 58,258 | | | | | | | | | |
Deferred tax liabilities, net | | | 70,111 | | | | 69,812 | | | | | | | | | |
Deferred installation revenue, non-current | | | 74,966 | | | | 60,947 | | | | | | | | | |
Deferred rent, non-current | | | 44,576 | | | | 37,955 | | | | | | | | | |
Accrued taxes, non-current | | | 25,980 | | | | 27,052 | | | | | | | | | |
Customer deposits, non-current | | | 4,998 | | | | 5,005 | | | | | | | | | |
Deferred recurring revenue, non-current | | | 1,948 | | | | 2,082 | | | | | | | | | |
Other liabilities | | | 19,212 | | | | 13,844 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 302,753 | | | $ | 274,955 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
The Company currently leases the majority of its IBX data centers and certain equipment under non-cancelable operating lease agreements expiring through 2043. The IBX data center lease agreements typically provide for base rental rates that increase at defined intervals during the term of the lease. In addition, the Company has negotiated some rent expense abatement periods for certain leases to better match the phased build-out of its IBX data centers. The Company accounts for such abatements and increasing base rentals using the straight-line method over the life of the lease. The difference between the straight-line expense and the cash payment is recorded as deferred rent. |