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Summary of Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2019
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies a. Principles of Consolidation The accompanying financial statements reflect our financial position, results of operations, comprehensive income (loss), equity and cash flows on a consolidated basis. All intercompany transactions and account balances have been eliminated. b. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an ongoing basis, we evaluate the estimates used. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. Actual results may differ from these estimates. c. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash on hand and cash invested in highly liquid short-term securities, which have remaining maturities at the date of purchase of less than 90 days. Cash and cash equivalents are carried at cost, which approximates fair value. At December 31, 2019 and 2018, we had $4,865 and $15,141, respectively, of restricted cash held by certain financial institutions related to bank guarantees. d. Foreign Currency Local currencies are the functional currencies for our operations outside the United States, with the exception of certain foreign holding companies, whose functional currency is the United States dollar. In those instances where the local currency is the functional currency, assets and liabilities are translated at period-end exchange rates, and revenues and expenses are translated at average exchange rates for the applicable period. Resulting translation adjustments are reflected in the accumulated other comprehensive, net component of Iron Mountain Incorporated Stockholders' Equity. See Note 2.t. e. Derivative Instruments and Hedging Activities Every derivative instrument is required to be recorded in the balance sheet as either an asset or a liability measured at its fair value. Periodically, we acquire derivative instruments that are intended to hedge either cash flows or values that are subject to foreign exchange or other market price risk and not for trading purposes. We have formally documented our hedging relationships, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking each hedge transaction. Given the recurring nature of our revenues and the long-term nature of our asset base, we have the ability and the preference to use long-term, fixed interest rate debt to finance our business, thereby preserving our long-term returns on invested capital. We target approximately 75% of our debt portfolio to be fixed with respect to interest rates. Occasionally, we may use interest rate swaps as a tool to maintain our targeted level of fixed rate debt. In addition, we may use borrowings in foreign currencies, either obtained in the United States or by our foreign subsidiaries, to hedge foreign currency risk associated with our international investments. Sometimes we enter into currency swaps to temporarily hedge an overseas investment, such as a major acquisition, while we arrange permanent financing or to hedge our exposure due to foreign currency exchange movements related to our intercompany accounts with and between our foreign subsidiaries. As of December 31, 2019 and 2018, none of our derivative instruments contained credit-risk related contingent features. See Note 3. f. Property, Plant and Equipment Property, plant and equipment are stated at cost and depreciated using the straight-line method with the following useful lives (in years):
| Range
Buildings and building improvements | 5 to 40
Leasehold improvements | 5 to 10 or life of the lease (whichever is shorter)
Racking | 1 to 20 or life of the lease (whichever is shorter)
Warehouse equipment/vehicles | 1 to 10
Furniture and fixtures | 1 to 10
Computer hardware and software | 2 to 5
Property, plant and equipment (including financing leases in the respective category), at cost, consist of the following:
| December 31,
| 2019 |  | 2018
Land | $ | 448,566 |  |  | $ | 400,980 |
Buildings and building improvements | 3,029,309 |  |  | 2,991,307 |
Leasehold improvements | 852,022 |  |  | 770,666 |
Racking | 2,040,832 |  |  | 2,001,831 |
Warehouse equipment/vehicles | 483,218 |  |  | 481,515 |
Furniture and fixtures | 54,275 |  |  | 56,207 |
Computer hardware and software | 689,261 |  |  | 680,283 |
Construction in progress | 451,423 |  |  | 218,160 |
| $ | 8,048,906 |  |  | $ | 7,600,949 |
Minor maintenance costs are expensed as incurred. Major improvements which extend the life, increase the capacity or improve the safety or the efficiency of property owned are capitalized and depreciated. Major improvements to leased buildings are capitalized as leasehold improvements and depreciated. We capitalize interest expense during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is amortized over the useful lives of the assets. During the years ended December 31, 2019 and 2018, we capitalized interest of $15,980 and $3,732, respectively. The amount of capitalized interest during the year ended December 31, 2017 was insignificant. We develop various software applications for internal use. Computer software costs associated with internal use software are expensed as incurred until certain capitalization criteria are met. Third party consulting costs, as well as payroll and related costs for employees directly associated with, and devoting time to, the development of internal use computer software projects (to the extent time is spent directly on the project) are capitalized. During the years ended December 31, 2019, 2018 and 2017, we capitalized $34,650, $29,407 and $25,166 of costs, respectively, associated with the development of internal use computer software projects. Capitalization begins when the design stage of the application has been completed and it is probable that the project will be completed and used to perform the function intended. Capitalization ends when the asset is ready for its intended use. Depreciation begins when the software is placed in service. Computer software costs that are capitalized are periodically evaluated for impairment. Entities are required to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. Asset retirement obligations represent the costs to replace or remove tangible long-lived assets required by law, regulatory rule or contractual agreement. Our asset retirement obligations are primarily the result of requirements under our facility lease agreements which generally have "return to original condition" clauses which would require us to remove or restore items such as shred pits, vaults, demising walls and office build-outs, among others. The significant assumptions used in estimating our aggregate asset retirement obligations are the timing of removals, the probability of a requirement to perform, estimated cost and associated expected inflation rates that are consistent with historical rates and credit-adjusted risk-free rates that approximate our incremental borrowing rate. Our asset retirement obligations at December 31, 2019 and 2018 were $30,831 and $28,256, respectively. g. Long-Lived Assets We review long-lived assets, including all finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the sum of the forecasted undiscounted net cash flows of the operation to which the assets relate to their carrying amount. The operations are generally distinguished by the business segment and geographic region in which they operate. If it is determined that we are unable to recover the carrying amount of the assets, the long-lived assets are written down, on a pro rata basis, to fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets. Long-lived assets, including finite-lived intangible assets, are amortized over their useful lives. Annually, or more frequently if events or circumstances warrant, we assess whether a change in the lives over which long-lived assets, including finite-lived intangible assets, are amortized is necessary. Consolidated gain on disposal/write-down of property, plant and equipment, net, for the year ended December 31, 2019 was $63,824. The gain consisted primarily of gains associated with (i) sale and sale-leaseback transactions involving the sales of facilities in the United States of approximately $67,800 and (ii) the sale of certain land and buildings in the United Kingdom of approximately $36,000. These gains were partially offset by losses primarily associated with (i) the impairment charge on the assets associated with the select offerings within our Iron Cloud portfolio (as defined and described below) and (ii) the write-down of certain property, plant and equipment in the United States of approximately $15,700. During the second quarter of 2019, we began exploring strategic options regarding how to maintain and support the infrastructure of select offerings within our Iron Mountain Iron Cloud (“Iron Cloud”) portfolio. As a result, during the second quarter of 2019, we performed a long-lived asset impairment analysis on the assets associated with these select offerings and concluded that the associated carrying value of the long-lived assets (which consisted entirely of property, plant and equipment) was not recoverable based upon the underlying cash flows associated with these select offerings. On September 30, 2019, we entered into an agreement (the “Iron Cloud Outsourcing Agreement”) with a wholesale provider of data infrastructure and data management services to outsource the operation, infrastructure management and maintenance and delivery of select offerings within our Iron Cloud portfolio. In conjunction with the entry into the Iron Cloud Outsourcing Agreement, we also sold certain IT infrastructure assets and the rights to certain hardware and software maintenance contracts used to deliver these Iron Cloud offerings. As a result of our long-lived asset impairment analysis and sale of certain IT infrastructure assets and rights to certain hardware and software maintenance contracts, we recognized an impairment charge and a loss on sale of the assets totaling approximately $25,000 during the year ended December 31, 2019. Consolidated gain on disposal/write-down of property, plant and equipment, net for the year ended December 31, 2018 was $73,622. The gain consisted primarily of (i) the gain on sale of real estate for the sale of buildings in the United Kingdom of approximately $63,800 and (ii) gains associated with the involuntary conversion of assets included in a facility that we own in Argentina which was partially destroyed in a fire in 2014, for which we received insurance proceeds in excess of the carrying amount of such assets during the fourth quarter of 2018. See Note 10. h. Goodwill and Other Indefinite-Lived Intangible Assets Goodwill and intangible assets with indefinite lives are not amortized but are reviewed annually for impairment or more frequently if impairment indicators arise. Other than goodwill, we currently have no intangible assets that have indefinite lives and which are not amortized. We have selected October 1 as our annual goodwill impairment review date. We have performed our annual goodwill impairment review as of October 1, 2019, 2018 and 2017. We concluded that as of October 1, 2019 and October 1, 2018, goodwill was not impaired. As of October 1, 2017, we determined that the fair value of the Consumer Storage reporting unit was less than its carrying value and, therefore, we recorded a $3,011 impairment charge, which represented a full write-off of all goodwill associated with this reporting unit. We concluded that the goodwill associated with each of our other reporting units was not impaired as of October 1, 2017. Our reporting units at which level we performed our goodwill impairment analysis as of December 31, 2017 were as follows: (1) North American Records and Information Management; (2) North American Data Management; (3) Consumer Storage; (4) Fine Arts; (5) Western Europe; (6) Northern/Eastern Europe and Middle East, Africa and India ("NEE and MEAI"); (7) Latin America; (8) Australia and New Zealand; (9) Asia; and (10) Global Data Center. The following is a discussion regarding (i) the reporting units at which level we tested goodwill for impairment as of October 1, 2018, (ii) changes to the composition of our reporting units between October 1, 2018 and December 31, 2018, (iii) the reporting units at which level we tested goodwill for impairment as of October 1, 2019 and (iv) changes to the composition of our reporting units between October 1, 2019 and December 31, 2019 (including the amount of goodwill associated with each reporting unit). When changes occur in the composition of one or more reporting units, the goodwill is reassigned to the reporting units affected based upon their relative fair values. Goodwill Impairment Analysis - 2018 a. Reporting Units as of October 1, 2018 Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2018 were as follows: (1) North American Records and Information Management; (2) North American Data Management; (3) Consumer Storage; (4) Fine Arts; (5) Entertainment Services; (6) Western Europe; (7) Northern/Eastern Europe and Middle East and India ("NEE and MEI"); (8) Latin America; (9) Australia, New Zealand and South Africa ("ANZ SA"); (10) Asia; and (11) Global Data Center. We concluded that the goodwill associated with each of our reporting units was not impaired as of October 1, 2018. b. Changes to Composition of Reporting Units between October 1, 2018 and December 31, 2018 During the fourth quarter of 2018, as a result of changes in the management of our Information Governance and Digital Solutions business in Sweden, we reassessed the composition of our reporting units. As part of this reassessment, we determined that our Information Governance and Digital Solutions business in Sweden (which was previously managed along with our other businesses within the Western Europe reporting unit) was at the time being managed in conjunction with our businesses included in our NEE and MEI reporting unit, which already included the remainder of our business in Sweden. We concluded that the goodwill associated with our Western Europe and NEE and MEI reporting units was not impaired following this change in reporting units. Goodwill by Reporting Unit as of December 31, 2018 The carrying value of goodwill, net for each of our reporting units described above as of December 31, 2018 is as follows:
| Carrying Value as of December 31, 2018
North American Records and Information Management(1) | $ | 2,251,795 |
North American Data Management(2) | 493,491 |
Consumer Storage(3) | — |
Fine Arts(3) | 35,526 |
Entertainment Services(3) | 34,233 |
Western Europe(4) | 381,806 |
NEE and MEI(5) | 169,780 |
Latin America(5) | 136,099 |
ANZ SA(5) | 300,204 |
Asia(5) | 212,140 |
Global Data Center(6) | 425,956 |
Total | $ | 4,441,030 |
_______________________________________________________________________________ (1) This reporting unit comprised our former North American Records and Information Management Business segment. (2) This reporting unit comprised our former North American Data Management Business segment. (3) This reporting unit was included in our Corporate and Other Business segment. (4) This reporting unit comprised our former Western European Business segment. (5) This reporting unit was included in our former Other International Business segment. (6) This reporting unit comprised our Global Data Center Business segment. Goodwill Impairment Analysis - 2019 a. Reporting Units as of October 1, 2019 Our reporting units at which level we performed our goodwill impairment analysis as of October 1, 2019 were as follows: (1) North American Records and Information Management; (2) North American Data Management; (3) Fine Arts; (4) Entertainment Services; (5) Western Europe; (6) NEE and MEI; (7) Latin America; (8) ANZ SA; (9) Asia; and (10) Global Data Center. We concluded that the goodwill associated with each of our reporting units was not impaired as of such date. b. Changes to Composition of Reporting Units between October 1, 2019 and December 31, 2019 During the fourth quarter of 2019, as a result of the realignment of our global managerial structure and changes to our internal financial reporting associated with Project Summit, we reassessed the composition of our reportable operating segments (see Note 9 for a description and definitions of our reporting operating segments) as well as our reporting units. As of December 31, 2019, we have nine reporting units. We note the following changes to our reporting units: (1) our former North American Records and Information Management (excluding our technology escrow services business) and North American Data Management reporting units are now being managed as our “North America RIM” reporting unit; (2) our former Western Europe and NEE and MEI reporting units (excluding India) and our business in Africa (which was previously managed as a component of our former ANZ SA reporting unit) is now being managed together as our “Europe RIM” reporting unit; (3) our business in India, which was previously managed as a component of our former NEE and MEI reporting unit is now being managed in conjunction with our businesses in Asia as our “Asia RIM” reporting unit; (4) our former Australia, New Zealand and South Africa reporting unit will no longer include South Africa and will be referred to as our “Australia and New Zealand RIM” (or “ANZ RIM”) reporting unit; and (5) our technology escrow services business is now being managed separately as our “Technology Escrow Services” reporting unit. There were no changes to our Global Data Center, Fine Arts, Entertainment Services and Latin America RIM reporting units. We concluded that the goodwill associated with our North America RIM, Europe RIM, ANZ RIM, Asia RIM and Technology Escrow Services reporting units were not impaired following this change in reporting units. Goodwill by Reporting Unit as of December 31, 2019 The carrying value of goodwill, net for each of our reporting units described above as of December 31, 2019 is as follows:
| Carrying Value as of December 31, 2019
North America RIM(1) | $ | 2,715,550 |
Europe RIM(1) | 572,482 |
Latin America RIM(1) | 140,897 |
ANZ RIM(1) | 274,913 |
Asia RIM(1) | 239,059 |
Global Data Center(2) | 424,568 |
Fine Arts(3) | 37,533 |
Entertainment Services(3) | 34,102 |
Technology Escrow Services(3) | 46,105 |
Total | $ | 4,485,209 |
______________________________________________________________________ (1) This reporting unit is included in our Global RIM (as defined in Note 9) Business segment. (2) This reporting unit comprises our Global Data Center Business segment. (3) This reporting unit is included in our Corporate and Other Business segment. Reporting unit valuations have generally been determined using a combined approach based on the present value of future cash flows (the "Discounted Cash Flow Model") and market multiples (the "Market Approach"). The Discounted Cash Flow Model incorporates significant assumptions including future revenue growth rates, operating margins, discount rates and capital expenditures. The Market Approach requires us to make assumptions related to Adjusted EBITDA multiples. Changes in economic and operating conditions impacting these assumptions or changes in multiples could result in goodwill impairments in future periods. In conjunction with our annual goodwill impairment reviews, we reconcile the sum of the valuations of all of our reporting units to our market capitalization as of such dates. The changes in the carrying value of goodwill attributable to each reportable operating segment for the years ended December 31, 2019 and 2018 is as follows:
| Global RIM Business |  | Global Data Center Business |  | Corporate and Other Business |  | Total Consolidated
Goodwill balance, net of accumulated amortization, as of December 31, 2017 | $ | 3,964,114 |  |  | $ | — |  |  | $ | 106,153 |  |  | $ | 4,070,267 |
Deductible goodwill acquired during the year | 3,251 |  |  | — |  |  | 6,644 |  |  | 9,895 |
Non-deductible goodwill acquired during the year | 34,230 |  |  | 429,853 |  |  | 3,620 |  |  | 467,703 |
Goodwill allocated to IMFS Divestment (see Note 13) | (1,202 | ) |  | — |  |  | — |  |  | (1,202 | )
Fair value and other adjustments(1) | 3,860 |  |  | — |  |  | 609 |  |  | 4,469 |
Currency effects | (105,043 | ) |  | (3,897 | ) |  | (1,162 | ) |  | (110,102 | )
Goodwill balance, net of accumulated amortization, as of December 31, 2018 | 3,899,210 |  |  | 425,956 |  |  | 115,864 |  |  | 4,441,030 |
Deductible goodwill acquired during the year | 16,450 |  |  | — |  |  | — |  |  | 16,450 |
Non-deductible goodwill acquired during the year | 11,228 |  |  | — |  |  | 1,904 |  |  | 13,132 |
Fair value and other adjustments(2) | 4,439 |  |  | 258 |  |  | (417 | ) |  | 4,280 |
Currency effects | 11,574 |  |  | (1,646 | ) |  | 389 |  |  | 10,317 |
Goodwill balance, net of accumulated amortization, as of December 31, 2019 | $ | 3,942,901 |  |  | $ | 424,568 |  |  | $ | 117,740 |  |  | $ | 4,485,209 |
Accumulated Goodwill Impairment Balance as of December 31, 2018 | $ | 132,409 |  |  | $ | — |  |  | $ | 3,011 |  |  | $ | 135,420 |
Accumulated Goodwill Impairment Balance as of December 31, 2019 | $ | 132,409 |  |  | $ | — |  |  | $ | 3,011 |  |  | $ | 135,420 |
___________________________________________________________________
(1) | Total fair value and other adjustments primarily include net adjustments of $(2,717) primarily related to property, plant and equipment, customer relationship intangible assets and other liabilities and $7,186 of cash paid related to certain acquisitions completed in 2017.
(2) Total fair value and other adjustments primarily include net adjustments of $4,942 primarily related to property, plant and equipment, customer relationship and data center lease-based intangible assets and deferred income taxes and other liabilities offset by $662 of net cash received related to certain acquisitions completed in 2018. i. Finite-lived Intangible Assets and Liabilities i. Customer Relationship Intangible Assets Customer relationship intangible assets, which are acquired through either business combinations or acquisitions of customer relationships, are amortized over periods ranging from 10 to 30 years (weighted average of 17 years at December 31, 2019) and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. The value of customer relationship intangible assets is calculated based upon estimates of their fair value. ii. Customer Inducements Upon the adoption of ASU 2014-09, free intake costs to transport boxes to one of our facilities, which include labor and transportation costs ("Free Move Costs"), are considered a Contract Fulfillment Cost (as defined in Note 2.l.) and, therefore, are now deferred and amortized and included in amortization expense over three years, consistent with the transfer of the performance obligation to the customer to which the asset relates. See Note 2.l. for information regarding the accounting for Free Move Costs, which are now a component of Intake Costs (as defined in Note 2.l.), following the adoption of ASU 2014-09. Payments that are made to a customer's current records management vendor in order to terminate the customer's existing contract with that vendor, or direct payments to a customer ("Permanent Withdrawal Fees"), are amortized over periods ranging from five to 15 years (weighted average of seven years as of December 31, 2019) and are included in storage and service revenue in the accompanying Consolidated Statements of Operations. Our accounting for Permanent Withdrawal Fees did not change as a result of the adoption of ASU 2014-09. Free Move Costs (prior to the adoption of ASU 2014-09) and Permanent Withdrawal Fees are collectively referred to as "Customer Inducements". If the customer terminates its relationship with us, the unamortized carrying value of the Customer Inducement intangible asset is charged to expense or revenue. However, in the event of such termination, we generally collect, and record as income, permanent removal fees that generally equal or exceed the amount of the unamortized Customer Inducement intangible asset. iii. Data Center Intangible Assets and Liabilities Finite-lived intangible assets associated with our Global Data Center Business consist of the following: Data Center In-Place Lease Intangible Assets and Data Center Tenant Relationship Intangible Assets Data Center In-Place Lease Intangible Assets (“Data Center In-Place Leases”) and Data Center Tenant Relationship Intangible Assets (“Data Center Tenant Relationships") are acquired through either business combinations or asset acquisitions in our Global Data Center Business. These intangible assets reflect the value associated with acquiring a data center operation with active tenants as of the date of acquisition. The value of Data Center In-Place Leases is determined based upon an estimate of the economic costs (such as lost revenues, tenant improvement costs, commissions, legal expenses and other costs to acquire new data center leases) avoided by acquiring a data center operation with active tenants that would have otherwise been incurred if the data center operation was purchased vacant. Data Center In-Place Leases are amortized over the weighted average remaining term of the acquired data center leases (weighted average of five years as of December 31, 2019) and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. The value of Data Center Tenant Relationships is determined based upon an estimate of the economic costs avoided upon lease renewal of the acquired tenants, based upon expectations of lease renewal. Data Center Tenant Relationships are amortized over the weighted average remaining anticipated life of the relationship with the acquired tenant (weighted average of eight years as of December 31, 2019) and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. Data Center In-Place Leases and Data Center Tenant Relationships are included in Customer relationships, customer inducements and data center lease-based intangibles in the accompanying Consolidated Balance Sheets. Data Center Above-Market and Below-Market In-Place Lease Intangible Assets Data Center Above-Market In-Place Lease Intangible Assets (“Data Center Above-Market Leases”) and Data Center Below-Market In-Place Lease Intangible Assets (“Data Center Below-Market Leases”) are acquired through either business combinations or asset acquisitions in our Global Data Center Business. We record Data Center Above-Market Leases and Data Center Below-Market Leases at the net present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of the fair market lease rates for each corresponding in-place lease. Data Center Above-Market Leases (weighted average of four years as of December 31, 2019) and Data Center Below-Market Leases (weighted average of nine years as of December 31, 2019) are amortized over the remaining non-cancellable term of the acquired in-place lease to storage revenue in the accompanying Consolidated Statements of Operations. Data Center Above-Market Leases are included in Customer relationships, customer inducements and data center lease-based intangibles in the accompanying Consolidated Balance Sheets. Data Center Below-Market Leases are included in Other long-term liabilities in the accompanying Consolidated Balance Sheets. The gross carrying amount and accumulated amortization of our finite-lived intangible assets as of December 31, 2019 and 2018, respectively, are as follows:
| December 31, 2019 |  | December 31, 2018
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Assets: |  |  |  |  |  |  |  |  |  |  |
Customer relationship intangible assets | $ | 1,751,848 |  |  | $ | (544,721 | ) |  | $ | 1,207,127 |  |  | $ | 1,718,919 |  |  | $ | (455,705 | ) |  | $ | 1,263,214 |
Customer inducements | 52,718 |  |  | (29,397 | ) |  | 23,321 |  |  | 56,478 |  |  | (34,181 | ) |  | 22,297 |
Data center lease-based intangible assets(1) | 265,945 |  |  | (103,210 | ) |  | 162,735 |  |  | 271,818 |  |  | (50,807 | ) |  | 221,011 |
Third-party commissions asset(2) | 31,708 |  |  | (4,134 | ) |  | 27,574 |  |  | 30,071 |  |  | (1,089 | ) |  | 28,982 |
| $ | 2,102,219 |  |  | $ | (681,462 | ) |  | $ | 1,420,757 |  |  | $ | 2,077,286 |  |  | $ | (541,782 | ) |  | $ | 1,535,504 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Data center below-market leases | $ | 12,750 |  |  | $ | (3,937 | ) |  | $ | 8,813 |  |  | $ | 12,318 |  |  | $ | (1,642 | ) |  | $ | 10,676 |
_______________________________________________________________________________
(1) | Includes Data Center In-Place Leases, Data Center Tenant Relationships and Data Center Above-Market Leases.
(2) | Third-party commissions asset is included in Other, a component of Other assets, net in the accompanying Consolidated Balance Sheets as of December 31, 2019 and 2018. See Note 6 for additional information on the third-party commissions asset.
Other finite-lived intangible assets, including trade names, noncompetition agreements and trademarks, are capitalized and amortized over a weighted average of four years as of December 31, 2019, and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations.
| December 31, 2019 |  | December 31, 2018
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Other finite-lived intangible assets (included in Other, a component of Other assets, net) | $ | 19,893 |  |  | $ | (18,405 | ) |  | $ | 1,488 |  |  | $ | 20,310 |  |  | $ | (14,798 | ) |  | $ | 5,512 |
Amortization expense associated with finite-lived intangible assets, revenue reduction associated with the amortization of Permanent Withdrawal Fees and net revenue reduction associated with the amortization of Data Center Above-Market Leases and Data Center Below-Market Leases for the years ended December 31, 2019, 2018 and 2017 are as follows:
|  | Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
Amortization expense included in depreciation and amortization associated with: |  |  |  |  |  |  |  |  |
Customer relationship and customer inducement intangible assets |  | $ | 117,972 |  |  | $ | 113,782 |  |  | $ | 109,563 |
Data center in-place leases and tenant relationships |  | 46,696 |  |  | 43,061 |  |  | — |
Third-party commissions asset and other finite-lived intangible assets |  | 7,957 |  |  | 5,713 |  |  | 6,530 |
Revenue reduction associated with amortization of: |  |  |  |  |  |  |  |  |
Permanent withdrawal fees |  | $ | 9,993 |  |  | $ | 11,408 |  |  | $ | 11,253 |
Data center above-market leases and data center below-market leases |  | 3,710 |  |  | 4,873 |  |  | — |
Estimated amortization expense for existing finite-lived intangible assets (excluding deferred financing costs, as disclosed in Note 2.j. and Contract Fulfillment Costs, as defined and disclosed in Note 2.l.) is as follows:
| Estimated Amortization
| Included in Depreciation and Amortization |  | Revenue Reduction Associated with the Amortization of Permanent Withdrawal Fees |  | Revenue Reduction (Increase) Associated with Amortization of Data Center Above-market leases and Below-market leases
2020 | $ | 160,865 |  |  | $ | 7,760 |  |  | $ | 872 |
2021 | 157,647 |  |  | 5,207 |  |  | 234 |
2022 | 127,148 |  |  | 3,200 |  |  | 273 |
2023 | 121,256 |  |  | 2,112 |  |  | (470 | )
2024 | 116,253 |  |  | 1,125 |  |  | (610 | )
Thereafter | 712,369 |  |  | 1,303 |  |  | (3,112 | )
j. Deferred Financing Costs Deferred financing costs are amortized over the life of the related debt. If debt is retired early, the related unamortized deferred financing costs are written-off in the period the debt is retired to Other expense (income), net. As of December 31, 2019 and 2018, the gross carrying amount of deferred financing costs was $144,981 and $128,469, respectively, and accumulated amortization of those costs was $58,016 and $41,862, respectively. Unamortized deferred financing costs are included as a component of Long-term debt in our Consolidated Balance Sheets. Estimated amortization expense for deferred financing costs, which are amortized as a component of interest expense, is as follows:
| Estimated Amortization of Deferred Financing Costs
2020 | $ | 17,132 |
2021 | 16,002 |
2022 | 14,888 |
2023 | 11,618 |
2024 | 8,424 |
Thereafter | 18,901 |
k. Prepaid Expenses and Accrued Expenses There are no prepaid expenses with items greater than 5% of total current assets as of December 31, 2019 and 2018. Accrued expenses, with items greater than 5% of total current liabilities are shown separately, and consist of the following:
| December 31,
| 2019 |  | 2018
Interest | $ | 97,987 |  |  | $ | 84,283 |
Incentive compensation | 56,662 |  |  | 75,256 |
Sales tax and VAT payable | 115,352 |  |  | 124,232 |
Dividend | 186,021 |  |  | 181,986 |
Operating lease liabilities | 223,249 |  |  | — |
Other | 282,481 |  |  | 315,024 |
Accrued expenses | $ | 961,752 |  |  | $ | 780,781 |
l. Revenues Our revenues consist of storage rental revenues as well as service revenues and are reflected net of sales and value-added taxes. Storage rental revenues, which are considered a key driver of financial performance for the storage and information management services industry, consist primarily of recurring periodic rental charges related to the storage of materials or data (generally on a per unit basis) that are typically retained by customers for many years, technology escrow services that protect and manage source code and revenues associated with our data center operations. Service revenues include charges for related service activities, the most significant of which include: (1) the handling of records, including the addition of new records, temporary removal of records from storage, refiling of removed records and courier operations, consisting primarily of the pickup and delivery of records upon customer request; (2) destruction services, consisting primarily of secure shredding of sensitive documents and the subsequent sale of shredded paper for recycling, the price of which can fluctuate from period to period, and customer termination and permanent removal fees; (3) other services, including the scanning, imaging and document conversion services of active and inactive records and project revenues; and (4) consulting services. In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09. ASU 2014-09 provides guidance for management to reassess revenue recognition as it relates to: (1) transfer of control, (2) variable consideration, (3) allocation of transaction price based on relative standalone selling price, (4) licenses, (5) time value of money, and (6) contract costs. We adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective method for all of our customer contracts, whereby the cumulative effect of applying ASU 2014-09 is recognized at the date of initial application. At January 1, 2018, we recognized the cumulative effect of initially applying ASU 2014-09 as an adjustment to the opening balance of (Distributions in excess of earnings) Earnings in excess of distributions, resulting in a decrease of approximately $30,200 to stockholders' equity. The reduction of (Distribution in excess of earnings) Earnings in excess of distributions represents the net effect of (i) the write-off of Free Move Costs, net (which were capitalized and amortized prior to the adoption of ASU 2014-09) based upon the net book value of the Free Move Costs as of December 31, 2017, (ii) the recognition of certain Contract Fulfillment Costs, specifically Intake Costs (each as defined below) and commission assets, (iii) the recognition of deferred revenue associated with Intake Costs billed to our customers, and (iv) the deferred income tax impact of the aforementioned items. As we adopted ASU 2014-09 on a modified retrospective basis, the prior period consolidated financial statements were not restated to reflect the adoption of ASU 2014-09 and reflect our revenue policies in place at that time. Storage rental and service revenues are recognized in the month the respective storage rental or service is provided, and customers are generally billed on a monthly basis on contractually agreed-upon terms. Amounts related to future storage rental or prepaid service contracts for customers where storage rental fees or services are billed in advance are accounted for as deferred revenue and recognized ratably over the period the applicable storage rental or service is provided or performed. Revenues from the sales of products, which are included as a component of service revenues, are recognized when products are shipped and title has passed to the customer. Revenues from the sales of products, which represented less than 2% of consolidated revenue for the year ended December 31, 2019, have historically not been significant. The performance obligation is a series of distinct services (as determined for purposes of ASU 2014-09, a “series”) that have the same pattern of transfer to the customer that is satisfied over time. For those contracts that qualify as a series, we have a right to consideration from the customer in an amount that corresponds directly with the value of the underlying performance obligation transferred to the customer to date. This concept is known as "right to invoice" and we are applying the "right to invoice" practical expedient to all revenues, with the exception of storage revenues in our Global Data Center Business. For all of our businesses, with the exception of the storage component of our Global Data Center Business, each purchasing decision is fully in the control of the customer and, therefore, consideration beyond the current reporting period is variable and allocated to the specific period, which is consistent with the practical expedient described above. Our Global Data Center Business features storage rental provided to the customer at contractually specified rates over a fixed contractual period. The storage rental revenue related to the storage component of our Global Data Center Business is recognized on a straight-line basis over the contract term. The revenue related to the service component of our Global Data Center Business is recognized in the period the related services are provided. The costs associated with the initial movement of customer records into physical storage and certain commissions are considered costs to obtain or fulfill customer contracts (“Contract Fulfillment Costs”). The following describes each of these Contract Fulfillment Costs recognized under ASU 2014-09: Intake Costs (and associated deferred revenue) Upon the adoption of ASU 2014-09, all the costs of the initial intake of customer records into physical storage ("Intake Costs"), regardless of whether or not the services associated with such initial moves are billed to the customer or are provided to the customer at no charge, are deferred and amortized as a component of depreciation and amortization in our Consolidated Statements of Operations over three years, consistent with the transfer of the performance obligation to the customer to which the asset relates. Similarly, in instances where such Intake Costs are billed to the customer, the associated revenue will be deferred and recognized over the same three-year period. Commissions Upon the adoption of ASU 2014-09, certain commission payments that are directly associated with the fulfillment of long-term storage contracts are capitalized and amortized as a component of depreciation and amortization in our Consolidated Statements of Operations over three years, consistent with the transfer of the performance obligation to the customer to which the asset relates. Certain direct commission payments associated with contracts with a duration of one year or less are expensed as incurred under the practical expedient which allows an entity to expense as incurred an incremental cost of obtaining a contract if the amortization period of the asset that the entity otherwise would have recognized is one year or less. The Contract Fulfillment Costs as of December 31, 2019 and 2018 are as follows:
|  |  |  | December 31, 2019 |  | December 31, 2018
Description |  | Location in Balance Sheet |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Intake Costs asset |  | Other (within Other Assets, Net) |  | $ | 41,224 |  |  | $ | (23,579 | ) |  | $ | 17,645 |  |  | $ | 39,748 |  |  | $ | (24,504 | ) |  | $ | 15,244 |
Commissions asset |  | Other (within Other Assets, Net) |  | 68,008 |  |  | (27,178 | ) |  | 40,830 |  |  | 58,424 |  |  | (34,637 | ) |  | 23,787 |
Amortization expense associated with the Intake Costs asset and capitalized commissions asset for the years ended December 31, 2019 and 2018 are as follows:
|  | Year Ended December 31,
Description |  | 2019 |  | 2018
Intake Costs asset |  | $ | 10,144 |  |  | $ | 10,380 |
Capitalized commissions asset |  | 19,109 |  |  | 13,838 |
Estimated amortization expense for Contract Fulfillment Costs is as follows:
Year |  | Estimated Amortization
2020 |  | $ | 28,156 |
2021 |  | 20,448 |
2022 |  | 9,871 |
Deferred revenue liabilities are reflected as follows in our Consolidated Balance Sheets:
|  |  |  | December 31,
Description |  | Location in Balance Sheet |  | 2019 |  | 2018
Deferred revenue - Current |  | Deferred revenue |  | $ | 274,036 |  |  | $ | 264,823 |
Deferred revenue - Long-term |  | Other Long-term Liabilities |  | 36,029 |  |  | 26,401 |
Data Center Lessor Considerations Our Global Data Center Business features storage rental provided to customers at contractually specified rates over a fixed contractual period. Prior to January 1, 2019, our data center revenue contracts were accounted for in accordance with Accounting Standards Codification (“ASC”) No. 840, Leases ("ASC 840"). On January 1, 2019, we adopted ASU 2016-02, as described in more detail in Note 2.m. Beginning on January 1, 2019, our data center revenue contracts are accounted for in accordance with ASU 2016-02. ASU 2016-02 provides a practical expedient which allows lessors to account for nonlease components (such as power and connectivity, in the case of our Global Data Center Business) with the related lease component if both the timing and pattern of transfer are the same for nonlease components and the lease component, and the lease component would be classified as an operating lease. The single combined component is accounted for under ASU 2016-02 if the lease component is the predominant component and is accounted for under ASU 2014-09, if the nonlease components are the predominant components. We have elected to take this practical expedient. Storage rental revenue associated with our Global Data Center Business was approximately $246,900 and $218,700 for the years ended December 31, 2019 and 2018, respectively, which includes approximately $43,300 and $38,800 of revenue associated with power and connectivity for the years ended December 31, 2019 and 2018, respectively. The revenue related to the service component of our Global Data Center Business remains unchanged from the adoption of ASU 2016-02 and is recognized in the period the related services are provided. Our accounting treatment for data center revenue was not significantly impacted by the adoption of ASU 2016-02. The future minimum lease payments we expect to receive under non-cancellable data center operating leases, for which we are the lessor, excluding month to month leases, for the next five years are as follows:
Year |  | Future minimum lease payments
2020 |  | $ | 202,130 |
2021 |  | 135,911 |
2022 |  | 98,797 |
2023 |  | 80,079 |
2024 |  | 68,376 |
m. Leases We lease facilities for certain warehouses, data centers and office space. We also have land leases, including those on which certain facilities are located. The majority of our leased facilities are classified as operating leases that, on average, have initial lease terms of five to 10 years, with one or more lease renewal options to extend the lease term. Our lease renewal option terms generally range from one to five years. The exercise of the lease renewal option is at our sole discretion and may contain fixed rent, fair market value based rent or Consumer Price Index rent escalation clauses. We include option periods in the lease term when our failure to renew the lease would result in an economic disincentive, thereby making it reasonably certain that we will renew the lease. We recognize straight line rental expense over the life of the lease and any fair market value or Consumer Price Index rent escalations are recognized as variable lease expense in the period in which the obligation is incurred. In addition, we lease certain vehicles and equipment. Vehicle and equipment leases typically have lease terms ranging from one to seven years. In February 2016, FASB issued ASU 2016-02 which requires lessees to recognize assets and liabilities on the balance sheet for the rights and the obligations created by all leases, both operating and financing (formerly referred to as capital leases under ASC 840). ASU 2016-02 requires certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. We adopted ASU 2016-02 on January 1, 2019 on a modified retrospective basis under which we recognized and measured leases existing at, or entered into after, the beginning of the period of adoption. Therefore, we applied ASC 840 to all earlier comparative periods (prior to the adoption of ASU 2016-02), including disclosures, and recognized the effects of applying ASU 2016-02 as a cumulative-effect adjustment to (Distributions in excess of earnings) Earnings in excess of distributions as of January 1, 2019, the effective date of the standard. As such, our Consolidated Balance Sheet as of December 31, 2018 has not been restated to reflect the adoption of ASU 2016-02. Accordingly, the majority of the amount presented as deferred rent liabilities on our Consolidated Balance Sheet as of December 31, 2018 is now included in the calculation of operating lease right-of-use assets and any remaining amounts are now classified within other liability line items on our Consolidated Balance Sheet as of December 31, 2019. The transition guidance associated with ASU 2016-02 also permitted certain practical expedients. We elected the "package of 3" practical expedients permitted under the transition guidance which, among other things, allowed us to carry forward our historical lease classifications. We also adopted an accounting policy which provides that leases with an initial term of 12 months or less will not be included within the lease right-of-use assets and lease liabilities recognized on our Consolidated Balance Sheets after the adoption of ASU 2016-02. We will continue to recognize the lease payments for those leases with an initial term of 12 months or less in our Consolidated Statements of Operations on a straight-line basis over the lease term. The lease right-of-use assets and related lease liabilities are classified as either operating or financing. Lease right-of-use assets are calculated as the net present value of future payments plus any capitalized initial direct costs less any tenant improvements or lease incentives. Lease liabilities are calculated as the net present value of future payments. In calculating the present value of the lease payments, we will utilize the rate stated in the lease (in the limited circumstances when such rate is explicitly stated) or, if no rate is explicitly stated, we have elected to utilize a rate that reflects our securitized incremental borrowing rate by geography for the lease term. In July 2018, the FASB issued ASU No. 2018-11, Leases - Targeted Improvements ("ASU 2018-11"). ASU 2018-11 provides a practical expedient which allows lessees to account for nonlease components (which include common area maintenance, taxes, and insurance) with the related lease component. Any variable nonlease components are not included within the lease right-of-use asset and lease liability on our Consolidated Balance Sheets, and instead, are reflected as an expense in the period incurred. We have elected to take this practical expedient upon adoption of ASU 2016-02. At January 1, 2019, we recognized the cumulative effect of initially applying ASU 2016-02 as an adjustment to the opening balance of (Distributions in excess of earnings) Earnings in excess of distributions, resulting in an increase of approximately $5,800 to stockholders' equity due to certain build to suit leases that were accounted for as financing leases under ASC 840, but are accounted for as operating leases under ASU 2016-02 at January 1, 2019. Operating and financing lease right-of-use assets and lease liabilities as of December 31, 2019 and January 1, 2019 (date of adoption of ASU 2016-02) are as follows:
Description |  | Location in Balance Sheet |  | December 31, 2019 |  | January 1, 2019 (Date of Adoption of ASU 2016-02)
Assets: |  |  |  |  |  |
Operating lease right-of-use assets(1) |  | Operating lease right-of-use assets |  | $ | 1,869,101 |  |  | $ | 1,825,721 |
Financing lease right-of-use assets, net of accumulated depreciation(2) |  | Property, Plant and Equipment, Net |  | 327,215 |  |  | 361,078 |
Total |  |  |  | $ | 2,196,316 |  |  | $ | 2,186,799 |
Liabilities: |  |  |  |  |  |
Current |  |  |  |  |  |
Operating lease liabilities |  | Accrued expenses and other current liabilities |  | $ | 223,249 |  |  | $ | 209,911 |
Financing lease liabilities |  | Current portion of long-term debt |  | 46,582 |  |  | 50,437 |
Total current lease liabilities |  |  |  | 269,831 |  |  | 260,348 |
Long-term |  |  |  |  |  |
Operating lease liabilities |  | Long-term Operating Lease Liabilities, net of current portion |  | 1,728,686 |  |  | 1,685,771 |
Financing lease liabilities |  | Long-term Debt, net of current portion |  | 320,600 |  |  | 350,263 |
Total long-term lease liabilities |  |  |  | 2,049,286 |  |  | 2,036,034 |
Total |  |  |  | $ | 2,319,117 |  |  | $ | 2,296,382 |
______________________________________________________________ (1) At December 31, 2019, these assets are comprised of approximately 99% real estate related assets (which include land, buildings and racking) and 1% non-real estate related assets (which include warehouse equipment, vehicles, furniture and fixtures and computer hardware and software). (2) At December 31, 2019, these assets are comprised of approximately 69% real estate related assets and 31% non-real estate related assets. The components of the lease expense for the year ended December 31, 2019 are as follows:
Description |  | Location in Statement of Operations |  | December 31, 2019
Operating lease cost(1) |  | Cost of sales and Selling, general and administrative |  | $ | 459,619 |
Financing lease cost: |  |  |  |
Depreciation of financing lease right-of-use assets |  | Depreciation and amortization |  | $ | 59,258 |
Interest expense for financing lease liabilities |  | Interest Expense, Net |  | 21,031 |
Total financing lease cost |  |  |  | $ | 80,289 |
______________________________________________________________ (1) Of the $459,619 incurred for the year ended December 31, 2019, $447,194 is included within Cost of sales and $12,425 is included within Selling, general and administrative expenses. Operating lease cost includes variable lease costs of $105,922 for the year ended December 31, 2019. We recognized total rent expense, excluding variable lease costs such as common area maintenance charges, insurance and taxes under all of our operating leases of $365,762 and $350,403 for the years ended December 31, 2018 and 2017, respectively. We sublease certain real estate to third parties. We recognized sublease income of $6,637 for the year ended December 31, 2019. Weighted average remaining lease terms and discount rates as of December 31, 2019 are as follows:
|  | Remaining Lease Term
Operating leases |  | 11.0 Years |
Financing leases |  | 11.6 Years |
|  | Discount Rate
Operating leases |  | 7.1 | %
Financing leases |  | 5.7 | %
The estimated minimum future lease payments as of December 31, 2019, are as follows:
Year |  | Operating Leases(1) |  | Sublease Income |  | Financing Leases(1)
2020 |  | $ | 339,469 |  |  | $ | (7,695 | ) |  | $ | 62,271 |
2021 |  | 319,628 |  |  | (5,282 | ) |  | 54,993 |
2022 |  | 295,981 |  |  | (4,996 | ) |  | 44,886 |
2023 |  | 267,809 |  |  | (4,885 | ) |  | 39,130 |
2024 |  | 237,604 |  |  | (3,543 | ) |  | 31,849 |
Thereafter |  | 1,454,918 |  |  | (7,691 | ) |  | 277,890 |
Total minimum lease payments |  | 2,915,409 |  |  | $ | (34,092 | ) |  | 511,019 |
Less amounts representing interest or imputed interest |  | (963,474 | ) |  |  |  |  | (143,837 | )
Present value of lease obligations |  | $ | 1,951,935 |  |  |  |  |  | $ | 367,182 |
The estimated minimum future lease payments as of December 31, 2018 are as follows:
Year |  | Operating Leases(1) |  | Sublease Income |  | Financing Leases(1)(2)
2019 |  | $ | 323,454 |  |  | $ | (7,525 | ) |  | $ | 80,513 |
2020 |  | 293,276 |  |  | (7,200 | ) |  | 71,335 |
2021 |  | 267,379 |  |  | (7,063 | ) |  | 61,269 |
2022 |  | 246,128 |  |  | (6,694 | ) |  | 52,832 |
2023 |  | 221,808 |  |  | (6,409 | ) |  | 44,722 |
Thereafter |  | 1,287,807 |  |  | (6,279 | ) |  | 377,750 |
Total minimum lease payments |  | $ | 2,639,852 |  |  | $ | (41,170 | ) |  | 688,421 |
Less amounts representing interest |  |  |  |  |  |  | (241,248 | )
Present value of lease obligations |  |  |  |  |  |  | $ | 447,173 |
_______________________________________________________________________________
(1) | Estimated minimum future lease payments exclude variable common area maintenance charges, insurance and taxes. Differences in estimated lease payments between December 31, 2019 and December 31, 2018 are primarily related to adjustments to account for certain build to suit leases that were accounted for as financing obligations under ASC 840 but are accounted for as operating leases under ASU 2016-02 and foreign currency exchange rate impacts.
(2) | Includes financing lease and financing obligations associated with build to suit lease transactions at December 31, 2018.
In the fourth quarter of 2019, we entered into an agreement to lease a facility in the United Kingdom that is currently under construction. The exact terms of the lease will be determined upon the completion of building construction, which is expected to occur in late 2020. We expect the rent due in the first year of the lease to be approximately $5,000, and we expect the term of the lease to be approximately 25 years. As of December 31, 2019, we do not have any operating or financing leases with related parties that are material to our consolidated financial statements. Other information: Supplemental cash flow information relating to our leases for the year ended December 31, 2019 is as follows:
Cash paid for amounts included in measurement of lease liabilities: |  | Year Ended December 31, 2019
Operating cash flows used in operating leases |  | $ | 338,059 |
Operating cash flows used in financing leases (interest) |  | 21,031 |
Financing cash flows used in financing leases |  | 58,033 |
Non-cash items: |  |
Operating lease modifications and reassessments |  | $ | 108,023 |
New operating leases (including acquisitions) |  | 170,464 |
New financing leases, modifications and reassessments |  | 32,742 |
n. Stock-Based Compensation We record stock-based compensation expense, utilizing the straight-line method, for the cost of stock options, restricted stock units ("RSUs"), performance units ("PUs") and shares of stock issued under our employee stock purchase plan ("ESPP") (together, "Employee Stock-Based Awards"). For our Employee Stock-Based Awards made on or after February 20, 2019, we have included the following retirement provision: Upon an employee’s retirement on or after attaining age 58, if the sum of (i) the award recipient’s age at retirement and (ii) the award recipient’s years of service with the company totals at least 70, the award recipient is entitled to continued vesting of any outstanding Employee Stock-Based Awards which include the 2019 Retirement Criteria subsequent to their retirement, provided that, for awards granted in the year of retirement, their retirement occurs on or after July 1 (the “2019 Retirement Criteria”). Accordingly, (i) grants of Employee Stock-Based Awards to an employee who has met the 2019 Retirement Criteria on or before the date of grant, or will meet the Retirement Criteria before July 1 of the year of the grant, will be expensed between the date of grant and July 1 of the grant year and (ii) grants of Employee Stock-Based Awards to employees who will meet the 2019 Retirement Criteria during the award’s normal vesting period will be expensed between the date of grant and the date upon which the award recipient meets the 2019 Retirement Criteria. Stock options and RSUs granted to recipients who meet the 2019 Retirement Criteria will continue vesting on the original vesting schedule, and the stock options will remain exercisable up to three years after retirement, or the original expiration date of the stock options, if earlier. PUs granted to recipients who meet the 2019 Retirement Criteria will continue to vest and be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions. Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017 was $35,654 ($33,103 after tax or $0.12 per basic and diluted share), $31,167 ($28,998 after tax or $0.10 per basic and diluted share) and $30,019 ($26,512 after tax or $0.10 per basic and diluted share), respectively. The substantial majority of the stock-based compensation expense for Employee Stock-Based Awards is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. Stock Options Under our various stock option plans, options are generally granted with exercise prices equal to the market price of the stock on the date of grant; however, in certain instances, options are granted at prices greater than the market price of the stock on the date of grant. The options we issue become exercisable ratably over a period of either (i) three years from the date of grant and have a contractual life of 10 years from the date of grant, unless the holder's employment is terminated sooner, or (ii) five years from the date of grant and have a contractual life of 10 years from the date of grant, unless the holder's employment is terminated sooner. Our non-employee directors are considered employees for purposes of our stock option plans and stock option reporting. A summary of our stock options outstanding as of December 31, 2019 by vesting terms is as follows:
| December 31, 2019
| Stock Options Outstanding |  | % of Stock Options Outstanding
Three-year vesting period (10 year contractual life) | 4,691,321 |  |  | 97.0 | %
Five-year vesting period (10 year contractual life) | 144,400 |  |  | 3.0 | %
| 4,835,721 |  |  | 100.0 | %
Our equity compensation plans generally provide that, upon a vesting change in control (as defined in each plan), any unvested options and other awards granted thereunder shall vest immediately if an employee is terminated as a result of the change in control or terminates their own employment for good reason (as defined in each plan). On January 20, 2015, our stockholders approved the adoption of the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan, as amended (the "2014 Plan"). Under the 2014 Plan, the total amount of shares of common stock reserved and available for issuance pursuant to awards granted under the 2014 Plan is 12,750,000. The 2014 Plan permits us to continue to grant awards through May 24, 2027. A total of 48,253,839 shares of common stock have been reserved for grants of options and other rights under our various stock incentive plans, including the 2014 Plan. The number of shares available for grant under our various stock incentive plans, not including the ESPP, at December 31, 2019 was 4,095,067. The weighted average fair value of stock options granted in 2019, 2018 and 2017 was $3.58, $3.50 and $4.28 per share, respectively. These values were estimated on the date of grant using the Black-Scholes option pricing model. The weighted average assumptions used for grants in the year ended December 31:
Weighted Average Assumptions |  | 2019 |  | 2018 |  | 2017
Expected volatility |  | 24.3 | % |  | 25.4 | % |  | 25.7 | %
Risk-free interest rate |  | 2.47 | % |  | 2.65 | % |  | 1.96 | %
Expected dividend yield |  | 7 | % |  | 7 | % |  | 6 | %
Expected life |  | 5.0 years |  |  | 5.0 years |  |  | 5.0 years |
Expected volatility is calculated utilizing daily historical volatility over a period that equates to the expected life of the option. The risk-free interest rate was based on the United States Treasury interest rates whose term is consistent with the expected life (estimated period of time outstanding) of the stock options. Expected dividend yield is considered in the option pricing model and represents our current annualized expected per share dividends over the current trade price of our common stock. The expected life of the stock options granted is estimated using the historical exercise behavior of employees. A summary of stock option activity for the year ended December 31, 2019 is as follows:
| Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value
Outstanding at December 31, 2018 | 4,271,834 |  |  | $ | 34.78 |  |  |  |  |  |
Granted | 920,706 |  |  | 35.71 |  |  |  |  |  |
Exercised | (303,543 | ) |  | 23.86 |  |  |  |  |  |
Forfeited | (23,984 | ) |  | 35.21 |  |  |  |  |  |
Expired | (29,292 | ) |  | 34.78 |  |  |  |  |  |
Outstanding at December 31, 2019 | 4,835,721 |  |  | $ | 35.64 |  |  | 6.72 |  | $ | 3,005 |
Options exercisable at December 31, 2019 | 3,068,945 |  |  | $ | 35.80 |  |  | 5.81 |  | $ | 3,005 |
Options expected to vest | 1,648,127 |  |  | $ | 35.34 |  |  | 8.47 |  | $ | — |
The aggregate intrinsic value of stock options exercised for the years ended December 31, 2019, 2018 and 2017 is as follows:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Aggregate intrinsic value of stock options exercised | $ | 3,148 |  |  | $ | 2,181 |  |  | $ | 8,485 |
Restricted Stock Units Under our various equity compensation plans, we may also grant RSUs. Our RSUs generally have a vesting period of three years from the date of grant. However, RSUs granted to our non-employee directors vest immediately upon grant. All RSUs accrue dividend equivalents associated with the underlying stock as we declare dividends. Dividends will generally be paid to holders of RSUs in cash upon the vesting date of the associated RSU and will be forfeited if the RSU does not vest. The fair value of RSUs is the excess of the market price of our common stock at the date of grant over the purchase price (which is typically zero). Cash dividends accrued and paid on RSUs for the years ended December 31, 2019, 2018 and 2017, are as follows:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Cash dividends accrued on RSUs | $ | 3,215 |  |  | $ | 2,899 |  |  | $ | 2,590 |
Cash dividends paid on RSUs | 2,369 |  |  | 2,477 |  |  | 2,370 |
The fair value of RSUs vested during the years ended December 31, 2019, 2018 and 2017, are as follows:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Fair value of RSUs vested | $ | 21,191 |  |  | $ | 20,454 |  |  | $ | 19,825 |
A summary of RSU activity for the year ended December 31, 2019 is as follows:
| RSUs |  | Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2018 | 1,196,566 |  |  | $ | 34.33 |
Granted | 823,508 |  |  | 34.72 |
Vested | (678,138 | ) |  | 34.06 |
Forfeited | (138,337 | ) |  | 34.75 |
Non-vested at December 31, 2019 | 1,203,599 |  |  | $ | 34.71 |
Performance Units Under our various equity compensation plans, we may also make awards of PUs. For the majority of outstanding PUs, the number of PUs earned is determined based on our performance against predefined targets of revenue and return on invested capital ("ROIC") and, with PUs granted in 2018, Adjusted EBITDA (as defined in Note 9). The number of PUs earned may range from 0% to 200% of the initial award. The number of PUs earned is determined based on our actual performance as compared to the targets at the end of a three-year performance period. Certain PUs that we grant will be earned based on a market condition associated with the total return on our common stock in relation to either (i) a subset of the Standard & Poor's 500 Index (for certain PUs granted prior to 2017), or (ii) the MSCI United States REIT Index (for certain PUs granted in 2017 and thereafter), rather than the revenue, ROIC and Adjusted EBITDA targets noted above. The number of PUs earned based on this market condition may range from 0% to 200% of the initial award. All of our PUs will be settled in shares of our common stock and are subject to cliff vesting three years from the date of the original PU grant. As detailed above, PUs granted on or after February 20, 2019 are subject to the 2019 Retirement Criteria. PUs granted to recipients who meet the 2019 Retirement Criteria will continue to vest and be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions. PUs granted prior to February 20, 2019 to employees who terminate their employment during the three-year performance period and on or after attaining age 55 and completing 10 years of qualifying service are eligible for pro-rated vesting, subject to the actual achievement against the predefined targets or a market condition as discussed above, based on the number of full years of service completed following the grant date (but delivery of the shares remains deferred). As a result, PUs are generally expensed over the three-year performance period. All PUs accrue dividend equivalents associated with the underlying stock as we declare dividends. Dividends will generally be paid to holders of PUs in cash upon the settlement date of the associated PU and will be forfeited if the PU does not vest. Cash dividends accrued and paid on PUs for the years ended December 31, 2019, 2018 and 2017, are as follows:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Cash dividends accrued on PUs | $ | 2,260 |  |  | $ | 1,804 |  |  | $ | 1,290 |
Cash dividends paid on PUs | 1,162 |  |  | 644 |  |  | 205 |
During the years ended December 31, 2019, 2018 and 2017, we issued 380,856, 353,507 and 229,692 PUs, respectively. We forecast the likelihood of achieving the predefined revenue, ROIC and Adjusted EBITDA targets for our PUs in order to calculate the expected PUs to be earned. We record a compensation charge based on either the forecasted PUs to be earned (during the performance period) or the actual PUs earned (at the three-year anniversary of the grant date) over the vesting period for each of the awards. The fair value of PUs based on our performance against revenue, ROIC and Adjusted EBITDA targets is the excess of the market price of our common stock at the date of grant over the purchase price (which is typically zero). For PUs earned based on a market condition, we utilize a Monte Carlo simulation to fair value these awards at the date of grant, and such fair value is expensed over the three-year performance period. As of December 31, 2019, we expected 100%, 50% and 100% achievement of the predefined revenue, ROIC and Adjusted EBITDA targets associated with the awards of PUs made in 2019, 2018 and 2017, respectively. The fair value of earned PUs that vested during the years ended December 31, 2019, 2018 and 2017, is as follows:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Fair value of earned PUs that vested | $ | 6,503 |  |  | $ | 3,117 |  |  | $ | 1,242 |
A summary of PU activity for the year ended December 31, 2019 is as follows:
| Original PU Awards |  | PU Adjustment(1) |  | Total PU Awards |  | Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2018 | 967,049 |  |  | (299,948 | ) |  | 667,101 |  |  | $ | 36.54 |
Granted | 380,856 |  |  | — |  |  | 380,856 |  |  | 36.07 |
Vested | (206,279 | ) |  | — |  |  | (206,279 | ) |  | 37.97 |
Forfeited/Performance or Market Conditions Not Achieved | (27,935 | ) |  | (14,850 | ) |  | (42,785 | ) |  | 26.50 |
Non-vested at December 31, 2019 | 1,113,691 |  |  | (314,798 | ) |  | 798,893 |  |  | $ | 36.56 |
_______________________________________________________________________________
(1) | Represents an increase or decrease in the number of original PUs awarded based on either the final performance criteria or market condition achievement at the end of the performance period of such PUs or a change in estimated awards based on the forecasted performance against the predefined targets.
Employee Stock Purchase Plan We offer an ESPP in which participation is available to substantially all United States and Canadian employees who meet certain service eligibility requirements. The ESPP provides a way for our eligible employees to become stockholders on favorable terms. The ESPP provides for the purchase of our common stock by eligible employees through successive offering periods. We have historically had two six-month offering periods per year, the first of which generally runs from June 1 through November 30 and the second of which generally runs from December 1 through May 31. During each offering period, participating employees accumulate after-tax payroll contributions, up to a maximum of 15% of their compensation, to pay the purchase price at the end of the offering. Participating employees may withdraw from an offering before the purchase date and obtain a refund of the amounts withheld as payroll deductions. At the end of the offering period, outstanding options under the ESPP are exercised, and each employee's accumulated contributions are used to purchase our common stock. The price for shares purchased under the ESPP is 95% of the fair market price at the end of the offering period, without a look-back feature. As a result, we do not recognize compensation expense for the ESPP shares purchased. For the years ended December 31, 2019, 2018 and 2017, there were 129,505, 119,123 and 102,826 shares, respectively, purchased under the ESPP. As of December 31, 2019, we have 376,140 shares available under the ESPP. _______________________________________________________________________________ As of December 31, 2019, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards was $39,696 and is expected to be recognized over a weighted-average period of 1.8 years. We issue shares of our common stock for the exercises of stock options, and the vesting of RSUs, PUs and shares of our common stock under our ESPP from unissued reserved shares. o. Income Taxes Accounting for income taxes requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax and financial reporting bases of assets and liabilities and for loss and credit carryforwards. Valuation allowances are provided when recovery of deferred tax assets does not meet the more likely than not standard as defined in GAAP. We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the Provision (benefit) for income taxes in the accompanying Consolidated Statements of Operations. p. Income (Loss) Per Share—Basic and Diluted Basic income (loss) per common share is calculated by dividing income (loss) by the weighted average number of common shares outstanding. The calculation of diluted income (loss) per share is consistent with that of basic income (loss) per share but gives effect to all potential common shares (that is, securities such as stock options, RSUs, PUs, warrants or convertible securities) that were outstanding during the period, unless the effect is antidilutive. The calculation of basic and diluted income (loss) per share for the years ended December 31, 2019, 2018 and 2017 is as follows:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Income (loss) from continuing operations | $ | 268,211 |  |  | $ | 367,558 |  |  | $ | 178,015 |
Less: Net income (loss) attributable to noncontrolling interests | 938 |  |  | 1,198 |  |  | 1,611 |
Income (loss) from continuing operations (utilized in numerator of Earnings Per Share calculation) | 267,273 |  |  | 366,360 |  |  | 176,404 |
Income (loss) from discontinued operations, net of tax | 104 |  |  | (12,427 | ) |  | (6,291 | )
Net income (loss) attributable to Iron Mountain Incorporated | $ | 267,377 |  |  | $ | 353,933 |  |  | $ | 170,113 |
Weighted-average shares—basic | 286,971,000 |  |  | 285,913,000 |  |  | 265,898,000 |
Effect of dilutive potential stock options | 145,509 |  |  | 234,558 |  |  | 431,071 |
Effect of dilutive potential RSUs and PUs | 570,435 |  |  | 505,030 |  |  | 509,235 |
Effect of Over-Allotment Option(1) | — |  |  | — |  |  | 6,278 |
Weighted-average shares—diluted | 287,686,944 |  |  | 286,652,588 |  |  | 266,844,584 |
Earnings (losses) per share—basic: |  |  |  |  |  |  |  |
Income (loss) from continuing operations | $ | 0.93 |  |  | $ | 1.28 |  |  | $ | 0.66 |
(Loss) income from discontinued operations, net of tax | — |  |  | (0.04 | ) |  | (0.02 | )
Net income (loss) attributable to Iron Mountain Incorporated(2) | $ | 0.93 |  |  | $ | 1.24 |  |  | $ | 0.64 |
Earnings (losses) per share—diluted: |  |  |  |  |  |  |  |
Income (loss) from continuing operations | $ | 0.93 |  |  | $ | 1.28 |  |  | $ | 0.66 |
(Loss) income from discontinued operations, net of tax | — |  |  | (0.04 | ) |  | (0.02 | )
Net income (loss) attributable to Iron Mountain Incorporated(2) | $ | 0.93 |  |  | $ | 1.23 |  |  | $ | 0.64 |
Antidilutive stock options, RSUs and PUs, excluded from the calculation | 4,475,745 |  |  | 3,258,078 |  |  | 2,326,344 |
___________________________________________________________________
(1) | See Note 12.
(2) Columns may not foot due to rounding. q. Allowance for Doubtful Accounts and Credit Memo Reserves We maintain an allowance for doubtful accounts and credit memos for estimated losses resulting from the potential inability of our customers to make required payments and potential disputes regarding billing and service issues. When calculating the allowance, we consider our past loss experience, current and prior trends in our aged receivables and credit memo activity, current economic conditions and specific circumstances of individual receivable balances. If the financial condition of our customers were to significantly change, resulting in a significant improvement or impairment of their ability to make payments, an adjustment of the allowance may be required. We write-off uncollectible balances as circumstances warrant, generally, no later than one year past due. Rollforward of allowance for doubtful accounts and credit memo reserves is as follows:
Year Ended December 31, |  | Balance at Beginning of the Year |  | Credit Memos Charged to Revenue |  | Allowance for Bad Debts Charged to Expense |  | Deductions and Other(1) |  | Balance at End of the Year
2019 |  | $ | 43,584 |  |  | $ | 51,846 |  |  | $ | 19,389 |  |  | $ | (71,963 | ) |  | $ | 42,856 |
2018 |  | 46,648 |  |  | 36,329 |  |  | 18,625 |  |  | (58,018 | ) |  | 43,584 |
2017 |  | 44,290 |  |  | 38,966 |  |  | 14,826 |  |  | (51,434 | ) |  | 46,648 |
_______________________________________________________________________________ (1) Primarily consists of the issuance of credit memos, the write-off of accounts receivable and the impact associated with currency translation adjustments. r. Concentrations of Credit Risk Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents (including money market funds and time deposits) and accounts receivable. The only significant concentrations of liquid investments as of December 31, 2019 and 2018, respectively, related to cash and cash equivalents. At December 31, 2019, we had money market funds with seven "Triple A" rated money market funds and no time deposits. At December 31, 2018, we had no money market funds and time deposits with seven global banks. As per our risk management investment policy, we limit exposure to concentration of credit risk by limiting the amount invested in any one mutual fund to a maximum of 1% of the fund total assets or in any one financial institution to a maximum of $75,000. As of December 31, 2019 and 2018, our cash and cash equivalents balance, including restricted cash, was $193,555 and $165,485, respectively. At December 31, 2019, our cash and cash equivalents included money market funds of $13,653. s. Fair Value Measurements Entities are permitted under GAAP to elect to measure certain financial instruments and certain other items at either fair value or cost. We have elected the cost measurement option. Our financial assets or liabilities that are carried at fair value are required to be measured using inputs from the three levels of the fair value hierarchy. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date. Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3—Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. The assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2019 and 2018, respectively, are as follows:
|  |  |  | Fair Value Measurements at December 31, 2019 Using
Description |  | Total Carrying Value at December 31, 2019 |  | Quoted prices in active markets (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant unobservable inputs (Level 3)
Money Market Funds(1) |  | $ | 13,653 |  |  | $ | — |  |  | $ | 13,653 |  |  | $ | — |
Trading Securities |  | 10,732 |  |  | 10,168 |  | (2) | 564 |  | (3) | — |
Derivative Liabilities(4) |  | 9,756 |  |  | — |  |  | 9,756 |  |  | — |
|  |  |  | Fair Value Measurements at December 31, 2018 Using
Description |  | Total Carrying Value at December 31, 2018 |  | Quoted prices in active markets (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant unobservable inputs (Level 3)
Time Deposits(1) |  | $ | 956 |  |  | $ | — |  |  | $ | 956 |  |  | $ | — |
Trading Securities |  | 10,753 |  |  | 10,248 |  | (2) | 505 |  | (3) | — |
Derivative Assets(4) |  | 93 |  |  | — |  |  | 93 |  |  | — |
Derivative Liabilities(4) |  | 973 |  |  | — |  |  | 973 |  |  | — |
_____________________________________________________________
(1) | Money market funds and time deposits are measured based on quoted prices for similar assets and/or subsequent transactions.
(2) | Certain trading securities are measured at fair value using quoted market prices.
(3) | Certain trading securities are measured based on inputs other than quoted market prices that are observable.
(4) | Derivative assets and liabilities include (i) interest rate swap agreements, including forward-starting interest rate swap agreements, to limit our exposure to changes in interest rates on a portion of our floating rate indebtedness, (ii) cross-currency swap agreements to hedge the variability of exchange rates impacts between the United States dollar and the Euro and certain of our Euro denominated subsidiaries and (iii) short-term (six months or less) foreign exchange currency forward contracts that we have entered into to hedge certain of our foreign exchange intercompany exposures. Our derivative financial instruments are measured using industry standard valuation models using market-based observable inputs, including interest rate curves, forward and spot prices for currencies and implied volatilities. Credit risk is also factored into the determination of the fair value of our derivative financial instruments. See Note 3 for additional information on our derivative financial instruments.
Disclosures are required in the financial statements for items measured at fair value on a non-recurring basis. We did not have any material items that are measured at fair value on a non-recurring basis for the years ended December 31, 2019, 2018, and 2017, with the exception of: (i) the reporting units as presented in our goodwill impairment analysis (as disclosed in Note 2.h.); (ii) the assets and liabilities acquired through acquisitions (as disclosed in Note 6); (iii) the Access Contingent Consideration (as defined and disclosed in Note 13); (iv) the redemption value of certain redeemable noncontrolling interests (as disclosed in Note 2.v.); and (v) our initial investments in the MakeSpace JV and OSG (both as defined and disclosed in Note 13), all of which are based on Level 3 inputs. The fair value of our long-term debt, which was determined based on either Level 1 inputs or Level 3 inputs, is disclosed in Note 4. Long-term debt is measured at cost in our Consolidated Balance Sheets as of December 31, 2019 and 2018. t. Accumulated Other Comprehensive Items, Net The changes in accumulated other comprehensive items, net for the years ended December 31, 2019, 2018 and 2017 are as follows:
| Foreign Currency Translation Adjustment |  | Change in Fair Value of Derivative Instruments |  | Total
Balance as of December 31, 2016 | $ | (212,573 | ) |  | $ | — |  |  | $ | (212,573 | )
Other comprehensive (loss) income: |  |  |  |  |
Foreign currency translation adjustment(1) | 108,584 |  |  | — |  |  | 108,584 |
Total other comprehensive (loss) income | 108,584 |  |  | — |  |  | 108,584 |
Balance as of December 31, 2017 | (103,989 | ) |  | — |  |  | (103,989 | )
Other comprehensive (loss) income: |  |  |  |  |  |  |
Foreign currency translation adjustment | (160,702 | ) |  | — |  |  | (160,702 | )
Change in fair value of derivative instruments | — |  |  | (973 | ) |  | (973 | )
Total other comprehensive (loss) income | (160,702 | ) |  | (973 | ) |  | (161,675 | )
Balance as of December 31, 2018 | (264,691 | ) |  | (973 | ) |  | (265,664 | )
Other comprehensive (loss) income: |  |  |  |  |  |  |
Foreign currency translation adjustment | 11,866 |  |  | — |  |  | 11,866 |
Change in fair value of derivative instruments | — |  |  | (8,783 | ) |  | (8,783 | )
Total other comprehensive (loss) income | 11,866 |  |  | (8,783 | ) |  | 3,083 |
Balance as of December 31, 2019 | $ | (252,825 | ) |  | $ | (9,756 | ) |  | $ | (262,581 | )
______________________________________________________________ (1) During the year ended December 31, 2017, approximately $29,100 of cumulative translation adjustment associated with our businesses in Russia and Ukraine was reclassified from accumulated other comprehensive items, net and was included in the gain on sale associated with the Russia and Ukraine Divestment (see Note 13). u. Other Expense (Income), Net Other expense (income), net for the years ended December 31, 2019, 2018 and 2017 consists of the following:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Foreign currency transaction losses (gains), net(1) | $ | 24,852 |  |  | $ | (15,567 | ) |  | $ | 43,248 |
Debt extinguishment expense, net | — |  |  | — |  |  | 78,368 |
Other, net(2) | 9,046 |  |  | 3,875 |  |  | (42,187 | )
Other Expense (Income), Net | $ | 33,898 |  |  | $ | (11,692 | ) |  | $ | 79,429 |
_______________________________________________________________________________
(1) | The gain or loss on foreign currency transactions, calculated as the difference between the historical exchange rate and the exchange rate at the applicable measurement date, includes gains or losses primarily related to (i) borrowings in certain foreign currencies under our Revolving Credit Facility and our Former Revolving Credit Facility (each as defined in Note 4), (ii) our Euro Notes (as defined in Note 4), (iii) certain foreign currency denominated intercompany obligations of our foreign subsidiaries to us and between our foreign subsidiaries, which are not considered permanently invested and (iv) amounts that are paid or received on the net settlement amount from forward contracts (as more fully discussed in Note 3).
(2) Other, net for the year ended December 31, 2017 includes a gain of $38,869 associated with the Russia and Ukraine Divestment (as defined in Note 13). v. Redeemable Noncontrolling Interests Certain unaffiliated third parties own noncontrolling interests in our consolidated subsidiaries in Chile, India and South Africa. The underlying agreements between us and our noncontrolling interest shareholders for these subsidiaries contain provisions under which the noncontrolling interest shareholders can require us to purchase their respective interests in such subsidiaries at certain times and at a purchase price as stipulated in the underlying agreements (generally at fair value). These put options make these noncontrolling interests redeemable and, therefore, these noncontrolling interests are classified as temporary equity outside of stockholders' equity. Redeemable noncontrolling interests are reported at the higher of their redemption value or the noncontrolling interest holders' proportionate share of the underlying subsidiaries net carrying value. Increases or decreases in the redemption value of the noncontrolling interest are offset against Additional Paid-in Capital. In 2018, certain of our noncontrolling interest shareholders exercised their option to put their ownership interest back to us. Upon the exercise of the put option, this noncontrolling interest became mandatorily redeemable by us, and, therefore, is accounted for as a liability rather than a component of redeemable noncontrolling interests. We and these noncontrolling interest shareholders are currently in a dispute with respect to the fair value of the noncontrolling interest shares. We have recorded our estimate of the fair value of these noncontrolling interest shares as a component of Accrued expenses on our Consolidated Balance Sheets as of December 31, 2019 and 2018. It is possible that the value ultimately agreed upon with the noncontrolling interest shareholders could differ from our current estimate of the fair value. Subsequent to these noncontrolling interest shares becoming mandatorily redeemable, any increase or decrease in the fair value of such noncontrolling interest is included as a component of Other expense (income), net on our Consolidated Statements of Operations. w. New Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) ("ASU 2018-15"). ASU 2018-15 aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. We adopted ASU 2018-15 on January 1, 2019. ASU 2018-15 did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02. We adopted ASU 2016-02 on January 1, 2019 on a modified retrospective basis. See Note 2.m. for information regarding the impact of the adoption of ASU 2016-02 on our consolidated financial statements. Other As Yet Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes how entities will measure credit losses on most financial assets. The standard will eliminate the probable initial recognition of estimated losses and will provide a forward-looking expected credit loss model for accounts receivables, loans and other financial instruments. Adoption of the standard will be applied using a modified retrospective approach through a cumulative adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. ASU 2016-13 is effective for us on January 1, 2020, with early adoption permitted. Under ASU 2016-13 we will be required to use a forward-looking expected credit loss model for accounts receivable, loans and other financial instruments. We do not expect ASU 2016-13 will have a material impact on our consolidated financial statements. x. Changes in Presentation During 2019, we changed our presentation of Significant Acquisition Costs (as defined below) and corrected the presentation of gains on sale of real estate as presented in our Consolidated Statements of Operations. Significant Acquisition Costs We have historically classified our significant acquisition costs which represent operating expenditures associated with (1) the acquisition of Recall Holdings Limited ("Recall") that we completed on May 2, 2016 (the "Recall Transaction"), including: (i) advisory and professional fees to complete the Recall Transaction; (ii) costs associated with the Divestments (as defined in Note 13) required in connection with receipt of regulatory approvals (including transitional services); and (iii) costs to integrate Recall with our existing operations, including moving, severance, facility upgrade, REIT integration and system upgrade costs, as well as certain costs associated with our shared service center initiative for our finance, human resources and information technology functions; and (2) the advisory and professional fees to complete the IODC Transaction (as defined in Note 6) (collectively, "Significant Acquisition Costs"), as components of Selling, general and administrative expenses and Cost of sales. Beginning in 2019, we present Significant Acquisition Costs as its own line item within Operating Expenses in our Consolidated Statements of Operations. All prior periods have been conformed to this presentation. See Note 9 for Significant Acquisition Costs by segment. Gains on Sale of Real Estate Subsequent to our conversion to a REIT, we have historically classified gains on sale of real estate, net of tax, as a separate line on our Consolidated Statements of Operations and excluded such amounts from our reported operating income. We presented such amounts net of tax as these gains were presented below the Provision (benefit) for income taxes in our Consolidated Statements of Operations. Beginning in 2019, we present gains on sale of real estate as a component of operating income in the line item (Gain) loss on disposal/write-down of property, plant and equipment, net. Such amounts are presented gross of tax with any tax impact presented within Provision (benefit) for income taxes in our Consolidated Statements of Operations. All prior periods have been conformed to this presentation. See Note 2.g. for details of the (Gain) loss on disposal/write-down of property, plant and equipment. The following table sets forth the effect of the (i) change in presentation of Significant Acquisition Costs and (ii) correction in presentation of gain on sale of real estate to certain line items of our Consolidated Statements of Operations for December 31, 2018 and 2017. The effect of these items did not impact Income (Loss) from Continuing Operations or Net Income (Loss).
|  | Year Ended December 31,
|  | 2018 |  | 2017
|  | Significant Acquisition Costs |  | Gain on Sale of Real Estate |  | Total |  | Significant Acquisition Costs |  | Gain on Sale of Real Estate |  | Total
Cost of sales (excluding depreciation and amortization) |  | $ | (7,628 | ) |  | $ | — |  |  | $ | (7,628 | ) |  | $ | (20,493 | ) |  | $ | — |  |  | $ | (20,493 | )
Selling, general and administrative |  | $ | (43,037 | ) |  | $ | — |  |  | $ | (43,037 | ) |  | $ | (64,408 | ) |  | $ | — |  |  | $ | (64,408 | )
Significant Acquisition Costs |  | $ | 50,665 |  |  | $ | — |  |  | $ | 50,665 |  |  | $ | 84,901 |  |  | $ | — |  |  | $ | 84,901 |
(Gain) Loss on disposal/write-down of property, plant and equipment, net |  | $ | — |  |  | $ | (63,804 | ) |  | $ | (63,804 | ) |  | $ | — |  |  | $ | (1,565 | ) |  | $ | (1,565 | )
Total Operating Expenses |  | $ | — |  |  | $ | (63,804 | ) |  | $ | (63,804 | ) |  | $ | — |  |  | $ | (1,565 | ) |  | $ | (1,565 | )
Operating Income (Loss) |  | $ | — |  |  | $ | 63,804 |  |  | $ | 63,804 |  |  | $ | — |  |  | $ | 1,565 |  |  | $ | 1,565 |
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes |  | $ | — |  |  | $ | 63,804 |  |  | $ | 63,804 |  |  | $ | — |  |  | $ | 1,565 |  |  | $ | 1,565 |
Provision (Benefit) for Income Taxes |  | $ | — |  |  | $ | 8,476 |  |  | $ | 8,476 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Gain on Sale of Real Estate, Net of tax |  | $ | — |  |  | $ | 55,328 |  |  | $ | 55,328 |  |  | $ | — |  |  | $ | 1,565 |  |  | $ | 1,565 |
Immaterial Restatement In June 2019, we received a notification of assessment from tax and customs authorities in the Netherlands related to a value-added tax (“VAT”) liability of approximately 16,800 Euros primarily related to the years ending December 31, 2018 and 2017. We have established a reserve for this matter based upon our estimate of the amount of loss that is both probable and estimable, including interest and penalties. See Note 10 for additional information on this matter. This matter relates to periods prior to January 1, 2019, resulting in (i) an understatement of our prior years' reported selling, general and administrative expense and interest expense and (ii) an overstatement of our prior years’ reported provision for income taxes for the related tax impact. The following table sets forth the effect of the immaterial restatement to certain line items of our Consolidated Statements of Operations for the years ended December 31, 2018 and 2017:
| Year Ended December 31,
| 2018 |  | 2017
Selling, general and administrative | $ | 11,045 |  |  | $ | 16,623 |
Total Operating Expenses | $ | 11,045 |  |  | $ | 16,623 |
Operating Income (Loss) | $ | (11,045 | ) |  | $ | (16,623 | )
Interest Expense, Net | $ | 359 |  |  | $ | 70 |
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes | $ | (11,404 | ) |  | $ | (16,693 | )
Provision (Benefit) for Income Taxes | $ | (1,986 | ) |  | $ | (2,985 | )
Income (Loss) from Continuing Operations | $ | (9,418 | ) |  | $ | (13,708 | )
Net Income (Loss) | $ | (9,418 | ) |  | $ | (13,708 | )
Net Income (Loss) Attributable to Iron Mountain Incorporated | $ | (9,418 | ) |  | $ | (13,708 | )
Earnings (Losses) per Share - Basic: |  |  |
Income (Loss) from Continuing Operations | $ | (0.03 | ) |  | $ | (0.05 | )
Net Income (Loss) Attributable to Iron Mountain Incorporated | $ | (0.03 | ) |  | $ | (0.05 | )
Earnings (Losses) per Share - Diluted: |  |  |
Income (Loss) from Continuing Operations | $ | (0.03 | ) |  | $ | (0.05 | )
Net Income (Loss) Attributable to Iron Mountain Incorporated | $ | (0.03 | ) |  | $ | (0.05 | )
We have determined that no prior period financial statement was materially misstated as a result of the previously unrecorded reserves related to this matter. As a result, we have restated ending (Distributions in excess of earnings) Earnings in excess of distributions in the amount of $(23,126) and $(13,708) as of December 31, 2018 and 2017, respectively, for the cumulative impact of the aforementioned items. Additionally, we have restated our Consolidated Balance Sheets as of December 31, 2018 and 2017, and each of our Consolidated Statements of Operations, our Consolidated Statements of Comprehensive Income (Loss), our Consolidated Statements of Equity and the related notes for the years ended December 31, 2018 and 2017 to reflect the impact of the reserve we have established for this matter in those periods. There was no change to the following lines of the Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017: (1) cash flows from operating activities, (2) cash flows from investing activities and (3) cash flows from financing activities. The following table sets forth the effect of the immaterial restatement to certain line items of our Consolidated Balance Sheet as of December 31, 2018:
| December 31, 2018
Total Other Assets, Net | $ | 4,971 |
Total Assets | $ | 4,971 |
Accrued expenses and other current liabilities | $ | 28,097 |
Total Current Liabilities | $ | 28,097 |
(Distribution in excess of earnings) Earnings in excess of distributions | $ | (23,126 | )
Total Iron Mountain Incorporated Stockholders' Equity | $ | (23,126 | )

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- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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