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SEC Filings

10-Q
EQUINIX INC filed this Form 10-Q on 05/03/2019
Entire Document
 
EQUINIX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

The effect of net investment hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three months ended March 31, 2019 and 2018 was as follows (in thousands):
Amount of gain or (loss) recognized in accumulated other comprehensive income:
 
 
 
Three Months Ended
March 31,
 
 
 
2019
 
2018
Foreign currency debt
 
$
63,914

 
$
(74,272
)
Cross-currency interest rate swaps (included component) (1)
 
15,515

 

Cross-currency interest rate swaps (excluded component) (2)
 
(2,590
)
 

Total
 
$
76,839

 
$
(74,272
)
 
 
 
 
 
 
Amount of gain or (loss) recognized in earnings:
 
 
 
Three Months Ended
March 31,
 
Location of gain or (loss)
 
2019
 
2018
Cross-currency interest rate swaps (excluded component) (2)
Interest expense
 
$
4,163

 
$

Total
 
 
$
4,163

 
$


(1) 
Included component represents foreign exchange spot rates.
(2) 
Excluded component represents cross-currency basis spread and interest rates.
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. The foreign currency forward contracts that the Company uses to hedge this exposure are designated as cash flow hedges. As of March 31, 2019 and December 31, 2018, the total notional amounts of these foreign exchange contracts were $874.4 million and $760.9 million, respectively.
The Company enters into intercompany hedging instruments ("intercompany derivatives") with wholly-owned subsidiaries 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 effect of cash flow hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three months ended March 31, 2019 and 2018 was as follows (in thousands):
Amount of gain or (loss) recognized in accumulated other comprehensive income:
 
 
 
Three Months Ended
March 31,
 
 
 
2019
 
2018
Foreign currency forward contracts
 
$
10,965

 
$
(5,441
)
 
 
 
 
 
 
Amount of gain or (loss) reclassified from accumulated other comprehensive income to income:
 
 
 
Three Months Ended
March 31,
 
Location of gain or (loss)
 
2019
 
2018
Foreign currency forward contracts
Revenues
 
$
9,861

 
$
(18,415
)
Foreign currency forward contracts
Cost of revenues
 
(5,329
)
 
9,323

Total
 
 
$
4,532

 
$
(9,092
)

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