logo     Print Page | Close Window

SEC Filings

10-Q
EQUINIX INC filed this Form 10-Q on 11/02/2018
Entire Document
 
EQUINIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

The Company recorded pre-tax net foreign exchange gains of $27.2 million and $179.0 million in other comprehensive income (loss) for the three and nine months ended September 30, 2018, respectively, and pre-tax net foreign exchange losses of $60.7 million and $191.1 million in other comprehensive income (loss) for the three and nine months ended September 30, 2017, respectively. The Company recorded no ineffectiveness from its net investment hedges for the three and nine months ended September 30, 2018 and 2017.
Cash Flow Hedges. The Company hedges its foreign currency translation exposure for forecasted revenues and expenses in its EMEA region between the U.S. dollar and the British Pound, Euro, Swedish Krona and Swiss Franc. From time to time, 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 enters into intercompany hedging instruments ("intercompany derivatives") with a wholly-owned subsidiary of the Company in order to hedge certain forecasted revenues and expenses denominated in currencies other than the U.S. dollar. Simultaneously, the Company enters into derivative contracts with unrelated third parties to externally hedge the net exposure created by such intercompany derivatives.
The following disclosure is prepared on a consolidated basis. Assets and liabilities resulting from intercompany derivatives have been eliminated in consolidation. As of September 30, 2018, the Company's cash flow hedge instruments had maturity dates ranging from October 2018 to September 2020 as follows (in thousands):
 
Notional
Amount
 
Fair Value (1)
 
Accumulated Other
Comprehensive
Income (Loss) (2) (3)
Derivative assets
$
626,012

 
$
29,965

 
$
23,770

Derivative liabilities
135,194

 
(3,549
)
 
(6,190
)
Total
$
761,206

 
$
26,416

 
$
17,580

 
(1) 
All derivatives related to cash flow hedges are included in the condensed consolidated balance sheets within other current assets, other assets, other current liabilities and other liabilities.
(2) 
Included in the condensed consolidated balance sheets within accumulated other comprehensive income (loss).
(3) 
The Company recorded a net gain of $11.0 million within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to revenues and expenses as they mature in the next 12 months.
As of December 31, 2017, the Company's cash flow hedge instruments had maturity dates ranging from January 2018 to October 2019 as follows (in thousands):
 
Notional
Amount
 
Fair Value (1)
 
Accumulated Other
Comprehensive
Income (Loss) (2) (3)
Derivative assets
$
72,262

 
$
2,379

 
$
2,055

Derivative liabilities
440,637

 
(29,777
)
 
(34,311
)
Total
$
512,899

 
$
(27,398
)
 
$
(32,256
)
 
(1) 
All derivatives related to cash flow hedges are included in the condensed consolidated balance sheets within other current assets, other assets, other current liabilities and other liabilities.
(2) 
Included in the condensed consolidated balance sheets within accumulated other comprehensive income (loss).
(3) 
The Company recorded a net loss of $26.7 million within accumulated other comprehensive income (loss) relating to cash flow hedges that will be reclassified to revenues and expenses as they mature over the next 12 months.
During the three months ended September 30, 2018, the amount of net gains from the ineffective and excluded portions of cash flow hedges recognized in other income (expense) was $3.9 million. During the three months ended September 30, 2017, the ineffective and excluded portions of cash flow hedges recognized in other income (expense) were not significant. During the three months ended September 30, 2018, the amount of net losses reclassified from accumulated other comprehensive income (loss) to revenues was $3.3 million and the amount of net gains reclassified from accumulated other comprehensive income (loss) to operating expenses was not significant. During the three months ended September 30, 2017, the amount of net losses reclassified from accumulated other comprehensive income (loss) to revenues and the amount of net gains reclassified from accumulated other comprehensive income (loss) to operating expenses were not significant.

21