Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 03, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | EQUINIX INC | |
Entity Central Index Key | 1,101,239 | |
Current Fiscal Year End Date | --12-31 | |
Trading Symbol | EQIX | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 71,379,297 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 987,915 | $ 2,228,838 |
Short-term investments | 443 | 12,875 |
Accounts receivable, net | 377,528 | 291,964 |
Current portion of restricted cash | 25,305 | 479,417 |
Other current assets | 172,370 | 212,929 |
Assets held for sale | 96,923 | 33,257 |
Total current assets | 1,660,484 | 3,259,280 |
Long-term investments | 15,036 | 4,584 |
Property, plant and equipment, net | 7,251,399 | 5,606,436 |
Goodwill | 3,118,686 | 1,063,200 |
Intangible assets, net | 803,260 | 224,565 |
Other assets | 248,692 | 198,630 |
Total assets | 13,097,557 | 10,356,695 |
Current liabilities: | ||
Accounts payable and accrued expenses | 534,602 | 400,948 |
Accrued property, plant and equipment | 185,683 | 103,107 |
Current portion of capital lease and other financing obligations | 92,120 | 40,121 |
Current portion of mortgage and loans payable | 518,985 | 770,236 |
Convertible debt | 0 | 146,121 |
Other current liabilities | 149,516 | 192,286 |
Liabilities held for sale | 14,660 | 3,535 |
Total current liabilities | 1,495,566 | 1,656,354 |
Capital lease and other financing obligations, less current portion | 1,446,455 | 1,287,139 |
Mortgage and loans payable, less current portion | 1,058,418 | 472,769 |
Senior notes | 3,809,332 | 3,804,634 |
Other liabilities | 664,076 | 390,413 |
Total liabilities | 8,473,847 | 7,611,309 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
Common stock | 72 | 62 |
Additional paid-in capital | 7,371,024 | 4,838,444 |
Treasury stock | (147,617) | (7,373) |
Accumulated dividends | (1,842,834) | (1,468,472) |
Accumulated other comprehensive loss | (713,769) | (509,059) |
Accumulated deficit | (43,166) | (108,216) |
Total stockholders’ equity | 4,623,710 | 2,745,386 |
Total liabilities and stockholders’ equity | $ 13,097,557 | $ 10,356,695 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 924,676 | $ 686,649 | $ 2,669,342 | $ 1,995,405 |
Costs and operating expenses: | ||||
Cost of revenues | 470,302 | 325,468 | 1,354,949 | 939,538 |
Sales and marketing | 110,936 | 83,709 | 325,358 | 243,573 |
General and administrative | 181,239 | 123,237 | 515,605 | 356,455 |
Acquisition costs | 12,505 | 13,352 | 64,635 | 24,374 |
Impairment charges | 7,698 | 0 | 7,698 | 0 |
Gains on asset sales | (27,945) | 0 | (33,187) | 0 |
Total costs and operating expenses | 754,735 | 545,766 | 2,235,058 | 1,563,940 |
Income from continuing operations | 169,941 | 140,883 | 434,284 | 431,465 |
Interest income | 762 | 934 | 2,528 | 2,375 |
Interest expense | (92,200) | (76,269) | (293,395) | (219,556) |
Other income (expense) | 2,938 | (12,836) | (56,217) | (11,964) |
Loss on debt extinguishment | (9,894) | 0 | (10,499) | 0 |
Income from continuing operations before income taxes | 71,547 | 52,712 | 76,701 | 202,320 |
Income tax expense | (22,778) | (11,580) | (25,957) | (25,277) |
Net income from continuing operations | 48,769 | 41,132 | 50,744 | 177,043 |
Net income from discontinued operations, net of tax | 2,681 | 0 | 14,306 | 0 |
Net income | $ 51,450 | $ 41,132 | $ 65,050 | $ 177,043 |
Earnings per share (“EPS”): | ||||
Basic EPS from continuing operations (in dollars per share) | $ 0.69 | $ 0.72 | $ 0.73 | $ 3.11 |
Basic EPS from discontinued operations (in dollars per share) | 0.04 | 0 | 0.21 | 0 |
Basic EPS (in dollars per share) | $ 0.73 | $ 0.72 | $ 0.94 | $ 3.11 |
Weighted-average shares | 71,190 | 57,082 | 69,689 | 56,894 |
Diluted EPS from continuing operations (in dollars per share) | $ 0.68 | $ 0.71 | $ 0.72 | $ 3.08 |
Diluted EPS from discontinued operations (in dollars per share) | 0.04 | 0 | 0.20 | 0 |
Diluted EPS (in dollars per share) | $ 0.72 | $ 0.71 | $ 0.92 | $ 3.08 |
Weighted-average shares for diluted EPS | 71,908 | 57,708 | 70,389 | 57,521 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 51,450 | $ 41,132 | $ 65,050 | $ 177,043 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment (“CTA”) loss | (32,603) | (72,677) | (215,065) | (149,546) |
Unrealized gain (loss) on available-for-sale securities | 1,487 | (21) | 2,382 | 99 |
Unrealized gain (loss) on cash flow hedges | (4,153) | 3,309 | 3,789 | (425) |
Net investment hedge CTA gain (loss) | (34,721) | 4,426 | 4,163 | (5,963) |
Net actuarial gain on defined benefit plans | 7 | 124 | 21 | 266 |
Total other comprehensive loss, net of tax | (69,983) | (64,839) | (204,710) | (155,569) |
Comprehensive income (loss), net of tax | $ (18,533) | $ (23,707) | $ (139,660) | $ 21,474 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 65,050 | $ 177,043 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 534,026 | 362,069 |
Stock-based compensation | 115,730 | 98,575 |
Amortization of intangible assets | 93,384 | 19,346 |
Amortization of debt issuance costs and debt discounts | 13,709 | 11,557 |
Provision for allowance for doubtful accounts | 6,541 | 4,187 |
Gains on asset sales | (33,187) | 0 |
Gains on sale of discontinued operations | 4,242 | 0 |
Impairment charges | 7,698 | 0 |
Loss on debt extinguishment | (10,499) | 0 |
Other items | 13,378 | 11,162 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (72,807) | (42,002) |
Income taxes, net | 1,021 | (84,523) |
Accounts payable and accrued expenses | (11,526) | 75,219 |
Other assets and liabilities | (22,004) | 27,042 |
Net cash provided by operating activities | 717,270 | 659,675 |
Cash flows from investing activities: | ||
Purchases of investments | (31,736) | (338,440) |
Sales of investments | 41,796 | 826,486 |
Maturities of investments | 0 | 35,431 |
Business acquisitions, net of cash acquired | (1,767,528) | (10,247) |
Purchases of real estate | (28,118) | (38,282) |
Purchases of other property, plant and equipment | (727,044) | (587,508) |
Proceeds from sale of assets, net of cash transferred | 828,197 | 0 |
Changes in restricted cash | 444,736 | (493,371) |
Net cash used in investing activities | (1,239,697) | (605,931) |
Cash flows from financing activities: | ||
Proceeds from employee equity awards | 34,143 | 29,855 |
Payment of dividends | (374,151) | (291,009) |
Proceeds from loans payable | 710,404 | 490,000 |
Repayment of capital lease and other financing obligations | (100,863) | (20,213) |
Repayment of mortgage and loans payable | (986,465) | (529,447) |
Debt extinguishment costs | (10,181) | 0 |
Debt issuance costs | 11,751 | 617 |
Excess tax benefits from stock-based compensation | 1,465 | 1,663 |
Net cash used in financing activities | (737,399) | (319,768) |
Effect of foreign currency exchange rates on cash and cash equivalents | 22,658 | (9,424) |
Change in cash balances included in assets held for sale | (3,755) | 0 |
Net decrease in cash and cash equivalents | (1,240,923) | (275,448) |
Cash and cash equivalents at beginning of period | 2,228,838 | 610,917 |
Cash and cash equivalents at end of period | $ 987,915 | $ 335,469 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
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, 2015 has been derived from audited consolidated financial statements as of that date. The 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 (“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 26, 2016. 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 the Paris IBX Data Center from August 1, 2016, Telecity Group plc (“TelecityGroup”) from January 15, 2016, Bit-isle Inc. (“Bit-isle”) from November 2, 2015 and Nimbo Technologies Inc. (“Nimbo”) from January 14, 2015. All significant intercompany accounts and transactions have been eliminated in consolidation. Income Taxes The Company began operating as a real estate investment trust for federal income tax purposes ("REIT") effective January 1, 2015. In May 2015, the Company received a favorable private letter ruling from the U.S. Internal Revenue Service in connection with the Company’s conversion to a REIT for federal income tax purposes. As a result, the Company may deduct the distributions made to its stockholders from taxable income generated by the Company and its qualified REIT subsidiaries (“QRSs”). The Company’s dividends paid deduction generally eliminates the taxable income of the Company and its QRSs, resulting in no U.S. income tax due. However, the Company's taxable REIT subsidiaries (“TRSs”) have been and 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 a 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. The Company’s effective tax rates were 33.8% and 12.5% for the nine months ended September 30, 2016 and 2015 , respectively. The increase in the effective tax rate for the nine months in 2016 as compared to the same period in 2015 is primarily due to a much lower profit before tax for the period, attributable to the non-tax deductible costs related to the TelecityGroup acquisition and an increase in valuation allowance. 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. Recent Accounting Pronouncements Accounting Standards Not Yet Adopted I n October, 2016, Financial Accounting Standards Board ("FASB") has issued Accounting Standards Update ("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 public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, 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 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 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 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 is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. 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 fiscal years beginning after December 15, 2016, and interim periods within those annual periods, 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 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 should 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 is currently evaluating the impact that the adoption of this standard will have on its 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 is currently evaluating the impact that the adoption of this standard 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 public companies 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 operating 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 public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. 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 2015-04, ASU 2016-08, ASU 2016-10 and ASU 2016-12, respectively (ASU 2014-09, ASU 2015-04, ASU 2016-08, ASU 2016-10, ASU 2016-11 and ASU 2016-12 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, 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 for public entities is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. Accounting Standards Adopted In September 2015, the FASB issued ASU 2015-16, Business Combinations ("ASU 2015-16"), to simplify accounting for adjustments made to provisional amounts recognized in a business combination by eliminating the requirement to retrospectively account for those adjustments. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The amendments in this ASU require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects as a result of changes to provisional amounts, calculated as if the accounting had been completed at the acquisition date. The Company adopted ASU 2015-16 in the three months ended March 31, 2016. The adoption of ASU 2015-16 did not have a significant impact on the Company's consolidated financial statements. In May 2015, the FASB issued ASU 2015-07, Fair Value Measurement (“ASU 2015-07”), which permits a reporting entity, as a practical expedient, to measure the fair value of certain investments using the net asset value per share of the investment. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years with early adoption permitted. A reporting entity should apply the amendment retrospectively to all periods presented. The retrospective approach requires that an investment for which fair value is measured using the net asset value per share practical expedient be removed from the fair value hierarchy in all periods presented in an entity’s financial statements. The Company adopted ASU 2015-07 in the three months ended March 31, 2016. The adoption of ASU 2015-07 did not have a significant impact on the Company's consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidations (“ASU 2015-02”). This ASU requires companies to adopt a new consolidation model, specifically: (1) the ASU modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (2) the ASU eliminates the presumption that a general partner should consolidate a limited partnership; (3) the ASU affects the consolidation analysis of reporting entities involved with VIEs and (4) the ASU provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company adopted ASU 2015-02 in the three months ended March 31, 2016. The adoption of ASU 2015-02 did not have a significant impact on the Company's consolidated financial statements. In January 2015, the FASB issued ASU 2015-01, Income Statement – Extraordinary and Unusual Items (“ASU 2015-01”), to simplify the income statement presentation requirements by eliminating the concept of extraordinary items. ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company adopted ASU 2015-01 in the three months ended March 31, 2016. The adoption of ASU 2015-01 did not have a significant impact on the Company's consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
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): Three months ended Nine months ended 2016 2015 2016 2015 Net income: Net income from continuing operations $ 48,769 $ 41,132 $ 50,744 $ 177,043 Net income from discontinued operations 2,681 — 14,306 — Net income $ 51,450 $ 41,132 $ 65,050 $ 177,043 Weighted-average shares used to calculate basic EPS 71,190 57,082 69,689 56,894 Effect of dilutive securities: Employee equity awards 718 626 700 627 Weighted-average shares used to calculate diluted EPS 71,908 57,708 70,389 57,521 Basic EPS: Continuing operations $ 0.69 $ 0.72 $ 0.73 $ 3.11 Discontinued operations 0.04 — 0.21 — Basic EPS $ 0.73 $ 0.72 $ 0.94 $ 3.11 Diluted EPS: Continuing operations $ 0.68 $ 0.71 $ 0.72 $ 3.08 Discontinued operations 0.04 — 0.20 — Diluted EPS $ 0.72 $ 0.71 $ 0.92 $ 3.08 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): Three months ended Nine months ended 2016 2015 2016 2015 Shares reserved for conversion of 4.75% convertible subordinated notes — 1,970 1,193 1,956 Common stock related to employee equity awards 22 201 17 117 22 2,171 1,210 2,073 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Paris IBX Data Center Acquisition On August 1, 2016, the Company completed the purchase of Digital Realty Trust, Inc.'s ("Digital Realty") operating business, including its real estate and facility, located in St. Denis, Paris for cash consideration of approximately €193,292,000 or $215,869,000 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 €46,726,000 or approximately $52,219,000 and recognized a loss on debt extinguishment of €8,828,000 or approximately $9,894,000 . The remainder of the building was leased to other tenants, which became the Company's tenants upon closing. 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 and the estimated fair value of assets acquired and liabilities assumed in its consolidated balance sheets beginning August 1, 2016. The Company incurred acquisition costs of approximately $10,962,000 during the three and nine months ended September 30, 2016 related to the Paris IBX Data Center 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 the date of this quarterly report, 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, intangible assets and leasehold interests. Therefore, the allocation of the purchase price to acquired assets and liabilities is based on provisional estimates and is subject to continuing management analysis, with assistance of third party valuation advisers. The preliminary purchase price allocation, which excludes settlement of the Paris 3 financing obligations, was as follows (in thousands): Cash and cash equivalent $ 4,073 Accounts receivable 1,507 Other current assets 794 Property, plant, and equipment 138,568 Intangible assets 11,758 Goodwill 45,187 Other assets 82 Total assets acquired 201,969 Accounts payable and accrued liabilities (2,044 ) Other current liabilities (2,798 ) Deferred tax liabilities (32,687 ) Other liabilities (790 ) Net assets acquired $ 163,650 The following table presents certain information on the acquired identifiable intangible assets (dollars in thousands): 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 The fair value of in-place lease value 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 value associated with lost revenue related to tenant reimbursable operating costs estimated to be incurred during the assumed re-leasing period (i.e. real estate taxes, insurance and other operating expenses), the value associated with lost rental revenue from existing leases during the assumed re-leasing period; the value associated with avoided tenant improvement and leasing commission costs or other inducements to secure a tenant lease and the avoided costs for rent abatements or rent free periods. The fair value of favorable leases was estimated based on the income approach. The favorable leasehold interests were determined on a lease-by-lease basis 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 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. 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 that the asset could be replaced or reproduced. The key assumptions of the cost approach include replacement cost, physical deterioration, functional and economic obsolescence, economic useful life, remaining useful life, age and effective age. The incremental results of operations from Paris IBX Data Center Acquisition are not significant; therefore the Company does not present pro forma combined results of operations. For the three months ended September 30, 2016, the incremental revenues and net income recorded from the Paris IBX Data Center Acquisition were not significant to the Company’s consolidated statement 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 enhances 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 has become a wholly-owned subsidiary of Equinix. Under the terms of the acquisition, the Company acquired all outstanding shares of TelecityGroup 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 £2,624,500,000 or approximately $3,743,587,000 . In addition, the Company assumed $1,299,000 of vested TelecityGroup's employee equity awards as part of consideration transferred. The Company incurred acquisition costs of approximately $50,484,000 during the nine months ended September 30, 2016 related to the TelecityGroup acquisition. In connection with the TelecityGroup acquisition, the Company placed £322,851,000 or approximately $475,689,000 into a restricted cash account, which was included in the current portion of restricted cash in the condensed consolidated balance sheet as of December 31, 2015. 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. as the initial lender and as administrative agent for the lenders for a principal amount of £875,000,000 or approximately $1,289,000,000 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. The Company initially designated the legal entities acquired in the TelecityGroup acquisition as TRSs. As of September 30, 2016, the Company has integrated TelecityGroup Netherlands into the REIT structure through its merger with Equinix Netherlands. 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. As of the date of this quarterly report, the Company has not completed the detailed valuation analysis to derive the fair value of the following items including, but not limited to, intangible assets, accounting for lease contracts; asset retirement obligations; favorable leasehold interests; assets and liabilities held for sale, deferred revenue; property, plant and equipment; accruals and taxes. Therefore, the allocation of the purchase price to acquired assets and liabilities is based on provisional estimates and is subject to continuing management analysis, with assistance of third party valuation advisers. During the three months ended September 30, 2016, the Company updated the preliminary allocation of purchase price for TelecityGroup based on valuation analysis, which resulted in increases to intangible assets of $46,529,000 and capital lease and other financing obligations $37,449,000 and decreases in goodwill of $21,906,000 , assets held for sale of $46,598,000 and deferred tax liabilities of $21,048,000 . The changes did not have a significant impact on the Company’s results from operations for the three and nine months ended September 30, 2016. The Company may adjust these amounts further as valuations are finalized and the Company obtains information necessary to complete the analyses, but no later than one year from the acquisition date. As of the acquisition date, the preliminary allocation of the purchase price is as follows (in thousands): Cash and cash equivalents $ 73,368 Accounts receivable 24,042 Other current assets 41,079 Assets held for sale 867,917 Property, plant and equipment 1,058,583 Goodwill 2,216,173 Intangible assets 704,014 Deferred tax assets 1,198 Other assets 4,124 Total assets acquired 4,990,498 Accounts payable and accrued expenses (90,589 ) Accrued property, plant and equipment (3,634 ) Other current liabilities (27,259 ) Liabilities held for sale (156,171 ) Capital lease and other financing obligations (162,359 ) Mortgage and loans payable (592,304 ) Deferred tax liabilities (177,715 ) Other liabilities (35,581 ) Net assets acquired $ 3,744,886 The preliminary 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): 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 40,025 2.0 - 25.4 19.2 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 it relates 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 other acquired identifiable intangible assets were 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, 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. 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 asset held for sale, is attributable to the Company’s EMEA region. For the three months ended September 30, 2016 , the Company's results of continuing operations include TelecityGroup revenues of $107,316,000 and net loss from continuing operations of $15,747,000 . The Company's results of continuing operations include TelecityGroup revenues of $299,001,000 and net loss from continuing operations of $54,426,000 for the period January 15, 2016 through September 30, 2016 . Bit-isle Acquisition On November 2, 2015, the Company completed a cash tender offer for approximately 97% of the equity instruments, including stock options, of Tokyo-based Bit-isle. The Company acquired the remaining outstanding equity instruments of Bit-isle in December 2015. The offer price was ¥922 per share, in an all cash transaction totaling approximately $275,367,000 . The Company acquired Bit-isle to expand additional data centers in Japan for customers' future expansion needs. On September 30, 2015, the Company entered into a term loan agreement (the “Bridge Term Loan Agreement”) with the Bank of Tokyo-Mitsubishi UFJ, Ltd. (“BTMU”). Pursuant to the Bridge Term Loan Agreement, BTMU committed to provide a senior bridge loan facility (the “Bridge Term Loan”) in the amount of up to ¥47,500,000,000 , or approximately $468,350,000 in U.S. dollars at the exchange rate in effect on September 30, 2016 . Proceeds from the Bridge Term Loan were to be used exclusively for the acquisition of Bit-isle, the repayment of Bit-isle’s existing debt and transaction costs incurred in connection with the closing of the Bridge Term Loan and the acquisition of Bit-isle. The Company included Bit-isle’s results of operations from November 2, 2015 and the estimated fair value of assets acquired and liabilities assumed in its consolidated balance sheets beginning November 2, 2015. The Company has designated the legal entities acquired in the Bit-isle acquisition as TRSs. Purchase Price Allocation Under the acquisition method of accounting, the total purchase price was allocated to Bit-isle’s net tangible and intangible assets based upon their fair value as of the Bit-isle acquisition date. Under the accounting guidance, the Company can adjust the fair value of acquired assets and liabilities assumed in the measurement period, as it obtains new information regarding the facts and circumstances that existed at the acquisition date. Based upon the purchase price and the valuation of Bit-isle, the purchase price allocation was as follows (in thousands): Cash and cash equivalents $ 33,198 Accounts receivable 7,359 Other current assets 51,038 Long-term investments 3,806 Property, plant and equipment 308,985 Goodwill 95,444 Intangible assets 111,374 Other assets 22,981 Total assets acquired 634,185 Accounts payable and accrued expenses (15,028 ) Accrued property, plant and equipment (465 ) Capital lease and other financing obligations (108,833 ) Mortgage and loans payable (190,227 ) Other current liabilities (8,689 ) Deferred tax liabilities (32,192 ) Other liabilities (3,384 ) Net assets acquired $ 275,367 The following table presents certain information on the acquired identifiable intangible assets (dollars in thousands): Intangible assets Fair value Estimated useful lives (years) Weighted-average estimated useful lives (years) Customer relationships $ 105,434 13 13 Trade name 3,455 2 2 Favorable solar contracts 2,410 18 18 Other intangible assets 75 0.25 0.25 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 11.0% , which reflected the nature of the assets as it relates 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 Bit-isle 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 12.0% . The other acquired identifiable intangible assets were estimated by applying an income 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 live. There are two primary methods of applying the income approach to determine the fair value 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 that 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 Bit-isle Acquisition by estimating Bit-isle’s debt rating and reviewed market data with a similar debt rating and other characteristics of the debt, including the maturity date and security type. During the year ended December 31, 2015, the Company prepaid and terminated the majority of 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 consolidated statement of operations for the year ended December 31, 2015. 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 Bit-isle acquisition is attributable to the Company’s Asia-Pacific region. For the three and nine months ended September 30, 2016 , the Company's results of continuing operations include Bit-isle revenues of $39,745,000 and $111,243,000 , respectively, and Bit-isle net losses of $9,714,000 and $16,091,000 , respectively. Nimbo Acquisition On January 14, 2015, the Company acquired all of the issued and outstanding share capital of Nimbo, a company which specializes in migrating business applications to the cloud with extensive experience moving legacy applications into a hybrid cloud architecture, and connecting legacy data centers to the cloud, for a cash payment of $10,000,000 and a contingent earn-out arrangement to be paid over two years (the “Nimbo Acquisition”). Subsequent to the acquisition, Nimbo adopted the name Equinix Professional Services for Cloud. The Nimbo Acquisition was accounted for using the acquisition method. As a result of the Nimbo Acquisition, the Company recorded goodwill of $17,192,000 , which represents the excess of the total purchase price over the fair value of the assets acquired and liabilities assumed. The Company recorded the contingent earn-out arrangement at its estimated fair value. The results of operations for Nimbo are not significant to the Company; therefore, the Company does not present its purchase price allocation or pro forma combined results of operations. In addition, any prospective changes in the Company’s earn-out estimates are not expected to have a material effect on the Company’s consolidated statement of operations. Unaudited Pro Forma Combined Consolidated Financial Information The following unaudited pro forma combined consolidated financial information has been prepared by the Company using the acquisition method of accounting to give effect to the TelecityGroup and Bit-isle acquisitions as though the acquisitions occurred on January 1, 2015. The Company completed the TelecityGroup acquisition on January 15, 2016. The operating results of TelecityGroup are included in the condensed consolidated statement of operations for the three months ended September 30, 2016 . TelecityGroup's operating results for the period January 15, 2016 through September 30, 2016 are included in the condensed consolidated statement of operations for the nine months ended September 30, 2016 . The pro forma effect for the period January 1 through January 14, 2016 was insignificant. The unaudited pro forma combined consolidated financial information reflects certain adjustments, such as additional depreciation, amortization and interest expense on assets and liabilities acquired. The unaudited pro forma combined consolidated 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 consolidated combined results of operations for the three and nine months ended September 30, 2015 (in thousands): Three months ended September 30, Nine months ended September 30, 2015 2015 Revenues $ 819,423 $ 2,387,117 Net income from continuing operations 61,243 153,488 Basic EPS 0.96 2.41 Diluted EPS 0.95 2.38 |
Assets Held for Sale
Assets Held for Sale | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [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 and reported the San Jose land parcel as an asset held for sale in the accompanying consolidated balance sheet as of December 31, 2015. The sale was completed in February 2016. 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 LD2 data center and certain data centers of TelecityGroup in the United Kingdom, Netherlands and Germany. The assets and liabilities of LD2, which were included within the EMEA operating segment, were classified as held for sale in the fourth quarter of 2015 and, therefore, the corresponding depreciation and amortization expense was ceased at that time. This divestiture was not presented as discontinued operations in the consolidated statements of operations, because it did not represent a strategic shift in the Company's business, as the Company continued operating similar businesses after the divestiture. The divestiture was completed on July 5, 2016 and the Company recognized a gain of $27,945,000 on the sale of the LD2 data center, which is included in gains on asset sales in the condensed consolidated statement of operations for the three and nine months ended September 30, 2016. The revenue and net income generated by LD2 during the three months ended September 30, 2016 were insignificant. During the three months ended September 30, 2015 , LD2 generated revenue of $4,654,000 and net income of $2,040,000 . During the nine months ended September 30, 2016 , LD2 generated revenue of $6,116,000 and net income of $2,327,000 . During the nine months ended September 30, 2015 , LD2 generated revenue of $14,082,000 and net income of $5,920,000 . The acquisition of TelecityGroup closed on January 15, 2016. Accordingly, the assets and liabilities of the TelecityGroup data centers that were divested were included in assets and liabilities held for sale in the condensed consolidated balance sheet through July 5, 2016, the date the divestiture closed. The results of operations for the TelecityGroup data centers that were divested, as well as the gain on divestiture, were classified as discontinued operations from January 15, 2016, the date the acquisition closed, through July 5, 2016 (see Note 5). In June 2016, the Company approved the divestiture of the solar power assets of Bit-isle. The assets and liabilities of the solar power assets that will be divested were included in assets and liabilities held for sale in the condensed consolidated balance sheet as of September 30, 2016 . The revenue and net income generated by the solar power assets of Bit-isle during the three and nine months ended September 30, 2016 were insignificant. When an asset is classified as held for sale, the asset's book value is evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. The determination of fair value for assets is dependent upon, among other factors, the potential sales transaction, composition of assets in the disposal group, the comparability of the disposal group to market transactions and negotiations with third party purchasers, etc. Such factors impact the range of potential fair values and the selection of the best estimates. During the three months ended September 30, 2016 , the Company evaluated the recoverability of the carrying value of its assets held for sale. Based on the analysis, it was determined that due to the sales agreement signed in October 2016 (see Note 14), the Company would not recover the carrying value of certain assets. Accordingly, the Company recorded an impairment charge on other current assets of $7,698,000 at September 30, 2016 , reducing the carrying value of such assets from $79,459,000 to the estimated fair value of $71,761,000 . The following table summarizes assets and liabilities that were classified in assets and liabilities held for sale as of September 30, 2016 and December 31, 2015 (in thousands): September 30, December 31, Cash $ 3,755 $ — Accounts receivable 784 2,222 Other current assets 71,761 408 Property, plant and equipment 17,819 23,533 Goodwill — 5,000 Intangible assets 2,772 784 Other assets 32 1,310 Total assets held for sale $ 96,923 $ 33,257 Accounts payable and accrued expenses $ (11,567 ) $ (654 ) Accrued property, plant and equipment — (816 ) Current portion of capital lease and other financing obligation — — Other current liabilities (42 ) (435 ) Capital lease and other financing obligations, less current portion — — Other liabilities (3,051 ) (1,630 ) Total liabilities held for sale $ (14,660 ) $ (3,535 ) 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. 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. On July 5, 2016, the Company completed the sale of these data centers and related assets to Digital Realty for approximately €304,564,000 and £376,171,000 , or approximately $827,314,000 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 $4,242,000 . 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 the acquisition, through July 5, 2016 in the Company's condensed consolidated statement of operations. The results of operations for these data centers during the three months ended September 30, 2016 were insignificant. The following table presents the financial results of the Company's discontinued operations for the nine months ended September 30, 2016: Nine months ended 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 expense 32,851 Income from operations of 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 Income from discontinued operations, net of income taxes $ 14,306 Net cash used in operating activities for discontinued operations was $5,259,000 and net cash provided by investing activities for discontinued operations was $730,603,000 for the nine-months ended September 30, 2016 , including proceeds from the sale of TelecityGroup data centers. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 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 and reported the San Jose land parcel as an asset held for sale in the accompanying consolidated balance sheet as of December 31, 2015. The sale was completed in February 2016. 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 LD2 data center and certain data centers of TelecityGroup in the United Kingdom, Netherlands and Germany. The assets and liabilities of LD2, which were included within the EMEA operating segment, were classified as held for sale in the fourth quarter of 2015 and, therefore, the corresponding depreciation and amortization expense was ceased at that time. This divestiture was not presented as discontinued operations in the consolidated statements of operations, because it did not represent a strategic shift in the Company's business, as the Company continued operating similar businesses after the divestiture. The divestiture was completed on July 5, 2016 and the Company recognized a gain of $27,945,000 on the sale of the LD2 data center, which is included in gains on asset sales in the condensed consolidated statement of operations for the three and nine months ended September 30, 2016. The revenue and net income generated by LD2 during the three months ended September 30, 2016 were insignificant. During the three months ended September 30, 2015 , LD2 generated revenue of $4,654,000 and net income of $2,040,000 . During the nine months ended September 30, 2016 , LD2 generated revenue of $6,116,000 and net income of $2,327,000 . During the nine months ended September 30, 2015 , LD2 generated revenue of $14,082,000 and net income of $5,920,000 . The acquisition of TelecityGroup closed on January 15, 2016. Accordingly, the assets and liabilities of the TelecityGroup data centers that were divested were included in assets and liabilities held for sale in the condensed consolidated balance sheet through July 5, 2016, the date the divestiture closed. The results of operations for the TelecityGroup data centers that were divested, as well as the gain on divestiture, were classified as discontinued operations from January 15, 2016, the date the acquisition closed, through July 5, 2016 (see Note 5). In June 2016, the Company approved the divestiture of the solar power assets of Bit-isle. The assets and liabilities of the solar power assets that will be divested were included in assets and liabilities held for sale in the condensed consolidated balance sheet as of September 30, 2016 . The revenue and net income generated by the solar power assets of Bit-isle during the three and nine months ended September 30, 2016 were insignificant. When an asset is classified as held for sale, the asset's book value is evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. The determination of fair value for assets is dependent upon, among other factors, the potential sales transaction, composition of assets in the disposal group, the comparability of the disposal group to market transactions and negotiations with third party purchasers, etc. Such factors impact the range of potential fair values and the selection of the best estimates. During the three months ended September 30, 2016 , the Company evaluated the recoverability of the carrying value of its assets held for sale. Based on the analysis, it was determined that due to the sales agreement signed in October 2016 (see Note 14), the Company would not recover the carrying value of certain assets. Accordingly, the Company recorded an impairment charge on other current assets of $7,698,000 at September 30, 2016 , reducing the carrying value of such assets from $79,459,000 to the estimated fair value of $71,761,000 . The following table summarizes assets and liabilities that were classified in assets and liabilities held for sale as of September 30, 2016 and December 31, 2015 (in thousands): September 30, December 31, Cash $ 3,755 $ — Accounts receivable 784 2,222 Other current assets 71,761 408 Property, plant and equipment 17,819 23,533 Goodwill — 5,000 Intangible assets 2,772 784 Other assets 32 1,310 Total assets held for sale $ 96,923 $ 33,257 Accounts payable and accrued expenses $ (11,567 ) $ (654 ) Accrued property, plant and equipment — (816 ) Current portion of capital lease and other financing obligation — — Other current liabilities (42 ) (435 ) Capital lease and other financing obligations, less current portion — — Other liabilities (3,051 ) (1,630 ) Total liabilities held for sale $ (14,660 ) $ (3,535 ) 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. 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. On July 5, 2016, the Company completed the sale of these data centers and related assets to Digital Realty for approximately €304,564,000 and £376,171,000 , or approximately $827,314,000 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 $4,242,000 . 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 the acquisition, through July 5, 2016 in the Company's condensed consolidated statement of operations. The results of operations for these data centers during the three months ended September 30, 2016 were insignificant. The following table presents the financial results of the Company's discontinued operations for the nine months ended September 30, 2016: Nine months ended 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 expense 32,851 Income from operations of 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 Income from discontinued operations, net of income taxes $ 14,306 Net cash used in operating activities for discontinued operations was $5,259,000 and net cash provided by investing activities for discontinued operations was $730,603,000 for the nine-months ended September 30, 2016 , including proceeds from the sale of TelecityGroup data centers. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2016 | |
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 its investments in foreign subsidiaries whose functional currencies are other than the U.S. dollar. 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 September 30, 2016 and December 31, 2015, the total principal amount of foreign currency loans, which were designated as net investment hedges, was $674,873,000 and $411,881,000 , respectively. In March 2016, the Company began using foreign exchange forward contracts to hedge against the effect of foreign exchange rate fluctuations on a portion of its net investment in the foreign subsidiaries. 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 sheet. The Company recorded net foreign exchange gains of $5,542,000 and $44,426,000 in other comprehensive income (loss) for the three and nine months ended September 30, 2016 , respectively. The Company recorded net foreign exchange gains of $4,426,000 and net foreign exchange losses of $5,963,000 in other comprehensive income (loss) for the three and nine months ended September 30, 2015 , respectively. The Company recorded no ineffectiveness from its net investment hedges for the three and nine months ended September 30, 2016 and 2015 . Cash Flow Hedges. The Company hedges its exposure to foreign currency exchange rate fluctuations for forecasted revenues and expenses in its EMEA region in order to help manage the Company’s exposure to foreign currency exchange rate fluctuations between the U.S. dollar and the British Pound, Euro 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. Effective January 1, 2015, the Company entered into intercompany hedging instruments (“intercompany derivatives”) with a wholly-owned subsidiary of the Company and simultaneously entered into derivative contracts with unrelated parties to hedge certain forecasted revenues and expenses denominated in currencies other than the U.S. dollar. The following disclosure is prepared on a consolidated basis. Assets and liabilities resulting from intercompany derivatives have been eliminated in consolidation. As of September 30, 2016 , the Company’s cash flow hedges had maturity dates ranging from October 2016 to September 2018 as follows (in thousands): Notional Amount Fair Value (1) Accumulated other comprehensive income (loss) (2) (3) Derivative assets $ 388,269 $ 25,353 $ 53,713 Derivative liabilities 167,706 (3,750 ) (33,791 ) $ 555,975 $ 21,603 $ 19,922 (1) All derivative assets 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 $13,994 within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to revenue and expenses as they mature in the next 12 months . As of December 31, 2015 , the Company’s cash flow hedges had maturities dates ranging from January 2016 to December 2017 as follows (in thousands): Notional Amount Fair Value (1) Accumulated other comprehensive income (loss) (2)(3) Derivative assets $ 367,330 $ 16,027 $ 34,578 Derivative liabilities 47,447 (813 ) (19,709 ) $ 414,777 $ 15,214 $ 14,869 (1) All derivative assets 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 $12,940 within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to revenue and expense as they mature over the next 12 months. During the three months ended September 30, 2016 and 2015 , the ineffective and excluded portions of cash flow hedges recognized in other income (expense) were not significant . During the three months ended September 30, 2016 , the amount of net gains reclassified from accumulated other comprehensive income (loss) to revenue was $10,063,000 and the amount of net losses reclassified from accumulated other comprehensive income (loss) to operating expenses was $4,987,000 . During the three months ended September 30, 2015 , the amount of net gains reclassified from accumulated other comprehensive income (loss) to revenue was $5,590,000 and the amount of net losses reclassified from accumulated other comprehensive income (loss) to operating expenses were not significant . During the nine months ended September 30, 2016 and 2015 , the ineffective portions of cash flow hedges recognized in other income (expense) were not significant . During the nine months ended September 30, 2016 , the amount of net gains reclassified from accumulated other comprehensive income (loss) to revenue was $22,671,000 and the amount of net losses reclassified from accumulated other comprehensive income (loss) to operating expenses was $11,664,000 . During the nine months ended September 30, 2015 , the amount of net gains reclassified from accumulated other comprehensive income (loss) to revenue was $21,096,000 and the amount of net losses reclassified from accumulated other comprehensive income (loss) to operating expenses was $4,167,000 . 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 September 30, 2016 and 2015, gains (losses) associated with these embedded derivatives were not significant . During the nine months ended September 30, 2016 , the losses associated with these embedded derivatives were $7,287,000 . During the nine months ended September 30, 2015 , gains (losses) associated with these embedded derivatives were not significant . 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 in revenues along with gains and losses of the related embedded derivatives. The Company entered into various economic hedges of embedded derivatives during the three and nine months ended September 30, 2016 and 2015 . During the three months ended September 30, 2016 and 2015, the gains (losses) associated with these contracts were not significant . During the nine months ended September 30, 2016 , the gains associated with these contracts were $5,266,000 . During the nine months ended September 30, 2015 , the net losses from these contracts were $2,019,000 . 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 monetary 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, 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 nine months ended September 30, 2016 and 2015 . During the three and nine months ended September 30, 2016 , the Company recognized net gains of $3,169,000 and $44,649,000 , respectively, associated with these contracts. During the three and nine months ended September 30, 2015 , the Company recognized net gain of $12,776,000 and $10,315,000 , 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 September 30, 2016 (in thousands): 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 $ 25,353 $ — $ 25,353 $ (3,385 ) $ 21,968 Net Investment Hedges Foreign currency forward contracts 60 — 60 — 60 25,413 — 25,413 (3,385 ) 22,028 Not designated as hedging instruments: Embedded derivatives 3,587 — 3,587 — 3,587 Economic hedges of embedded derivatives 234 — 234 (17 ) 217 Foreign currency forward contracts 70 — 70 — 70 3,891 — 3,891 (17 ) 3,874 Additional netting benefit — — — (2,621 ) (2,621 ) $ 29,304 $ — $ 29,304 $ (6,023 ) $ 23,281 Liabilities: Designated as hedging instruments Cash flow hedges Foreign currency forward contracts $ 3,750 $ — $ 3,750 $ (3,385 ) $ 365 Net Investment Hedges Foreign currency forward contracts — — — — — 3,750 — 3,750 (3,385 ) 365 Not designated as hedging instruments: Embedded derivatives 3,245 — 3,245 — 3,245 Economic hedges of embedded derivatives 75 — 75 (17 ) 58 Foreign currency forward contracts 3,210 — 3,210 — 3,210 6,530 — 6,530 (17 ) 6,513 Additional netting benefit — — — (2,621 ) (2,621 ) $ 10,280 $ — $ 10,280 $ (6,023 ) $ 4,257 (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. The following table presents the fair value of derivative instruments recognized in the Company’s condensed consolidated balance sheets as of December 31, 2015 (in thousands): Gross Amounts Gross amounts offset in the balance sheet Net balance sheet amounts (1) Gross amounts not offset in the balance sheet (2) Net Assets: Designated as hedging instruments: Foreign currency forward and option contracts $ 16,027 $ — $ 16,027 $ (813 ) $ 15,214 Not designated as hedging instruments: Embedded derivatives 8,926 — 8,926 — 8,926 Economic hedges of embedded derivatives 744 — 744 — 744 Foreign currency forward contracts 43,203 — 43,203 (34,577 ) 8,626 52,873 — 52,873 (34,577 ) 18,296 Additional netting benefit — — — (9,512 ) (9,512 ) $ 68,900 $ — $ 68,900 $ (44,902 ) $ 23,998 Liabilities: Designated as hedging instruments: Foreign currency forward and option contracts $ 813 $ — $ 813 $ (813 ) $ — Not designated as hedging instruments: Embedded derivatives 1,772 — 1,772 — 1,772 Economic hedges of embedded derivatives 417 — 417 — 417 Foreign currency forward contracts 76,923 — 76,923 (34,577 ) 42,346 79,112 — 79,112 (34,577 ) 44,535 Additional netting benefit — — — (9,512 ) (9,512 ) $ 79,925 $ — $ 79,925 $ (44,902 ) $ 35,023 (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. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 were as follows (in thousands): Fair value at Fair value measurement using Level 1 Level 2 Assets: Cash $ 451,258 $ 451,258 $ — Money market and deposit accounts 533,496 533,496 — Publicly traded equity securities 8,254 8,254 — Certificates of deposit 10,386 — 10,386 Derivative instruments (1) 29,304 — 29,304 $ 1,032,698 $ 993,008 $ 39,690 Liabilities: Derivative instruments (1) $ 10,280 $ — $ 10,280 (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. The Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 were as follows (in thousands): Fair value at Fair value measurement using Level 1 Level 2 Assets: Cash $ 1,139,554 $ 1,139,554 $ — Money market and deposit accounts 1,089,284 1,089,284 — Publicly traded equity securities 3,353 3,353 — Certificates of deposit 14,106 — 14,106 Derivative instruments (1) 68,900 — 68,900 $ 2,315,197 $ 2,232,191 $ 83,006 Liabilities: Derivative instruments (1) $ 79,925 $ — $ 79,925 (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. The Company did not have any significant Level 3 financial assets or financial liabilities as of September 30, 2016 and December 31, 2015 . |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company has several significant stockholders and other related parties that are also customers and/or vendors. The Company's activity of related party transactions was as follows (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Revenues 3,514 2,240 9,249 6,419 Costs and services 2,732 1,246 9,012 2,319 September 30, 2016 2015 Accounts Receivable 1,437 873 Accounts Payable 1,108 — On February 10, 2016, the Company entered into a purchase and sale agreement to acquire land and a building ("CH5") from Prologis, L.P., with which it shares a common board member, for approximately $6.3 million . The purchase was completed on July 18, 2016. The transaction was accounted for as a business combination using the acquisition method of accounting. This transaction is considered a related party transaction but is not reflected in the related party data presented above. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2016 | |
Leases [Abstract] | |
Leases | Leases Capital Lease and Other Financing Obligations Tokyo 5 ("TY5") Equipment Leases In February 2016, the Company entered into a lease agreement for certain equipment in TY5 data center in Tokyo metro area. The lease was accounted for as a capital lease. Monthly payments under the equipment lease will be made through February 2032 at an effective interest rate of 6.33% . The total outstanding obligation under the equipment lease was approximately ¥3,074,947,000 , or $30,319,000 in U.S. dollars at the exchange rate in effect as of September 30, 2016 . Maturities of Capital Lease and Other Financing Obligations The Company’s capital lease and other financing obligations are summarized as follows (in thousands): Capital lease obligations Other financing obligations (1) Total 2016 (3 months remaining) $ 20,611 $ 20,229 $ 40,840 2017 82,812 80,150 162,962 2018 82,957 76,065 159,022 2019 83,700 70,625 154,325 2020 83,710 69,529 153,239 Thereafter 918,792 764,347 1,683,139 Total minimum lease payments 1,272,582 1,080,945 2,353,527 Plus amount representing residual property value — 517,957 517,957 Less amount representing interest (566,825 ) (766,084 ) (1,332,909 ) Present value of net minimum lease payments 705,757 832,818 1,538,575 Less current portion (26,643 ) (65,477 ) (92,120 ) $ 679,114 $ 767,341 $ 1,446,455 (1) Other financing obligations are primarily build-to-suit lease obligations. |
Debt Facilities
Debt Facilities | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt Facilities | Debt Facilities Mortgage and Loans Payable The Company’s mortgage and loans payable consisted of the following (in thousands): September 30, December 31, 2015 Term loans $ 1,069,965 $ 456,740 Bridge term loan 468,350 386,547 Revolving credit facility borrowings — 325,622 Brazil financings 1,585 27,113 Mortgage payable and other loans payable 49,514 47,677 1,589,414 1,243,699 Less amount representing debt discount and debt issuance cost (14,015 ) (2,681 ) Plus amount representing mortgage premium 2,004 1,987 1,577,403 1,243,005 Less current portion (518,985 ) (770,236 ) $ 1,058,418 $ 472,769 On September 30, 2016, the Company entered into a five year term loan agreement ("Term Loan Commitment") with the BTMU for ¥47,500,000,000 or approximately $468,350,000 at the exchange rate in effect on September 30, 2016. Loans made under the term loan commitment must be repaid in equal quarterly installments of ¥625,000,000 , with the remaining ¥35,625,000,000 to be repaid in full on October 29, 2021. Borrowings under the Term Loan Commitment bear interest at the Tokyo Interbank Offered Rate for Japanese Yen, plus a margin of 1.5% per annum. As of September 30, 2016, the Company had no borrowings outstanding under Term Loan Commitment. In June 2016, the Company prepaid and terminated its 2012 and 2013 Brazil financings. In connection with this prepayment, the Company paid 90,652,000 Brazilian Reals including principal, accrued interest and termination fees, or approximately $28,298,000 at the exchange rate in effect as of June 30, 2016. The loss on debt extinguishment recognized in the condensed consolidated statements of operations was insignificant. During the three months ended March 31, 2016, the Company repaid $325,622,000 of borrowings under its revolving credit facility. No borrowings were outstanding under the revolving credit facility as of September 30, 2016 . In February 2016, the Company borrowed the remaining ¥1,040,000,000 , or approximately $10,254,000 at the exchange rate in effect on September 30, 2016 , available under its Bridge Term Loan Agreement. On January 15, 2016, the Company prepaid and terminated loans payable of TelecityGroup. 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. See Note 3 for additional information. On January 8, 2016, the Company borrowed the full amount of the $250,000,000 and £300,000,000 seven year term loan commitments made available to it under the second amendment to the Company's Senior Credit Facility. The $250,000,000 seven year term loan bears interest at 4.00% per annum and will be repaid in quarterly installments of $625,000 commencing on June 30, 2016 with the remaining $233,125,000 due on January 8, 2023. The £300,000,000 seven year term loan bears interest at 4.50% per annum and will be repaid in quarterly installments of £750,000 commencing on June 30, 2016 with the remaining £279,750,000 due on January 8, 2023. As of September 30, 2016, the Company had $248,750,000 and £298,500,000 outstanding term loan balances or a total of approximately $635,964,000 at the exchange rate in effect on September 30, 2016. Convertible Debt The Company’s convertible debt consisted of the following (in thousands): September 30, 2016 December 31, 2015 4.75% convertible subordinated notes $ — $ 150,082 Less amount representing debt discount and debt issuance cost — (3,961 ) $ — $ 146,121 4.75% Convertible Subordinated Notes In April and June 2016, holders of the 4.75% convertible subordinated notes converted or redeemed a total of $150,082,000 of the principal amount of the notes for 1,981,662 shares of the Company’s common stock and $3,619,000 in cash, comprised of accrued interest, cash paid in lieu of fractional shares and principal redemption. In the Company’s consolidated statement of cash flows for the nine months ended September 30, 2016, the principal redemption and cash paid in lieu of issuing fractional shares to settle a portion of the principal amount were included within net cash provided by (used in) financing activities and the accrued interest paid was included within net cash provided by operating activities. To minimize the impact of potential dilution upon conversion of the 4.75% convertible subordinated notes, the Company entered into capped call transactions (the “Capped Call”) separate from the issuance of the 4.75% convertible subordinated notes and paid a premium of $49,664,000 for the Capped Call in 2009. Upon maturity of the 4.75% convertible subordinated notes on June 15, 2016, the Company settled the capped call transaction and received 380,779 shares of common stock, which were placed in treasury and resulted in a credit of $141,688,000 to additional paid in capital at the market price of $372.10 on June 15, 2016. Senior Notes The Company’s senior notes consisted of the following as of (in thousands): September 30, December 31, 2015 5.375% Senior Notes due 2023 $ 1,000,000 $ 1,000,000 5.375% Senior Notes due 2022 750,000 750,000 4.875% Senior Notes due 2020 500,000 500,000 5.75% Senior Notes due 2025 500,000 500,000 5.875% Senior Notes due 2026 1,100,000 1,100,000 3,850,000 3,850,000 Less amount representing debt issuance cost (40,668 ) (45,366 ) $ 3,809,332 $ 3,804,634 Maturities of Debt Facilities The following table sets forth maturities of the Company’s debt, including mortgage and loans payable and senior notes and excluding debt discounts as of September 30, 2016 (in thousands): Year ending: 2016 (3 months remaining) $ 481,048 2017 50,851 2018 50,945 2019 353,211 2020 510,024 Thereafter 3,995,339 $ 5,441,418 Fair Value of Debt Facilities The following table sets forth the estimated fair values of the Company’s mortgage and loans payable, senior notes and convertible debt, including current maturities, as of (in thousands): September 30, December 31, 2015 Mortgage and loans payable $ 1,589,087 $ 916,602 Convertible debt — 151,997 Senior notes 4,088,117 3,954,000 Revolving credit line — 325,617 The Company has determined that the inputs used to value its debt facilities fall within Level 2 of the fair value hierarchy. Interest Charges The following table sets forth total interest costs incurred and total interest costs capitalized for the periods presented (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Interest expense $ 92,200 $ 76,269 $ 293,395 $ 219,556 Interest capitalized 3,234 1,831 9,479 8,677 Interest charges incurred $ 95,434 $ 78,100 $ 302,874 $ 228,233 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Primarily as a result of the Company’s various IBX expansion projects, as of September 30, 2016 , the Company was contractually committed for $474,579,000 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 September 30, 2016 , such as commitments to purchase power in select locations through the remainder of 2016 and thereafter, and other open purchase orders for goods or services to be delivered or provided during the remainder of 2016 and thereafter. Such other miscellaneous purchase commitments totaled $343,981,000 as of September 30, 2016 . The Company's 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 the financial position, results of operations, or cash flows of the Company. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of tax, are as follows (in thousands): Balance as of Net Change Balance as of Foreign currency translation adjustment (“CTA”) loss $ (523,709 ) $ (215,065 ) $ (738,774 ) Unrealized gain on cash flow hedges 11,153 3,789 14,942 Unrealized gain (loss) on available-for-sale securities (139 ) 2,382 2,243 Net investment hedge CTA gain 4,484 4,163 8,647 Net actuarial gain (loss) on defined benefit plans (848 ) 21 (827 ) $ (509,059 ) $ (204,710 ) $ (713,769 ) Changes in foreign currency exchange rates can have a significant impact to the Company’s consolidated balance sheets (as evidenced above in the Company’s foreign currency translation gain or loss), as well as its consolidated results of operations, as amounts in foreign currencies generally translate into more U.S. dollars when the U.S. dollar weakens or fewer U.S. dollars when the U.S. dollar strengthens. As of September 30, 2016 , the U.S. dollar was generally stronger relative to certain of the currencies of the foreign countries in which the Company operates. This overall strengthening of the U.S. dollar had an overall unfavorable impact on the Company’s 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 nine months ended September 30, 2016 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 consolidated financial position and results of operations including the amount of revenue that the Company reports in future periods. Dividends On February 18, 2016 , the Company declared a quarterly cash dividend of $1.75 per share, with a record date of March 9, 2016 and a payment date of March 23, 2016 . The Company paid a total of $121,494,000 on March 23, 2016 for the first quarter cash dividend. In addition, the Company accrued an additional $1,366,000 in dividends payable for the restricted stock units that have not yet vested. On May 4, 2016, the Company declared a quarterly cash dividend of $1.75 per share, with a record date of May 25, 2016 and a payment date of June 15, 2016. The Company paid a total of $121,530,000 on June 15, 2016 for the second quarter cash dividend. In addition, the Company accrued an additional $2,053,000 in dividends payable for restricted stock units that have not yet vested. On August 3, 2016, the Company declared a quarterly cash dividend of $1.75 per share, with a record date of August 24, 2016 and a payment date of September 14, 2016. The Company paid a total of $124,465,000 on September 14, 2016 for the third quarter cash dividend. In addition, the Company accrued an additional $2,498,000 in dividends payable for restricted stock units that have not yet vested. Stock-Based Compensation In the first half of 2016, the Compensation Committee and the Stock Award Committee of the Company’s Board of Directors approved the issuance of an aggregate of 530,068 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 $290.89 and a weighted-average requisite service period of 3.47 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 revenue 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 February 2016 and 2015, whereby revenue and adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) were used as the performance measurements in prior years’ grants. 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 2016 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): Three months ended Nine months ended 2016 2015 2016 2015 Cost of revenues $ 3,316 $ 2,514 $ 9,754 $ 7,371 Sales and marketing 11,702 9,173 32,187 27,806 General and administrative 27,455 22,282 74,370 63,398 $ 42,473 $ 33,969 $ 116,311 $ 98,575 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
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 revenue 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): Three months ended Nine months ended 2016 2015 2016 2015 Adjusted EBITDA: Americas $ 202,131 $ 174,170 $ 581,619 $ 517,790 EMEA 121,468 81,403 366,412 236,967 Asia-Pacific 96,443 65,899 272,952 183,725 Total adjusted EBITDA 420,042 321,472 1,220,983 938,482 Depreciation, amortization and accretion expense (215,370 ) (133,268 ) (631,242 ) (384,068 ) Stock-based compensation expense (42,473 ) (33,969 ) (116,311 ) (98,575 ) Acquisition costs (12,505 ) (13,352 ) (64,635 ) (24,374 ) Impairment charges (7,698 ) — (7,698 ) — Gains on asset sales 27,945 — 33,187 — Income from continuing operations $ 169,941 $ 140,883 $ 434,284 $ 431,465 The Company also provides the following additional segment disclosures (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Total revenues: Americas $ 425,142 $ 382,630 $ 1,243,007 $ 1,118,046 EMEA 301,250 177,563 869,715 516,153 Asia-Pacific 198,284 126,456 556,620 361,206 $ 924,676 $ 686,649 $ 2,669,342 $ 1,995,405 Total depreciation and amortization: Americas $ 81,724 $ 69,721 $ 236,385 $ 205,674 EMEA 79,292 32,851 237,846 86,991 Asia-Pacific 53,809 29,831 153,179 88,750 $ 214,825 $ 132,403 $ 627,410 $ 381,415 Capital expenditures: Americas $ 147,328 $ 105,250 $ 346,817 $ 292,376 EMEA 79,585 39,816 223,440 124,299 Asia-Pacific 52,564 70,980 156,787 170,833 $ 279,477 $ 216,046 $ 727,044 $ 587,508 The Company’s long-lived assets are located in the following geographic areas as of (in thousands): September 30, December 31, Americas $ 3,273,748 $ 3,025,450 EMEA 2,400,057 1,157,304 Asia-Pacific 1,577,594 1,423,682 $ 7,251,399 $ 5,606,436 Revenue information on a services basis is as follows (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Colocation $ 680,541 $ 511,652 $ 1,963,103 $ 1,489,807 Interconnection 135,489 110,568 391,683 316,887 Managed infrastructure 52,986 22,327 149,697 69,648 Other 8,478 2,174 21,876 6,727 Recurring revenues 877,494 646,721 2,526,359 1,883,069 Non-recurring revenues 47,182 39,928 142,983 112,336 $ 924,676 $ 686,649 $ 2,669,342 $ 1,995,405 The following table presents the retrospective adjustments to the Company's revenue information on a services basis: Three months ended March 31, 2016 June 30, 2016 Colocation $ 619,893 $ 662,669 Interconnection 123,954 132,240 Managed infrastructure 47,987 48,724 Other 5,260 8,138 Recurring revenues 797,094 851,771 Non-recurring revenues 47,062 48,739 $ 844,156 $ 900,510 No single customer accounted for 10% or greater of the Company’s revenues for the three and nine months ended September 30, 2016 and 2015 . No single customer accounted for 10% or greater of the Company’s gross accounts receivable as of September 30, 2016 and December 31, 2015 . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In October 2016, the Company drew down the full amount of the Term Loan Commitment of ¥47,500,000,000 or approximately $453,150,000 at the exchange rate in effect on October 31, 2016 and used it to repay its Bridge Term Loan that the Company entered into with BTMU in September 2015, in connection with the Bit-isle acquisition. 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 ¥400,000,000 upon the closing of the transaction, or approximately $3,816,000 at the exchange rate in effect on October 31, 2016. In addition, the Company expects to receive remaining payments of ¥2,500,000,000 in November 2016 and ¥5,313,384,000 in March 2017, for a total of ¥7,813,384,000 , or approximately $74,540,000 at the exchange rate in effect on October 31, 2016. On November 2, 2016, the Company declared a quarterly cash dividend of $1.75 per share, which is payable on December 14, 2016 to the Company’s common stockholders of record as of the close of business on November 16, 2016. |
Basis of Presentation and Sig20
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2015 has been derived from audited consolidated financial statements as of that date. The 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 (“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 26, 2016. 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 the Paris IBX Data Center from August 1, 2016, Telecity Group plc (“TelecityGroup”) from January 15, 2016, Bit-isle Inc. (“Bit-isle”) from November 2, 2015 and Nimbo Technologies Inc. (“Nimbo”) from January 14, 2015. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Income Taxes | Income Taxes The Company began operating as a real estate investment trust for federal income tax purposes ("REIT") effective January 1, 2015. In May 2015, the Company received a favorable private letter ruling from the U.S. Internal Revenue Service in connection with the Company’s conversion to a REIT for federal income tax purposes. As a result, the Company may deduct the distributions made to its stockholders from taxable income generated by the Company and its qualified REIT subsidiaries (“QRSs”). The Company’s dividends paid deduction generally eliminates the taxable income of the Company and its QRSs, resulting in no U.S. income tax due. However, the Company's taxable REIT subsidiaries (“TRSs”) have been and 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 a 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Not Yet Adopted I n October, 2016, Financial Accounting Standards Board ("FASB") has issued Accounting Standards Update ("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 public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, 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 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 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 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 is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. 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 fiscal years beginning after December 15, 2016, and interim periods within those annual periods, 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 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 should 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 is currently evaluating the impact that the adoption of this standard will have on its 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 is currently evaluating the impact that the adoption of this standard 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 public companies 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 operating 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 public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. 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 2015-04, ASU 2016-08, ASU 2016-10 and ASU 2016-12, respectively (ASU 2014-09, ASU 2015-04, ASU 2016-08, ASU 2016-10, ASU 2016-11 and ASU 2016-12 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, 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 for public entities is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. Accounting Standards Adopted In September 2015, the FASB issued ASU 2015-16, Business Combinations ("ASU 2015-16"), to simplify accounting for adjustments made to provisional amounts recognized in a business combination by eliminating the requirement to retrospectively account for those adjustments. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The amendments in this ASU require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects as a result of changes to provisional amounts, calculated as if the accounting had been completed at the acquisition date. The Company adopted ASU 2015-16 in the three months ended March 31, 2016. The adoption of ASU 2015-16 did not have a significant impact on the Company's consolidated financial statements. In May 2015, the FASB issued ASU 2015-07, Fair Value Measurement (“ASU 2015-07”), which permits a reporting entity, as a practical expedient, to measure the fair value of certain investments using the net asset value per share of the investment. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years with early adoption permitted. A reporting entity should apply the amendment retrospectively to all periods presented. The retrospective approach requires that an investment for which fair value is measured using the net asset value per share practical expedient be removed from the fair value hierarchy in all periods presented in an entity’s financial statements. The Company adopted ASU 2015-07 in the three months ended March 31, 2016. The adoption of ASU 2015-07 did not have a significant impact on the Company's consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidations (“ASU 2015-02”). This ASU requires companies to adopt a new consolidation model, specifically: (1) the ASU modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (2) the ASU eliminates the presumption that a general partner should consolidate a limited partnership; (3) the ASU affects the consolidation analysis of reporting entities involved with VIEs and (4) the ASU provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company adopted ASU 2015-02 in the three months ended March 31, 2016. The adoption of ASU 2015-02 did not have a significant impact on the Company's consolidated financial statements. In January 2015, the FASB issued ASU 2015-01, Income Statement – Extraordinary and Unusual Items (“ASU 2015-01”), to simplify the income statement presentation requirements by eliminating the concept of extraordinary items. ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company adopted ASU 2015-01 in the three months ended March 31, 2016. The adoption of ASU 2015-01 did not have a significant impact on the Company's consolidated financial statements. |
Cash Flow Hedges | Cash Flow Hedges. The Company hedges its exposure to foreign currency exchange rate fluctuations for forecasted revenues and expenses in its EMEA region in order to help manage the Company’s exposure to foreign currency exchange rate fluctuations between the U.S. dollar and the British Pound, Euro 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 September 30, 2016 and 2015, gains (losses) associated with these embedded derivatives were not significant . During the nine months ended September 30, 2016 , the losses associated with these embedded derivatives were $7,287,000 . During the nine months ended September 30, 2015 , gains (losses) associated with these embedded derivatives were not significant . 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 in revenues along with gains and losses of the related embedded derivatives. The Company entered into various economic hedges of embedded derivatives during the three and nine months ended September 30, 2016 and 2015 . During the three months ended September 30, 2016 and 2015, the gains (losses) associated with these contracts were not significant . During the nine months ended September 30, 2016 , the gains associated with these contracts were $5,266,000 . During the nine months ended September 30, 2015 , the net losses from these contracts were $2,019,000 . 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 monetary 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, 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 nine months ended September 30, 2016 and 2015 . |
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 revenue and adjusted EBITDA performance both on a consolidated basis and based on these three reportable segments. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
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): Three months ended Nine months ended 2016 2015 2016 2015 Net income: Net income from continuing operations $ 48,769 $ 41,132 $ 50,744 $ 177,043 Net income from discontinued operations 2,681 — 14,306 — Net income $ 51,450 $ 41,132 $ 65,050 $ 177,043 Weighted-average shares used to calculate basic EPS 71,190 57,082 69,689 56,894 Effect of dilutive securities: Employee equity awards 718 626 700 627 Weighted-average shares used to calculate diluted EPS 71,908 57,708 70,389 57,521 Basic EPS: Continuing operations $ 0.69 $ 0.72 $ 0.73 $ 3.11 Discontinued operations 0.04 — 0.21 — Basic EPS $ 0.73 $ 0.72 $ 0.94 $ 3.11 Diluted EPS: Continuing operations $ 0.68 $ 0.71 $ 0.72 $ 3.08 Discontinued operations 0.04 — 0.20 — Diluted EPS $ 0.72 $ 0.71 $ 0.92 $ 3.08 |
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): Three months ended Nine months ended 2016 2015 2016 2015 Shares reserved for conversion of 4.75% convertible subordinated notes — 1,970 1,193 1,956 Common stock related to employee equity awards 22 201 17 117 22 2,171 1,210 2,073 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of recognized identified assets acquired and liabilities assumed | As of the acquisition date, the preliminary allocation of the purchase price is as follows (in thousands): Cash and cash equivalents $ 73,368 Accounts receivable 24,042 Other current assets 41,079 Assets held for sale 867,917 Property, plant and equipment 1,058,583 Goodwill 2,216,173 Intangible assets 704,014 Deferred tax assets 1,198 Other assets 4,124 Total assets acquired 4,990,498 Accounts payable and accrued expenses (90,589 ) Accrued property, plant and equipment (3,634 ) Other current liabilities (27,259 ) Liabilities held for sale (156,171 ) Capital lease and other financing obligations (162,359 ) Mortgage and loans payable (592,304 ) Deferred tax liabilities (177,715 ) Other liabilities (35,581 ) Net assets acquired $ 3,744,886 The preliminary purchase price allocation, which excludes settlement of the Paris 3 financing obligations, was as follows (in thousands): Cash and cash equivalent $ 4,073 Accounts receivable 1,507 Other current assets 794 Property, plant, and equipment 138,568 Intangible assets 11,758 Goodwill 45,187 Other assets 82 Total assets acquired 201,969 Accounts payable and accrued liabilities (2,044 ) Other current liabilities (2,798 ) Deferred tax liabilities (32,687 ) Other liabilities (790 ) Net assets acquired $ 163,650 Based upon the purchase price and the valuation of Bit-isle, the purchase price allocation was as follows (in thousands): Cash and cash equivalents $ 33,198 Accounts receivable 7,359 Other current assets 51,038 Long-term investments 3,806 Property, plant and equipment 308,985 Goodwill 95,444 Intangible assets 111,374 Other assets 22,981 Total assets acquired 634,185 Accounts payable and accrued expenses (15,028 ) Accrued property, plant and equipment (465 ) Capital lease and other financing obligations (108,833 ) Mortgage and loans payable (190,227 ) Other current liabilities (8,689 ) Deferred tax liabilities (32,192 ) Other liabilities (3,384 ) Net assets acquired $ 275,367 |
Acquired identifiable intangible assets | The following table presents certain information on the acquired identifiable intangible assets (dollars in thousands): Intangible assets Fair value Estimated useful lives (years) Weighted-average estimated useful lives (years) Customer relationships $ 105,434 13 13 Trade name 3,455 2 2 Favorable solar contracts 2,410 18 18 Other intangible assets 75 0.25 0.25 The following table presents certain information on the acquired intangible assets (dollars in thousands): 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 40,025 2.0 - 25.4 19.2 The following table presents certain information on the acquired identifiable intangible assets (dollars in thousands): 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 |
Unaudited pro forma combined consolidated statements of operations | The following table sets forth the unaudited pro forma consolidated combined results of operations for the three and nine months ended September 30, 2015 (in thousands): Three months ended September 30, Nine months ended September 30, 2015 2015 Revenues $ 819,423 $ 2,387,117 Net income from continuing operations 61,243 153,488 Basic EPS 0.96 2.41 Diluted EPS 0.95 2.38 |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of assets held-for-sale | The following table summarizes assets and liabilities that were classified in assets and liabilities held for sale as of September 30, 2016 and December 31, 2015 (in thousands): September 30, December 31, Cash $ 3,755 $ — Accounts receivable 784 2,222 Other current assets 71,761 408 Property, plant and equipment 17,819 23,533 Goodwill — 5,000 Intangible assets 2,772 784 Other assets 32 1,310 Total assets held for sale $ 96,923 $ 33,257 Accounts payable and accrued expenses $ (11,567 ) $ (654 ) Accrued property, plant and equipment — (816 ) Current portion of capital lease and other financing obligation — — Other current liabilities (42 ) (435 ) Capital lease and other financing obligations, less current portion — — Other liabilities (3,051 ) (1,630 ) Total liabilities held for sale $ (14,660 ) $ (3,535 ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 nine months ended September 30, 2016: Nine months ended 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 expense 32,851 Income from operations of 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 Income from discontinued operations, net of income taxes $ 14,306 |
Derivatives and Hedging Activ25
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of cash flow hedges | As of September 30, 2016 , the Company’s cash flow hedges had maturity dates ranging from October 2016 to September 2018 as follows (in thousands): Notional Amount Fair Value (1) Accumulated other comprehensive income (loss) (2) (3) Derivative assets $ 388,269 $ 25,353 $ 53,713 Derivative liabilities 167,706 (3,750 ) (33,791 ) $ 555,975 $ 21,603 $ 19,922 (1) All derivative assets 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 $13,994 within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to revenue and expenses as they mature in the next 12 months . As of December 31, 2015 , the Company’s cash flow hedges had maturities dates ranging from January 2016 to December 2017 as follows (in thousands): Notional Amount Fair Value (1) Accumulated other comprehensive income (loss) (2)(3) Derivative assets $ 367,330 $ 16,027 $ 34,578 Derivative liabilities 47,447 (813 ) (19,709 ) $ 414,777 $ 15,214 $ 14,869 (1) All derivative assets 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 $12,940 within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to revenue and expense as they mature over the next 12 months. |
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 September 30, 2016 (in thousands): 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 $ 25,353 $ — $ 25,353 $ (3,385 ) $ 21,968 Net Investment Hedges Foreign currency forward contracts 60 — 60 — 60 25,413 — 25,413 (3,385 ) 22,028 Not designated as hedging instruments: Embedded derivatives 3,587 — 3,587 — 3,587 Economic hedges of embedded derivatives 234 — 234 (17 ) 217 Foreign currency forward contracts 70 — 70 — 70 3,891 — 3,891 (17 ) 3,874 Additional netting benefit — — — (2,621 ) (2,621 ) $ 29,304 $ — $ 29,304 $ (6,023 ) $ 23,281 Liabilities: Designated as hedging instruments Cash flow hedges Foreign currency forward contracts $ 3,750 $ — $ 3,750 $ (3,385 ) $ 365 Net Investment Hedges Foreign currency forward contracts — — — — — 3,750 — 3,750 (3,385 ) 365 Not designated as hedging instruments: Embedded derivatives 3,245 — 3,245 — 3,245 Economic hedges of embedded derivatives 75 — 75 (17 ) 58 Foreign currency forward contracts 3,210 — 3,210 — 3,210 6,530 — 6,530 (17 ) 6,513 Additional netting benefit — — — (2,621 ) (2,621 ) $ 10,280 $ — $ 10,280 $ (6,023 ) $ 4,257 (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. The following table presents the fair value of derivative instruments recognized in the Company’s condensed consolidated balance sheets as of December 31, 2015 (in thousands): Gross Amounts Gross amounts offset in the balance sheet Net balance sheet amounts (1) Gross amounts not offset in the balance sheet (2) Net Assets: Designated as hedging instruments: Foreign currency forward and option contracts $ 16,027 $ — $ 16,027 $ (813 ) $ 15,214 Not designated as hedging instruments: Embedded derivatives 8,926 — 8,926 — 8,926 Economic hedges of embedded derivatives 744 — 744 — 744 Foreign currency forward contracts 43,203 — 43,203 (34,577 ) 8,626 52,873 — 52,873 (34,577 ) 18,296 Additional netting benefit — — — (9,512 ) (9,512 ) $ 68,900 $ — $ 68,900 $ (44,902 ) $ 23,998 Liabilities: Designated as hedging instruments: Foreign currency forward and option contracts $ 813 $ — $ 813 $ (813 ) $ — Not designated as hedging instruments: Embedded derivatives 1,772 — 1,772 — 1,772 Economic hedges of embedded derivatives 417 — 417 — 417 Foreign currency forward contracts 76,923 — 76,923 (34,577 ) 42,346 79,112 — 79,112 (34,577 ) 44,535 Additional netting benefit — — — (9,512 ) (9,512 ) $ 79,925 $ — $ 79,925 $ (44,902 ) $ 35,023 (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. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016 were as follows (in thousands): Fair value at Fair value measurement using Level 1 Level 2 Assets: Cash $ 451,258 $ 451,258 $ — Money market and deposit accounts 533,496 533,496 — Publicly traded equity securities 8,254 8,254 — Certificates of deposit 10,386 — 10,386 Derivative instruments (1) 29,304 — 29,304 $ 1,032,698 $ 993,008 $ 39,690 Liabilities: Derivative instruments (1) $ 10,280 $ — $ 10,280 (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. The Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 were as follows (in thousands): Fair value at Fair value measurement using Level 1 Level 2 Assets: Cash $ 1,139,554 $ 1,139,554 $ — Money market and deposit accounts 1,089,284 1,089,284 — Publicly traded equity securities 3,353 3,353 — Certificates of deposit 14,106 — 14,106 Derivative instruments (1) 68,900 — 68,900 $ 2,315,197 $ 2,232,191 $ 83,006 Liabilities: Derivative instruments (1) $ 79,925 $ — $ 79,925 (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. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related party transactions | The Company has several significant stockholders and other related parties that are also customers and/or vendors. The Company's activity of related party transactions was as follows (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Revenues 3,514 2,240 9,249 6,419 Costs and services 2,732 1,246 9,012 2,319 September 30, 2016 2015 Accounts Receivable 1,437 873 Accounts Payable 1,108 — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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): Capital lease obligations Other financing obligations (1) Total 2016 (3 months remaining) $ 20,611 $ 20,229 $ 40,840 2017 82,812 80,150 162,962 2018 82,957 76,065 159,022 2019 83,700 70,625 154,325 2020 83,710 69,529 153,239 Thereafter 918,792 764,347 1,683,139 Total minimum lease payments 1,272,582 1,080,945 2,353,527 Plus amount representing residual property value — 517,957 517,957 Less amount representing interest (566,825 ) (766,084 ) (1,332,909 ) Present value of net minimum lease payments 705,757 832,818 1,538,575 Less current portion (26,643 ) (65,477 ) (92,120 ) $ 679,114 $ 767,341 $ 1,446,455 (1) Other financing obligations are primarily build-to-suit lease obligations. |
Debt Facilities (Tables)
Debt Facilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Summary of loans payable and senior notes | The Company’s mortgage and loans payable consisted of the following (in thousands): September 30, December 31, 2015 Term loans $ 1,069,965 $ 456,740 Bridge term loan 468,350 386,547 Revolving credit facility borrowings — 325,622 Brazil financings 1,585 27,113 Mortgage payable and other loans payable 49,514 47,677 1,589,414 1,243,699 Less amount representing debt discount and debt issuance cost (14,015 ) (2,681 ) Plus amount representing mortgage premium 2,004 1,987 1,577,403 1,243,005 Less current portion (518,985 ) (770,236 ) $ 1,058,418 $ 472,769 The Company’s senior notes consisted of the following as of (in thousands): September 30, December 31, 2015 5.375% Senior Notes due 2023 $ 1,000,000 $ 1,000,000 5.375% Senior Notes due 2022 750,000 750,000 4.875% Senior Notes due 2020 500,000 500,000 5.75% Senior Notes due 2025 500,000 500,000 5.875% Senior Notes due 2026 1,100,000 1,100,000 3,850,000 3,850,000 Less amount representing debt issuance cost (40,668 ) (45,366 ) $ 3,809,332 $ 3,804,634 |
Convertible debt | The Company’s convertible debt consisted of the following (in thousands): September 30, 2016 December 31, 2015 4.75% convertible subordinated notes $ — $ 150,082 Less amount representing debt discount and debt issuance cost — (3,961 ) $ — $ 146,121 |
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 and excluding debt discounts as of September 30, 2016 (in thousands): Year ending: 2016 (3 months remaining) $ 481,048 2017 50,851 2018 50,945 2019 353,211 2020 510,024 Thereafter 3,995,339 $ 5,441,418 |
Fair value of debt facilities | The following table sets forth the estimated fair values of the Company’s mortgage and loans payable, senior notes and convertible debt, including current maturities, as of (in thousands): September 30, December 31, 2015 Mortgage and loans payable $ 1,589,087 $ 916,602 Convertible debt — 151,997 Senior notes 4,088,117 3,954,000 Revolving credit line — 325,617 |
Interest charges | The following table sets forth total interest costs incurred and total interest costs capitalized for the periods presented (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Interest expense $ 92,200 $ 76,269 $ 293,395 $ 219,556 Interest capitalized 3,234 1,831 9,479 8,677 Interest charges incurred $ 95,434 $ 78,100 $ 302,874 $ 228,233 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Components of accumulated other comprehensive loss | The components of accumulated other comprehensive loss, net of tax, are as follows (in thousands): Balance as of Net Change Balance as of Foreign currency translation adjustment (“CTA”) loss $ (523,709 ) $ (215,065 ) $ (738,774 ) Unrealized gain on cash flow hedges 11,153 3,789 14,942 Unrealized gain (loss) on available-for-sale securities (139 ) 2,382 2,243 Net investment hedge CTA gain 4,484 4,163 8,647 Net actuarial gain (loss) on defined benefit plans (848 ) 21 (827 ) $ (509,059 ) $ (204,710 ) $ (713,769 ) |
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): Three months ended Nine months ended 2016 2015 2016 2015 Cost of revenues $ 3,316 $ 2,514 $ 9,754 $ 7,371 Sales and marketing 11,702 9,173 32,187 27,806 General and administrative 27,455 22,282 74,370 63,398 $ 42,473 $ 33,969 $ 116,311 $ 98,575 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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): Three months ended Nine months ended 2016 2015 2016 2015 Adjusted EBITDA: Americas $ 202,131 $ 174,170 $ 581,619 $ 517,790 EMEA 121,468 81,403 366,412 236,967 Asia-Pacific 96,443 65,899 272,952 183,725 Total adjusted EBITDA 420,042 321,472 1,220,983 938,482 Depreciation, amortization and accretion expense (215,370 ) (133,268 ) (631,242 ) (384,068 ) Stock-based compensation expense (42,473 ) (33,969 ) (116,311 ) (98,575 ) Acquisition costs (12,505 ) (13,352 ) (64,635 ) (24,374 ) Impairment charges (7,698 ) — (7,698 ) — Gains on asset sales 27,945 — 33,187 — Income from continuing operations $ 169,941 $ 140,883 $ 434,284 $ 431,465 |
Segment disclosures | The Company also provides the following additional segment disclosures (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Total revenues: Americas $ 425,142 $ 382,630 $ 1,243,007 $ 1,118,046 EMEA 301,250 177,563 869,715 516,153 Asia-Pacific 198,284 126,456 556,620 361,206 $ 924,676 $ 686,649 $ 2,669,342 $ 1,995,405 Total depreciation and amortization: Americas $ 81,724 $ 69,721 $ 236,385 $ 205,674 EMEA 79,292 32,851 237,846 86,991 Asia-Pacific 53,809 29,831 153,179 88,750 $ 214,825 $ 132,403 $ 627,410 $ 381,415 Capital expenditures: Americas $ 147,328 $ 105,250 $ 346,817 $ 292,376 EMEA 79,585 39,816 223,440 124,299 Asia-Pacific 52,564 70,980 156,787 170,833 $ 279,477 $ 216,046 $ 727,044 $ 587,508 |
Segment long-lived assets | The Company’s long-lived assets are located in the following geographic areas as of (in thousands): September 30, December 31, Americas $ 3,273,748 $ 3,025,450 EMEA 2,400,057 1,157,304 Asia-Pacific 1,577,594 1,423,682 $ 7,251,399 $ 5,606,436 |
Revenue information on services basis | Revenue information on a services basis is as follows (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Colocation $ 680,541 $ 511,652 $ 1,963,103 $ 1,489,807 Interconnection 135,489 110,568 391,683 316,887 Managed infrastructure 52,986 22,327 149,697 69,648 Other 8,478 2,174 21,876 6,727 Recurring revenues 877,494 646,721 2,526,359 1,883,069 Non-recurring revenues 47,182 39,928 142,983 112,336 $ 924,676 $ 686,649 $ 2,669,342 $ 1,995,405 The following table presents the retrospective adjustments to the Company's revenue information on a services basis: Three months ended March 31, 2016 June 30, 2016 Colocation $ 619,893 $ 662,669 Interconnection 123,954 132,240 Managed infrastructure 47,987 48,724 Other 5,260 8,138 Recurring revenues 797,094 851,771 Non-recurring revenues 47,062 48,739 $ 844,156 $ 900,510 |
Basis of Presentation and Sig32
Basis of Presentation and Significant Accounting Policies (Detail) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Accounting Policies [Abstract] | ||
Effective income tax rate, continuing operations | 33.80% | 12.50% |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income from continuing operations | $ 48,769 | $ 41,132 | $ 50,744 | $ 177,043 |
Net income from discontinued operations, net of tax | 2,681 | 0 | 14,306 | 0 |
Net income | $ 51,450 | $ 41,132 | $ 65,050 | $ 177,043 |
Weighted-average shares used to calculate basic EPS | 71,190 | 57,082 | 69,689 | 56,894 |
Effect of dilutive securities: | ||||
Employee equity awards (in shares) | 718 | 626 | 700 | 627 |
Weighted-average shares used to calculate diluted EPS | 71,908 | 57,708 | 70,389 | 57,521 |
Basic EPS from continuing operations (in dollars per share) | $ 0.69 | $ 0.72 | $ 0.73 | $ 3.11 |
Basic EPS from discontinued operations (in dollars per share) | 0.04 | 0 | 0.21 | 0 |
Basic EPS (in dollars per share) | 0.73 | 0.72 | 0.94 | 3.11 |
Diluted EPS from continuing operations (in dollars per share) | 0.68 | 0.71 | 0.72 | 3.08 |
Diluted EPS from discontinued operations (in dollars per share) | 0.04 | 0 | 0.20 | 0 |
Diluted EPS (in dollars per share) | $ 0.72 | $ 0.71 | $ 0.92 | $ 3.08 |
Earnings Per Share - Anti-dilut
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 | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 15, 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 (in shares) | 22 | 2,171 | 1,210 | 2,073 | |
Common stock related to employee equity awards | |||||
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 (in shares) | 22 | 201 | 17 | 117 | |
4.75% convertible subordinated notes | |||||
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 (in shares) | 0 | 1,970 | 1,193 | 1,956 | |
Convertible debt interest rate | 4.75% | 4.75% | 4.75% | 4.75% | 4.75% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) ¥ / shares in Units, £ / shares in Units, € in Thousands, £ in Thousands, $ in Thousands | Aug. 01, 2016EUR (€) | Aug. 01, 2016USD ($) | Jan. 15, 2016GBP (£)£ / shares | Jan. 15, 2016USD ($) | Nov. 02, 2015USD ($) | Jan. 14, 2015USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016JPY (¥) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Nov. 02, 2015¥ / shares | Nov. 02, 2015USD ($) | May 29, 2015GBP (£) | May 29, 2015USD ($) |
Business Acquisition [Line Items] | ||||||||||||||||||||
Repayments of long-term capital lease obligations | $ 100,863 | $ 20,213 | ||||||||||||||||||
Loss on debt extinguishment | $ (9,894) | $ 0 | (10,499) | 0 | ||||||||||||||||
Revenue | 924,676 | $ 900,510 | $ 844,156 | 686,649 | 2,669,342 | 1,995,405 | ||||||||||||||
Net income | 51,450 | $ 41,132 | 65,050 | $ 177,043 | ||||||||||||||||
Goodwill | $ 3,118,686 | $ 1,063,200 | ||||||||||||||||||
Digital Realty | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Cash consideration for acquisition | € 193,292 | $ 215,869 | ||||||||||||||||||
Repayments of long-term capital lease obligations | 46,726 | 52,219 | ||||||||||||||||||
Loss on debt extinguishment | € (8,828) | (9,894) | ||||||||||||||||||
Acquisition costs | 10,962 | 10,600 | ||||||||||||||||||
Goodwill | $ 45,187 | |||||||||||||||||||
Telecity Group plc | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Acquisition costs | 50,484 | |||||||||||||||||||
Consideration transferred (GBP per share) | £ / shares | £ 5.725 | |||||||||||||||||||
Number of shares issued per share acquired | 0.0336 | 0.0336 | ||||||||||||||||||
Consideration transferred | £ 2,624,500 | $ 3,743,587 | ||||||||||||||||||
Vested employee equity awards assumed | 1,299 | |||||||||||||||||||
Cash placed in restricted account | £ 322,851 | $ 475,689 | ||||||||||||||||||
Business combination, provisional information, initial accounting incomplete, adjustment, intangibles | 46,529 | |||||||||||||||||||
Business combination, provisional information, initial accounting incomplete, adjustment, financial obligations | 37,449 | |||||||||||||||||||
Business combination, provisional information, initial accounting incomplete, adjustment, goodwill | (21,906) | |||||||||||||||||||
Business combination, provisional information, initial accounting incomplete, adjustment, assets held for sale | (46,598) | |||||||||||||||||||
Business combination, provisional information, initial accounting incomplete, adjustment, deferred tax liability | (21,048) | |||||||||||||||||||
Revenue | 107,316 | $ 299,001 | ||||||||||||||||||
Net income | (15,747) | $ (54,426) | ||||||||||||||||||
Goodwill | $ 2,216,173 | |||||||||||||||||||
Telecity Group plc | Customer relationships | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Discount rate (percent) | 8.50% | 8.50% | ||||||||||||||||||
Telecity Group plc | Trade names | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Discount rate (percent) | 9.00% | 9.00% | ||||||||||||||||||
Relief of royalty rate (percent) | 2.00% | 2.00% | ||||||||||||||||||
Bit-isle | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Cash consideration for acquisition | $ 275,367 | |||||||||||||||||||
Revenue | 39,745 | 111,243 | ||||||||||||||||||
Net income | $ (9,714) | $ (16,091) | ||||||||||||||||||
Percentage of outstanding shares including stock options | 97.00% | |||||||||||||||||||
Offer price (in jpy per share) | ¥ / shares | ¥ 922 | |||||||||||||||||||
Goodwill | $ 95,444 | |||||||||||||||||||
Bit-isle | Customer relationships | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Discount rate (percent) | 11.00% | |||||||||||||||||||
Bit-isle | Trade names | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Discount rate (percent) | 12.00% | |||||||||||||||||||
Relief of royalty rate (percent) | 2.00% | |||||||||||||||||||
Bit-isle | Bridge term loan | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Loans payable | ¥ 47,500,000,000 | $ 468,400 | ||||||||||||||||||
Nimbo Technologies Inc | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Cash consideration for acquisition | $ 10,000 | |||||||||||||||||||
Contingent earn out period (in years) | 2 years | |||||||||||||||||||
Goodwill | $ 17,192 | |||||||||||||||||||
Bridge term loan | Telecity Group plc | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Short-term debt | £ 875,000 | $ 1,289,000 |
Acquisitions - Preliminary Purc
Acquisitions - Preliminary Purchase Price Allocation (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Aug. 01, 2016 | Jan. 15, 2016 | Dec. 31, 2015 | Nov. 02, 2015 |
Business Acquisition [Line Items] | |||||
Assets held for sale | $ 96,923 | $ 33,257 | |||
Goodwill | 3,118,686 | 1,063,200 | |||
Liabilities held for sale | $ (14,660) | $ (3,535) | |||
Telecity Group plc | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 73,368 | ||||
Accounts receivable | 24,042 | ||||
Other current assets | 41,079 | ||||
Assets held for sale | 867,917 | ||||
Property, plant and equipment | 1,058,583 | ||||
Goodwill | 2,216,173 | ||||
Intangible assets | 704,014 | ||||
Deferred tax assets | 1,198 | ||||
Other assets | 4,124 | ||||
Total assets acquired | 4,990,498 | ||||
Accounts payable and accrued expenses | (90,589) | ||||
Accrued property, plant and equipment | (3,634) | ||||
Other current liabilities | (27,259) | ||||
Liabilities held for sale | (156,171) | ||||
Capital lease and other financing obligations | (162,359) | ||||
Mortgage and loans payable | (592,304) | ||||
Deferred tax liabilities | (177,715) | ||||
Other liabilities | (35,581) | ||||
Net assets acquired | $ 3,744,886 | ||||
Digital Realty | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 4,073 | ||||
Accounts receivable | 1,507 | ||||
Other current assets | 794 | ||||
Property, plant and equipment | 138,568 | ||||
Goodwill | 45,187 | ||||
Intangible assets | 11,758 | ||||
Other assets | 82 | ||||
Total assets acquired | 201,969 | ||||
Accounts payable and accrued expenses | (2,044) | ||||
Other current liabilities | (2,798) | ||||
Deferred tax liabilities | (32,687) | ||||
Other liabilities | (790) | ||||
Net assets acquired | $ 163,650 | ||||
Bit-isle | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 33,198 | ||||
Accounts receivable | 7,359 | ||||
Other current assets | 51,038 | ||||
Long-term investments | 3,806 | ||||
Property, plant and equipment | 308,985 | ||||
Goodwill | 95,444 | ||||
Intangible assets | 111,374 | ||||
Other assets | 22,981 | ||||
Total assets acquired | 634,185 | ||||
Accounts payable and accrued expenses | (15,028) | ||||
Accrued property, plant and equipment | (465) | ||||
Other current liabilities | (8,689) | ||||
Capital lease and other financing obligations | (108,833) | ||||
Mortgage and loans payable | (190,227) | ||||
Deferred tax liabilities | (32,192) | ||||
Other liabilities | (3,384) | ||||
Net assets acquired | $ 275,367 |
Acquisitions - Acquired Identif
Acquisitions - Acquired Identifiable Intangible Assets (Detail) - USD ($) $ in Thousands | Aug. 01, 2016 | Jan. 15, 2016 | Nov. 02, 2015 |
Telecity Group plc | Customer relationships | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 591,956 | ||
Estimated useful lives | 13 years 6 months | ||
Weighted-average estimated useful lives | 13 years 6 months | ||
Telecity Group plc | Trade names | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 72,033 | ||
Estimated useful lives | 1 year 6 months | ||
Weighted-average estimated useful lives | 1 year 6 months | ||
Telecity Group plc | Favorable leasehold interests | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 40,025 | ||
Weighted-average estimated useful lives | 19 years 2 months 12 days | ||
Telecity Group plc | Favorable leasehold interests | Minimum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 2 years | ||
Telecity Group plc | Favorable leasehold interests | Maximum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 25 years 5 months | ||
Digital Realty | In-place leases | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 7,485 | ||
Weighted-average estimated useful lives | 4 years 3 months 18 days | ||
Digital Realty | In-place leases | Minimum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 10 months 24 days | ||
Digital Realty | In-place leases | Maximum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 9 years 4 months 24 days | ||
Digital Realty | Favorable leasehold interests | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 4,273 | ||
Weighted-average estimated useful lives | 5 years 3 months 18 days | ||
Digital Realty | Favorable leasehold interests | Minimum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 1 year 10 months 24 days | ||
Digital Realty | Favorable leasehold interests | Maximum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 6 years 8 months 12 days | ||
Bit-isle | Customer relationships | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 105,434 | ||
Estimated useful lives | 13 years | ||
Weighted-average estimated useful lives | 13 years | ||
Bit-isle | Trade names | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 3,455 | ||
Estimated useful lives | 2 years | ||
Weighted-average estimated useful lives | 2 years | ||
Bit-isle | Favorable solar contracts | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 2,410 | ||
Estimated useful lives | 18 years | ||
Weighted-average estimated useful lives | 18 years | ||
Bit-isle | Other intangible assets | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 75 | ||
Estimated useful lives | 3 months | ||
Weighted-average estimated useful lives | 3 months |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma Combined Consolidated Statements of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Business Combinations [Abstract] | ||
Revenues | $ 819,423 | $ 2,387,117 |
Net income from continuing operations | $ 61,243 | $ 153,488 |
Basic EPS (in dollars per share) | $ 0.96 | $ 2.41 |
Diluted EPS (in dollars per share) | $ 0.95 | $ 2.38 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 29, 2016 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gains on asset sales | $ 27,945 | $ 0 | $ 33,187 | $ 0 | ||
Revenues | 48,782 | |||||
Impairment charges | 7,698 | 0 | 7,698 | 0 | ||
Disposal Group, Including Discontinued Operation, Unclassified Balance Sheet Disclosures [Abstract] | ||||||
Cash | 3,755 | 3,755 | $ 0 | |||
Accounts receivable | 784 | 784 | 2,222 | |||
Other current assets | 71,761 | 71,761 | $ 79,459 | 408 | ||
Property, plant and equipment | 17,819 | 17,819 | 23,533 | |||
Goodwill | 0 | 0 | 5,000 | |||
Intangible assets | 2,772 | 2,772 | 784 | |||
Other assets | 32 | 32 | 1,310 | |||
Total assets held for sale | 96,923 | 96,923 | 33,257 | |||
Accounts payable and accrued expenses | (11,567) | (11,567) | (654) | |||
Accrued property, plant and equipment | 0 | 0 | (816) | |||
Current portion of capital lease and other financing obligation | 0 | 0 | 0 | |||
Other current liabilities | (42) | (42) | (435) | |||
Capital lease and other financing obligations, less current portion | 0 | 0 | 0 | |||
Other liabilities | (3,051) | (3,051) | (1,630) | |||
Total liabilities held for sale | (14,660) | (14,660) | $ (3,535) | |||
Held-for-sale | London 2 data center in London, UK (LD2) | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gains on asset sales | 27,945 | |||||
Revenues | 4,654 | 6,116 | 14,082 | |||
Net income | 2,040 | 2,327 | 5,920 | |||
Held-for-sale | Bit-isle | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Net income | $ 0 | $ 0 | $ 0 | $ 0 |
Discontinued Operations (Detail
Discontinued Operations (Details) € in Thousands, £ in Thousands, $ in Thousands | Jul. 05, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Jul. 05, 2016EUR (€) | Jul. 05, 2016GBP (£) | Jul. 05, 2016USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale of discontinued operations, net of income taxes | $ 4,242 | $ 0 | ||||
Cash provided by (used in) operating activities, discontinued operations | 5,259 | |||||
Cash provided by (used in) investing activities, discontinued operations | $ 730,603 | |||||
Digital Realty | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Disposal group, including discontinued operation, consideration | € 304,564 | £ 376,171 | $ 827,314 | |||
Telecity Group plc | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale of discontinued operations, net of income taxes | $ 4,242 |
Discontinued Operations - Finan
Discontinued Operations - Financial Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Revenues | $ 48,782 | |||
Cost of revenues | 24,795 | |||
Sales and marketing | 1,030 | |||
General and administrative | 7,026 | |||
Total costs and operating expense | 32,851 | |||
Income from operations of 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 | $ 0 | ||
Income from discontinued operations, net of income taxes | $ 2,681 | $ 0 | $ 14,306 | $ 0 |
Derivatives and Hedging Activ42
Derivatives and Hedging Activities - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Derivative [Line Items] | |||||
Foreign currency translation adjustment (“CTA”) loss | $ (32,603,000) | $ (72,677,000) | $ (215,065,000) | $ (149,546,000) | |
Ineffective and excluded portions of cash flow hedges recognized in other income (expense) | 0 | 0 | 0 | 0 | |
Gains (losses) reclassified from accumulated other comprehensive income (loss) to revenues | 10,063,000 | 5,590,000 | 22,671,000 | 21,096,000 | |
Derivative instruments, loss reclassified from accumulated OCI into income, effective portion | 4,987,000 | 0 | 11,664,000 | 4,167,000 | |
Designated as hedging instruments | |||||
Derivative [Line Items] | |||||
Total principal amount of foreign currency loans designated as net investment hedges | 674,873,000 | 674,873,000 | $ 411,881,000 | ||
Foreign currency translation adjustment (“CTA”) loss | 5,542,000 | 4,426,000 | 44,426,000 | (5,963,000) | |
Not designated as hedging instruments | Embedded derivatives | |||||
Derivative [Line Items] | |||||
Net gains (losses) on embedded derivatives | 0 | 0 | 7,287,000 | 0 | |
Not designated as hedging instruments | Economic hedges of embedded derivatives | |||||
Derivative [Line Items] | |||||
Net gains (losses) on embedded derivatives | 0 | 0 | 5,266,000 | (2,019,000) | |
Not designated as hedging instruments | Foreign currency forward and option contracts | |||||
Derivative [Line Items] | |||||
Net gain (loss) in foreign currency forward and options contracts | 3,169,000 | $ 12,776,000 | 44,649,000 | $ 10,315,000 | |
Cash flow hedges | Unrealized gain on cash flow hedges | |||||
Derivative [Line Items] | |||||
Net gain to be reclassified within 12 months | $ 13,994 | $ 13,994 | $ 12,940 |
Derivatives and Hedging Activ43
Derivatives and Hedging Activities - Summary of Cash Flow Hedges (Detail) - Cash flow hedges - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value [Line Items] | ||
Notional amount, derivative assets | $ 388,269,000 | $ 367,330,000 |
Derivative liabilities | 167,706,000 | 47,447,000 |
Notional amount, total | 555,975,000 | 414,777,000 |
Fair value, derivative assets | 25,353,000 | 16,027,000 |
Fair value, derivative liabilities | (3,750,000) | (813,000) |
Fair value, total | 21,603,000 | 15,214,000 |
Unrealized gain on cash flow hedges | ||
Derivatives, Fair Value [Line Items] | ||
Fair value, derivative assets | 53,713,000 | 34,578,000 |
Fair value, derivative liabilities | (33,791,000) | (19,709,000) |
Fair value, total | 19,922,000 | 14,869,000 |
Net gain to be reclassified within 12 months | $ 13,994 | $ 12,940 |
Derivatives and Hedging Activ44
Derivatives and Hedging Activities - Schedule of Fair Value of Derivative Instruments Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | $ 29,304 | $ 68,900 |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative assets, net amounts | 29,304 | 68,900 |
Fair value of derivative assets, gross amounts not offset in the balance sheet | (6,023) | (44,902) |
Fair value of derivative assets, net | 23,281 | 23,998 |
Fair value of derivative liabilities, gross amounts | 10,280 | 79,925 |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative liabilities, net amounts | 10,280 | 79,925 |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | (6,023) | (44,902) |
Fair value of derivative liabilities, net | 4,257 | 35,023 |
Additional netting benefit | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative assets, gross amounts not offset in the balance sheet | (2,621) | (9,512) |
Fair value of derivative assets, net | (2,621) | (9,512) |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | (2,621) | (9,512) |
Fair value of derivative liabilities, net | (2,621) | (9,512) |
Designated as hedging instruments | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | 25,413 | |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative assets, net amounts | 25,413 | |
Fair value of derivative assets, gross amounts not offset in the balance sheet | (3,385) | |
Fair value of derivative assets, net | 22,028 | |
Fair value of derivative liabilities, gross amounts | 3,750 | |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative liabilities, net amounts | 3,750 | |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | (3,385) | |
Fair value of derivative liabilities, net | 365 | |
Designated as hedging instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Fair value of derivative liabilities, gross amounts | 813 | |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative liabilities, net amounts | 813 | |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | (813) | |
Designated as hedging instruments | Foreign currency forward contracts | Cash flow hedges | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | 25,353 | |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative assets, net amounts | 25,353 | |
Fair value of derivative assets, gross amounts not offset in the balance sheet | (3,385) | |
Fair value of derivative assets, net | 21,968 | |
Fair value of derivative liabilities, gross amounts | 3,750 | |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative liabilities, net amounts | 3,750 | |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | (3,385) | |
Fair value of derivative liabilities, net | 365 | |
Designated as hedging instruments | Foreign currency forward contracts | Net investment hedges | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | 60 | |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative assets, net amounts | 60 | |
Fair value of derivative assets, gross amounts not offset in the balance sheet | 0 | |
Fair value of derivative assets, net | 60 | |
Fair value of derivative liabilities, gross amounts | 0 | |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative liabilities, net amounts | 0 | |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | 0 | |
Fair value of derivative liabilities, net | 0 | |
Designated as hedging instruments | Foreign currency forward and option contracts | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | 16,027 | |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative assets, net amounts | 16,027 | |
Fair value of derivative assets, gross amounts not offset in the balance sheet | (813) | |
Fair value of derivative assets, net | 15,214 | |
Not designated as hedging instruments | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | 3,891 | 52,873 |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative assets, net amounts | 3,891 | 52,873 |
Fair value of derivative assets, gross amounts not offset in the balance sheet | (17) | (34,577) |
Fair value of derivative assets, net | 3,874 | 18,296 |
Fair value of derivative liabilities, gross amounts | 6,530 | 79,112 |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative liabilities, net amounts | 6,530 | 79,112 |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | (17) | (34,577) |
Fair value of derivative liabilities, net | 6,513 | 44,535 |
Not designated as hedging instruments | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | 43,203 | |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative assets, net amounts | 43,203 | |
Fair value of derivative assets, gross amounts not offset in the balance sheet | (34,577) | |
Fair value of derivative assets, net | 8,626 | |
Not designated as hedging instruments | Embedded derivatives | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | 3,587 | 8,926 |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative assets, net amounts | 3,587 | 8,926 |
Fair value of derivative assets, gross amounts not offset in the balance sheet | 0 | |
Fair value of derivative assets, net | 3,587 | 8,926 |
Fair value of derivative liabilities, gross amounts | 3,245 | 1,772 |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative liabilities, net amounts | 3,245 | 1,772 |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | 0 | |
Fair value of derivative liabilities, net | 3,245 | 1,772 |
Not designated as hedging instruments | Economic hedges of embedded derivatives | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | 234 | 744 |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative assets, net amounts | 234 | 744 |
Fair value of derivative assets, gross amounts not offset in the balance sheet | (17) | |
Fair value of derivative assets, net | 217 | 744 |
Fair value of derivative liabilities, gross amounts | 75 | 417 |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative liabilities, net amounts | 75 | 417 |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | (17) | |
Fair value of derivative liabilities, net | 58 | 417 |
Not designated as hedging instruments | Foreign currency forward and option contracts | ||
Derivative [Line Items] | ||
Fair value of derivative assets, gross amounts | 70 | |
Fair value of derivative assets, gross amounts offset in the balance sheet | 0 | |
Fair value of derivative assets, net amounts | 70 | |
Fair value of derivative assets, gross amounts not offset in the balance sheet | 0 | |
Fair value of derivative assets, net | 70 | |
Fair value of derivative liabilities, gross amounts | 3,210 | 76,923 |
Fair value of derivative liabilities, gross amounts offset in the balance sheet | 0 | 0 |
Fair value of derivative liabilities, net amounts | 3,210 | 76,923 |
Fair value of derivative liabilities, gross amounts not offset in the balance sheet | 0 | (34,577) |
Fair value of derivative liabilities, net | $ 3,210 | $ 42,346 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Derivative instruments | $ 29,304 | $ 68,900 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative liabilities | 10,280 | 79,925 |
Fair value, measurements, recurring | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Cash and cash equivalents | 451,258 | 1,139,554 |
Derivative instruments | 29,304 | 68,900 |
Total financial assets | 1,032,698 | 2,315,197 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative liabilities | 10,280 | 79,925 |
Fair value, measurements, recurring | Money market and deposit accounts | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Financial assets | 533,496 | 1,089,284 |
Fair value, measurements, recurring | Publicly traded equity securities | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Financial assets | 8,254 | 3,353 |
Fair value, measurements, recurring | Certificates of deposit | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Financial assets | 10,386 | 14,106 |
Fair value, measurements, recurring | Level 1 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Cash and cash equivalents | 451,258 | 1,139,554 |
Derivative instruments | 0 | 0 |
Total financial assets | 993,008 | 2,232,191 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative liabilities | 0 | 0 |
Fair value, measurements, recurring | Level 1 | Money market and deposit accounts | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Financial assets | 533,496 | 1,089,284 |
Fair value, measurements, recurring | Level 1 | Publicly traded equity securities | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Financial assets | 8,254 | 3,353 |
Fair value, measurements, recurring | Level 1 | Certificates of deposit | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Financial assets | 0 | 0 |
Fair value, measurements, recurring | Level 2 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Derivative instruments | 29,304 | 68,900 |
Total financial assets | 39,690 | 83,006 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative liabilities | 10,280 | 79,925 |
Fair value, measurements, recurring | Level 2 | Money market and deposit accounts | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Financial assets | 0 | 0 |
Fair value, measurements, recurring | Level 2 | Publicly traded equity securities | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Financial assets | 0 | 0 |
Fair value, measurements, recurring | Level 2 | Certificates of deposit | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Financial assets | $ 10,386 | $ 14,106 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Jul. 18, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Related Party Transactions [Abstract] | |||||
Revenue, related parties | $ 3,514 | $ 2,240 | $ 9,249 | $ 6,419 | |
Costs and services, related parties | 2,732 | 1,246 | 9,012 | 2,319 | |
Accounts receivable, related parties, current | 1,437 | 873 | 1,437 | 873 | |
Accounts payable, related parties, current | $ 1,108 | $ 0 | $ 1,108 | $ 0 | |
Land and building | Prologis, L.P. | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, purchases from related party | $ 6,300 |
Leases - Additional Information
Leases - Additional Information (Detail) - 9 months ended Sep. 30, 2016 - Equipment - TY5 Tokyo ¥ in Thousands, $ in Thousands | JPY (¥) | USD ($) |
Capital Leased Assets [Line Items] | ||
Effective interest rate | 6.33% | |
Capital lease obligation | ¥ 3,074,947 | $ 30,319 |
Leases - Summary of Capital Lea
Leases - Summary of Capital Lease and Other Financing Obligations (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Capital lease obligations | ||
Current portion of capital lease and other financing obligations | $ (92,120) | $ (40,121) |
Capital lease and other financing obligations, less current portion | 1,446,455 | $ 1,287,139 |
Capital lease obligations | ||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2016 (3 months remaining) | 20,611 | |
2,017 | 82,812 | |
2,018 | 82,957 | |
2,019 | 83,700 | |
2,020 | 83,710 | |
Thereafter | 918,792 | |
Total minimum lease payments | 1,272,582 | |
Plus amount representing residual property value | 0 | |
Less amount representing interest | (566,825) | |
Present value of net minimum lease payments | 705,757 | |
Capital lease obligations | ||
Current portion of capital lease and other financing obligations | (26,643) | |
Capital lease and other financing obligations, less current portion | 679,114 | |
Other financing obligations (1) | ||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2016 (3 months remaining) | 20,229 | |
2,017 | 80,150 | |
2,018 | 76,065 | |
2,019 | 70,625 | |
2,020 | 69,529 | |
Thereafter | 764,347 | |
Total minimum lease payments | 1,080,945 | |
Plus amount representing residual property value | 517,957 | |
Less amount representing interest | (766,084) | |
Present value of net minimum lease payments | 832,818 | |
Capital lease obligations | ||
Current portion of capital lease and other financing obligations | (65,477) | |
Capital lease and other financing obligations, less current portion | 767,341 | |
Capital Lease and Other Financing Obligations Total | ||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2016 (3 months remaining) | 40,840 | |
2,017 | 162,962 | |
2,018 | 159,022 | |
2,019 | 154,325 | |
2,020 | 153,239 | |
Thereafter | 1,683,139 | |
Total minimum lease payments | 2,353,527 | |
Plus amount representing residual property value | 517,957 | |
Less amount representing interest | (1,332,909) | |
Present value of net minimum lease payments | 1,538,575 | |
Capital lease obligations | ||
Current portion of capital lease and other financing obligations | (92,120) | |
Capital lease and other financing obligations, less current portion | $ 1,446,455 |
Debt Facilities - Summary of Lo
Debt Facilities - Summary of Loans Payable and Senior Notes (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Mortgage and loans payable, gross | $ 1,589,414 | $ 1,243,699 |
Less amount representing debt discount and debt issuance cost | (14,015) | (2,681) |
Plus amount representing mortgage premium | 2,004 | 1,987 |
Mortgage and loans payable, net | 1,577,403 | 1,243,005 |
Less current portion | (518,985) | (770,236) |
Mortgage and loans payable noncurrent portion | 1,058,418 | 472,769 |
Term loans | ||
Debt Instrument [Line Items] | ||
Mortgage and loans payable, gross | 1,069,965 | 456,740 |
Bridge term loan | ||
Debt Instrument [Line Items] | ||
Mortgage and loans payable, gross | 468,350 | 386,547 |
Revolving credit facility borrowings | ||
Debt Instrument [Line Items] | ||
Mortgage and loans payable, gross | 0 | 325,622 |
Term loan facility, Brazil financings | ||
Debt Instrument [Line Items] | ||
Mortgage and loans payable, gross | 1,585 | 27,113 |
Mortgage payable and other loans payable | ||
Debt Instrument [Line Items] | ||
Mortgage and loans payable, gross | $ 49,514 | $ 47,677 |
Debt Facilities - Additional In
Debt Facilities - Additional Information (Detail) | Jan. 08, 2016GBP (£) | Jan. 08, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2016BRL | Feb. 29, 2016JPY (¥) | Feb. 29, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016JPY (¥) | Sep. 30, 2016GBP (£) | Sep. 30, 2016USD ($) | Jan. 08, 2016USD ($) | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||||||||
Repayment of debt | $ 986,465,000 | $ 529,447,000 | ||||||||||||
Long-term debt, gross | $ 1,589,414,000 | $ 1,243,699,000 | ||||||||||||
Bridge term loan | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Long-term debt, gross | 468,350,000 | 386,547,000 | ||||||||||||
Proceeds from line of credit | ¥ 1,040,000,000 | $ 10,254,000 | ||||||||||||
Term loans | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Term of debt | 7 years | 7 years | ||||||||||||
Long-term debt, gross | 1,069,965,000 | 456,740,000 | ||||||||||||
Term loans | Brazil financings | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayment of debt | $ 28,298,000 | BRL 90,652,000 | ||||||||||||
Term loans | USD Term B loan facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Term of debt | 7 years | 7 years | ||||||||||||
Quarterly payment amount | $ 625,000 | |||||||||||||
Balloon payment due at end of term | $ 233,125,000 | |||||||||||||
Long-term debt, gross | 248,750,000 | |||||||||||||
Proceeds from notes payable | $ 250,000,000 | |||||||||||||
Notes payable | $ 250,000,000 | |||||||||||||
Interest rate | 4.00% | 4.00% | ||||||||||||
Term loans | Sterling Term B loan commitment | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Term of debt | 7 years | 7 years | ||||||||||||
Quarterly payment amount | £ | £ 750,000 | |||||||||||||
Balloon payment due at end of term | £ | 279,750,000 | |||||||||||||
Long-term debt, gross | £ | £ 298,500,000 | |||||||||||||
Proceeds from notes payable | £ | 300,000,000 | |||||||||||||
Notes payable | £ | £ 300,000,000 | |||||||||||||
Interest rate | 4.50% | 4.50% | ||||||||||||
Term loans | USD Term B loan facility and Sterling Term B loan commitment | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Long-term debt, gross | 635,964,000 | |||||||||||||
Revolving credit facility borrowings | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayment of debt | $ 325,622,000 | |||||||||||||
Long-term debt, gross | 0 | $ 325,622,000 | ||||||||||||
BTMU loan facility | Bridge term loan | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Term of debt | 5 years | |||||||||||||
BTMU loan facility | Term loans | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, face amount | ¥ 47,500,000,000 | 468,350,000 | ||||||||||||
Quarterly payment amount | $ 625,000,000 | |||||||||||||
Balloon payment due at end of term | 35,625,000,000 | |||||||||||||
Loans payable | $ 0 | |||||||||||||
BTMU loan facility | Tokyo Interbank Offered Rate | Term loans | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% |
Debt Facilities - Convertible D
Debt Facilities - Convertible Debt (Detail) - USD ($) | Jun. 15, 2016 | Jun. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,589,414,000 | $ 1,243,699,000 | |||
Less amount representing debt discount and debt issuance cost | (14,015,000) | (2,681,000) | |||
Long-term debt, net | 5,441,418,000 | ||||
Convertible debt | 0 | 146,121,000 | |||
Additional paid-in capital | $ 7,371,024,000 | 4,838,444,000 | |||
4.75% convertible subordinated notes | |||||
Debt Instrument [Line Items] | |||||
Convertible debt interest rate | 4.75% | 4.75% | 4.75% | ||
Convertible debt | $ 150,082,000 | ||||
Debt conversion, converted instrument, shares issued | 1,981,662 | ||||
Cash | $ 3,619,000 | ||||
Capped call premium | $ 49,664,000 | ||||
Additional paid-in capital | $ 141,688,000 | ||||
Conversion price per share (in dollars per share) | $ 372.10 | ||||
Convertible subordinated debt | 4.75% convertible subordinated notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 0 | 150,082,000 | |||
Less amount representing debt discount and debt issuance cost | 0 | (3,961,000) | |||
Long-term debt, net | $ 0 | $ 146,121,000 | |||
Convertible debt interest rate | 4.75% | 4.75% | |||
Common stock | 4.75% convertible subordinated notes | |||||
Debt Instrument [Line Items] | |||||
Debt conversion, converted instrument, shares issued | 380,779 |
Debt Facilities - Summary of Se
Debt Facilities - Summary of Senior Notes (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,589,414 | $ 1,243,699 |
Long-term debt, net | 5,441,418 | |
Senior notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 3,850,000 | 3,850,000 |
Less amount representing debt issuance cost | (40,668) | (45,366) |
Long-term debt, net | 3,809,332 | 3,804,634 |
Senior notes | 5.375% senior notes due 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,000,000 | 1,000,000 |
Senior notes stated percentage | 5.375% | |
Senior notes | 5.375% senior notes due 2022 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 750,000 | 750,000 |
Senior notes stated percentage | 5.375% | |
Senior notes | 4.875% senior notes due 2020 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 500,000 | 500,000 |
Senior notes stated percentage | 4.875% | |
Senior notes | 5.75% senior notes due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 500,000 | 500,000 |
Senior notes stated percentage | 5.75% | |
Senior notes | 5.875% senior notes due 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,100,000 | $ 1,100,000 |
Senior notes stated percentage | 5.875% |
Debt Facilities - Summary of Ma
Debt Facilities - Summary of Maturities of Debt Facilities (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Maturities of Long-term Debt [Abstract] | |
2016 (3 months remaining) | $ 481,048 |
2,017 | 50,851 |
2,018 | 50,945 |
2,019 | 353,211 |
2,020 | 510,024 |
Thereafter | 3,995,339 |
Long-term debt, net | $ 5,441,418 |
Debt Facilities - Fair Value of
Debt Facilities - Fair Value of Debt Facilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Mortgage and loans payable | $ 1,589,087 | $ 916,602 |
Convertible debt | 0 | 151,997 |
Senior notes | 4,088,117 | 3,954,000 |
Revolving credit line | $ 0 | $ 325,617 |
Debt Facilities - Interest Char
Debt Facilities - Interest Charges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Debt Disclosure [Abstract] | ||||
Interest expense | $ 92,200 | $ 76,269 | $ 293,395 | $ 219,556 |
Interest capitalized | 3,234 | 1,831 | 9,479 | 8,677 |
Interest charges incurred | $ 95,434 | $ 78,100 | $ 302,874 | $ 228,233 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Capital expenditures | |
Other Commitments [Line Items] | |
Purchase commitments | $ 474,579 |
Miscellaneous purchase commitments | |
Other Commitments [Line Items] | |
Purchase commitments | $ 343,981 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
December 31, 2015 | $ (509,059) | |||
Net change | $ (69,983) | $ (64,839) | (204,710) | $ (155,569) |
September 30, 2016 | (713,769) | (713,769) | ||
Foreign currency translation adjustment (“CTA”) loss | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
December 31, 2015 | (523,709) | |||
Net change | (215,065) | |||
September 30, 2016 | (738,774) | (738,774) | ||
Unrealized gain on cash flow hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
December 31, 2015 | 11,153 | |||
Net change | 3,789 | |||
September 30, 2016 | 14,942 | 14,942 | ||
Unrealized gain (loss) on available-for-sale securities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
December 31, 2015 | (139) | |||
Net change | 2,382 | |||
September 30, 2016 | 2,243 | 2,243 | ||
Net investment hedge CTA gain | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
December 31, 2015 | 4,484 | |||
Net change | 4,163 | |||
September 30, 2016 | 8,647 | 8,647 | ||
Net actuarial gain (loss) on defined benefit plans | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
December 31, 2015 | (848) | |||
Net change | 21 | |||
September 30, 2016 | $ (827) | $ (827) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Sep. 14, 2016 | Aug. 03, 2016 | Jun. 15, 2016 | May 04, 2016 | Mar. 23, 2016 | Feb. 18, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Quarterly cash dividend declared (in dollars per share) | $ 1.75 | $ 1.75 | $ 1.75 | ||||||
Total cash dividend paid | $ 124,465 | $ 121,530 | $ 121,494 | ||||||
Restricted stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Dividends payable | $ 2,498 | $ 2,053 | $ 1,366 | ||||||
Shares issued in period | 530,068 | ||||||||
Weighted-average grant date fair value of shares issued (in dollars per share) | $ 290.89 | ||||||||
Weighted average requisite service period of shares issued | 3 years 5 months 19 days |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation Expense Recognized in Company's Condensed Consolidated Statement of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 42,473 | $ 33,969 | $ 116,311 | $ 98,575 |
Cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 3,316 | 2,514 | 9,754 | 7,371 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 11,702 | 9,173 | 32,187 | 27,806 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 27,455 | $ 22,282 | $ 74,370 | $ 63,398 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Schedule
Segment Information - Schedule of Adjusted EBITDA (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | $ 420,042 | $ 321,472 | $ 1,220,983 | $ 938,482 |
Depreciation, amortization and accretion expense | (215,370) | (133,268) | (631,242) | (384,068) |
Stock-based compensation expense | (42,473) | (33,969) | (116,311) | (98,575) |
Acquisition costs | (12,505) | (13,352) | (64,635) | (24,374) |
Impairment charges | (7,698) | 0 | (7,698) | 0 |
Gains on asset sales | 27,945 | 0 | 33,187 | 0 |
Income from continuing operations | 169,941 | 140,883 | 434,284 | 431,465 |
Americas | ||||
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | 202,131 | 174,170 | 581,619 | 517,790 |
EMEA | ||||
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | 121,468 | 81,403 | 366,412 | 236,967 |
Asia-Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Total adjusted EBITDA | $ 96,443 | $ 65,899 | $ 272,952 | $ 183,725 |
Segment Information - Segment D
Segment Information - Segment Disclosures (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||||
Total revenues: | $ 924,676 | $ 900,510 | $ 844,156 | $ 686,649 | $ 2,669,342 | $ 1,995,405 |
Total depreciation and amortization: | 214,825 | 132,403 | 627,410 | 381,415 | ||
Capital expenditures: | 279,477 | 216,046 | 727,044 | 587,508 | ||
Americas | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues: | 425,142 | 382,630 | 1,243,007 | 1,118,046 | ||
Total depreciation and amortization: | 81,724 | 69,721 | 236,385 | 205,674 | ||
Capital expenditures: | 147,328 | 105,250 | 346,817 | 292,376 | ||
EMEA | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues: | 301,250 | 177,563 | 869,715 | 516,153 | ||
Total depreciation and amortization: | 79,292 | 32,851 | 237,846 | 86,991 | ||
Capital expenditures: | 79,585 | 39,816 | 223,440 | 124,299 | ||
Asia-Pacific | ||||||
Segment Reporting Information [Line Items] | ||||||
Total revenues: | 198,284 | 126,456 | 556,620 | 361,206 | ||
Total depreciation and amortization: | 53,809 | 29,831 | 153,179 | 88,750 | ||
Capital expenditures: | $ 52,564 | $ 70,980 | $ 156,787 | $ 170,833 |
Segment Information - Long-Live
Segment Information - Long-Lived Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Company's long-lived assets | $ 7,251,399 | $ 5,606,436 |
Americas | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Company's long-lived assets | 3,273,748 | 3,025,450 |
EMEA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Company's long-lived assets | 2,400,057 | 1,157,304 |
Asia-Pacific | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Company's long-lived assets | $ 1,577,594 | $ 1,423,682 |
Segment Information - Revenue I
Segment Information - Revenue Information on Services Basis (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue from External Customer [Line Items] | ||||||
Revenue | $ 924,676 | $ 900,510 | $ 844,156 | $ 686,649 | $ 2,669,342 | $ 1,995,405 |
Recurring revenues | ||||||
Revenue from External Customer [Line Items] | ||||||
Revenue | 877,494 | 851,771 | 797,094 | 646,721 | 2,526,359 | 1,883,069 |
Recurring revenues | Colocation | ||||||
Revenue from External Customer [Line Items] | ||||||
Revenue | 680,541 | 662,669 | 619,893 | 511,652 | 1,963,103 | 1,489,807 |
Recurring revenues | Interconnection | ||||||
Revenue from External Customer [Line Items] | ||||||
Revenue | 135,489 | 132,240 | 123,954 | 110,568 | 391,683 | 316,887 |
Recurring revenues | Managed infrastructure | ||||||
Revenue from External Customer [Line Items] | ||||||
Revenue | 52,986 | 48,724 | 47,987 | 22,327 | 149,697 | 69,648 |
Recurring revenues | Other | ||||||
Revenue from External Customer [Line Items] | ||||||
Revenue | 8,478 | 8,138 | 5,260 | 2,174 | 21,876 | 6,727 |
Non-recurring revenues | ||||||
Revenue from External Customer [Line Items] | ||||||
Revenue | $ 47,182 | $ 48,739 | $ 47,062 | $ 39,928 | $ 142,983 | $ 112,336 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) $ / shares in Units, ¥ in Thousands, $ in Thousands | Nov. 02, 2016$ / shares | Aug. 03, 2016$ / shares | May 04, 2016$ / shares | Feb. 18, 2016$ / shares | Mar. 31, 2017JPY (¥) | Nov. 30, 2016JPY (¥) | Oct. 31, 2016JPY (¥) | Oct. 31, 2016USD ($) | Mar. 31, 2017JPY (¥) | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) |
Subsequent Event [Line Items] | ||||||||||||
Proceeds from sale of assets, net of cash transferred | $ | $ 828,197 | $ 0 | ||||||||||
Quarterly cash dividend declared (in dollars per share) | $ 1.75 | $ 1.75 | $ 1.75 | |||||||||
Subsequent event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Quarterly cash dividend declared (in dollars per share) | $ 1.75 | |||||||||||
Bit-isle | Solar power assets | Scenario, forecast | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Proceeds from sale of assets, net of cash transferred | ¥ 5,313,384 | ¥ 2,500,000 | ¥ 7,813,384 | $ 74,540 | ||||||||
Bit-isle | Subsequent event | Solar power assets | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Proceeds from sale of assets, net of cash transferred | ¥ 400,000 | $ 3,816 | ||||||||||
Bit-isle | Loans payable | Subsequent event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Proceeds from issuance of long-term debt | ¥ 47,500,000 | $ 453,150 |