This Note 2 to Notes to Consolidated Financial Statements provides information and disclosure regarding certain of our significant accounting policies and should be read in conjunction with Note 2 to Notes to Consolidated Financial Statements included in our Annual Report, which may provide additional information with regard to the accounting policies set forth herein and other of our significant accounting policies.

a. Foreign Currency

Local currencies are the functional currencies for our operations outside the United States, with the exception of certain foreign holding companies and our financing centers in Europe, 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 items, net component of Iron Mountain Incorporated Stockholders' Equity and Noncontrolling Interests in the accompanying Consolidated Balance Sheets. 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, including those related to (1) our previously outstanding 6³/₄% Euro Senior Subordinated Notes due 2018 (the "6³/₄% Notes"), (2) borrowings in certain foreign currencies under our Revolving Credit Facility (as defined in Note 5) and (3) certain foreign currency denominated intercompany obligations of our foreign subsidiaries to us and between our foreign subsidiaries, which are not considered permanently invested, are included in Other Expense (Income), Net, in the accompanying Consolidated Statements of Operations.

Total loss on foreign currency transactions for the three and nine months ended September 30, 2015 and 2016 is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Total loss on foreign currency transactions	$	32,539	$	10,685	$	56,461	$	15,336

b. Goodwill and Other Intangible Assets

Goodwill and indefinite-lived intangible assets

We have selected October 1 as our annual goodwill impairment review date. We performed our most recent annual goodwill impairment review as of October 1, 2015 and concluded there was no impairment of goodwill at such date. As of December 31, 2015, no factors were identified that would alter our October 1, 2015 goodwill analysis. While several of our reporting units were impacted by our acquisition of Recall, no factors were identified as of September 30, 2016 that would indicate an impairment of goodwill. In making this assessment, we considered a number of factors including operating results, business plans, anticipated future cash flows, transactions and marketplace data. There are inherent uncertainties related to these factors and our judgment in applying them to the analysis of goodwill impairment. When changes occur in the composition of one or more reporting units, the goodwill is reassigned to the reporting units affected based on their relative fair values.

Refer to our Annual Report for information regarding the composition of our reporting units as of December 31, 2015. The carrying value of goodwill, net for each of our reporting units as of December 31, 2015 was as follows:



	Carrying Value as of December 31, 2015
North American Records and Information Management(1)	$	1,342,723
North American Secure Shredding(1)	73,021
North American Data Management(2)	369,907
Adjacent Businesses - Data Centers(3)	—
Adjacent Businesses - Consumer Storage(3)	4,636
Adjacent Businesses - Fine Arts(3)	21,550
UKI(4)	260,202
Continental Western Europe(4)	63,442
Emerging Markets - Europe(5)	87,378
Latin America(5)	78,537
Australia(5)	47,786
Southeast Asia(5)	5,683
India(5)	6,113
Total	$	2,360,978

_______________________________________________________________________________


(1)	This reporting unit is included in the North American Records and Information Management Business segment.


(2)	This reporting unit is included in the North American Data Management Business segment.


(3)	This reporting unit is included in the Corporate and Other Business segment.


(4)	This reporting unit is included in the Western European Business segment.


(5)	This reporting unit is included in the Other International Business segment.

In the third quarter of 2016, as a result of changes in the management of our businesses included in our Western European Business segment, we reassessed the composition of our reporting units. As a result of this reassessment, we determined that the businesses included in our former UKI reporting unit were now being managed in conjunction with the businesses included in our former Continental Western Europe reporting unit. As a result, as of September 30, 2016, we have concluded that our Western European Business segment consists of one reporting unit, which is referred to herein as the Western Europe reporting unit.

The acquisition of Recall, which is more fully disclosed in Note 4, impacted our reporting units as of September 30, 2016 as follows:


•	North American Records and Information Management - includes the goodwill associated with the records and information management businesses of Recall in the United States and Canada.


•	North American Secure Shredding - includes the goodwill associated with the secure shredding businesses of Recall in the United States and Canada.


•	North American Data Management - includes the goodwill associated with the data management businesses of Recall in the United States and Canada.


•	Western Europe - includes the goodwill associated with the operations of Recall in Belgium, France, Germany, Spain, Switzerland and the United Kingdom as well as the goodwill associated with the document management solutions (“DMS”) operations of Recall in Sweden.

•

Northern and Eastern Europe - this reporting unit consists of our former Emerging Markets - Europe reporting unit (as described in our Annual Report), and includes the goodwill associated with the operations of Recall in Denmark, Finland and Norway, as well as the goodwill associated with the records and information management operations of Recall in Sweden. This reporting unit is included in the Other International Business segment.


•	Latin America - includes the goodwill associated with the operations of Recall in Brazil and Mexico.


•	Australia and New Zealand - this reporting unit consists of the goodwill associated with the Australia Retained Business (as defined in Note 4), which was a component of our former Australia reporting unit, as well as the operations of Recall in Australia and New Zealand. This reporting unit is included in the Other International Business segment.


•	Southeast Asia - includes the goodwill associated with the operations of Recall in China, Hong Kong, Malaysia, Singapore, Taiwan and Thailand.


•	Africa and India - includes the goodwill associated with the operations of Recall in India.

The carrying value of goodwill, net for each of our reporting units as of September 30, 2016 is as follows:



	Carrying Value as of September 30, 2016
North American Records and Information Management	$	2,058,150
North American Secure Shredding	148,905
North American Data Management	499,644
Adjacent Businesses - Data Centers	—
Adjacent Businesses - Consumer Storage	4,636
Adjacent Businesses - Fine Arts	22,911
Western Europe	454,531
Northern and Eastern Europe(1)	142,285
Latin America	180,664
Australia and New Zealand	152,387
Southeast Asia	177,512
Africa and India(2)	20,185
Total	$	3,861,810

_______________________________________________________________________________

(1) Included in this reporting unit at September 30, 2016 is the goodwill associated with our March 2016 acquisition of Archyvu Sistemos as more fully disclosed in Note 4.

(2) Included in this reporting unit at September 30, 2016 is the goodwill associated with our March 2016 acquisition of Docufile Holdings Proprietary Limited as more fully disclosed in Note 4.

The changes in the carrying value of goodwill attributable to each reportable operating segment for the nine months ended September 30, 2016 are as follows:



	North American Records and Information Management Business			North American Data Management Business		Western European Business			Other International Business			Corporate and Other Business		Total Consolidated
Gross Balance as of December 31, 2015	$	1,620,425		$	423,606	$	381,149		$	225,626		$	26,186	$	2,676,992
Deductible goodwill acquired during the year	—			—		—			—			—		—
Non-deductible goodwill acquired during the year	790,250			128,669		161,005			474,576			215		1,554,715
Goodwill reclassified as assets held for sale (see Note 10)	(3,332		)	—		—			(40,089		)	—		(43,421		)
Fair value and other adjustments(1)	(157		)	—		—			(486		)	1,146		503
Currency effects	4,921			1,161		(30,939		)	13,462			—		(11,395		)
Gross Balance as of September 30, 2016	$	2,412,107		$	553,436	$	511,215		$	673,089		$	27,547	$	4,177,394
Accumulated Amortization Balance as of December 31, 2015	$	204,681		$	53,699	$	57,505		$	129		$	—	$	316,014
Currency effects	371			93		(821		)	(73		)	—		(430		)
Accumulated Amortization Balance as of September 30, 2016	$	205,052		$	53,792	$	56,684		$	56		$	—	$	315,584
Net Balance as of December 31, 2015	$	1,415,744		$	369,907	$	323,644		$	225,497		$	26,186	$	2,360,978
Net Balance as of September 30, 2016	$	2,207,055		$	499,644	$	454,531		$	673,033		$	27,547	$	3,861,810
Accumulated Goodwill Impairment Balance as of December 31, 2015	$	85,909		$	—	$	46,500		$	—		$	—	$	132,409
Accumulated Goodwill Impairment Balance as of September 30, 2016	$	85,909		$	—	$	46,500		$	—		$	—	$	132,409

_______________________________________________________________________________


(1)	Total fair value and other adjustments primarily include net adjustments of $685 related to property, plant and equipment and customer relationship intangible assets, partially offset by $182 of cash received related to certain acquisitions completed in 2015.

Finite-lived 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. The value of customer relationship intangible assets is calculated based upon estimates of their fair value utilizing an income approach based on the present value of expected future cash flows.

Costs related to the acquisition of large volume accounts are capitalized. Free intake costs to transport boxes to one of our facilities, which include labor and transportation charges ("Move Costs"), are amortized over periods ranging from one to 30 years, and are included in depreciation and amortization in the accompanying Consolidated Statements of Operations. 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 one to 15 years and are included in storage and service revenue in the accompanying Consolidated Statements of Operations. Move Costs 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.

Other intangible assets, including noncompetition agreements and trademarks, are capitalized and amortized over periods ranging from five to 10 years.

The components of our finite-lived intangible assets as of December 31, 2015 and September 30, 2016 are as follows:



	December 31, 2015							September 30, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationship intangible assets and Customer Inducements	$	937,174	$	(333,860	)	$	603,314	$	1,684,891	$	(378,880	)	$	1,306,011
Core Technology(1)	3,370		(3,370		)	—		1,625		(1,625		)	—
Trademarks and Non-Compete Agreements(1)	7,741		(4,955		)	2,786		24,448		(6,985		)	17,463
Total	$	948,285	$	(342,185	)	$	606,100	$	1,710,964	$	(387,490	)	$	1,323,474

_______________________________________________________________________________


(1)	Included in Other, a component of Other Assets, Net in the accompanying Consolidated Balance Sheets.

Amortization expense associated with finite-lived intangible assets and deferred financing costs for the three and nine months ended September 30, 2015 and 2016 is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Amortization expense associated with finite-lived intangible assets and deferred financing costs	$	13,094	$	29,899	$	39,939	$	68,857

c. 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").

Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying Consolidated Statements of Operations for the three and nine months ended September 30, 2015 was $6,159 ($4,502 after tax or $0.02 per basic and diluted share) and $20,936 ($14,915 after tax or $0.07 per basic and diluted share), respectively. Stock-based compensation expense for Employee Stock-Based Awards for the three and nine months ended September 30, 2016 was $5,957 ($4,245 after tax or $0.02 per basic and diluted share) and $21,870 ($16,170 after tax or $0.07 per basic and diluted share), respectively.

Stock-based compensation expense for Employee Stock-Based Awards included in the accompanying Consolidated Statements of Operations is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Cost of sales (excluding depreciation and amortization)	$	65	$	28	$	156	$	80
Selling, general and administrative expenses	6,094		5,929		20,780		21,790
Total stock-based compensation	$	6,159	$	5,957	$	20,936	$	21,870

The benefits associated with the tax deductions in excess of recognized compensation cost are required to be reported as financing activities in the accompanying Consolidated Statements of Cash Flows. This requirement impacts reported operating cash flows and reported financing cash flows. As a result, net financing cash flows included $323 and $91 for the nine months ended September 30, 2015 and 2016, respectively, from the benefit of tax deductions compared to recognized compensation cost. The tax benefit of any resulting excess tax deduction increases the Additional Paid-in Capital ("APIC") pool. Any resulting tax deficiency is deducted from the APIC pool.

Stock Options

A summary of our stock options outstanding as of September 30, 2016 by vesting terms is as follows:



	September 30, 2016
	Stock Options Outstanding	% of Stock Options Outstanding
Three-year vesting period (10 year contractual life)	2,826,698	76.3	%
Five-year vesting period (10 year contractual life)	622,057	16.8	%
Ten-year vesting period (12 year contractual life)	255,255	6.9	%
	3,704,010

The weighted average fair value of stock options granted for the nine months ended September 30, 2015 and 2016 was $4.88 and $2.55 per share, respectively. These values were estimated on the date of grant using the Black-Scholes stock option pricing model. The weighted average assumptions used for grants in the respective period are as follows:



	Nine Months Ended September 30,
Weighted Average Assumptions	2015		2016
Expected volatility	28.4	%	27.2	%
Risk-free interest rate	1.70	%	1.32	%
Expected dividend yield	5	%	7	%
Expected life	5.5 years		5.6 years

Expected volatility is calculated utilizing daily historical volatility over a period that equates to the expected life of the stock 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 stock 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 nine months ended September 30, 2016 is as follows:



	Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Average Intrinsic Value
Outstanding at December 31, 2015	3,688,814		$	27.79
Granted	1,435,879		34.02
Exercised	(1,373,290	)	24.12
Forfeited	(35,927	)	32.43
Expired	(11,466	)	30.50
Outstanding at September 30, 2016	3,704,010		$	31.51	7.08	$	26,628
Options exercisable at September 30, 2016	1,553,980		$	26.08	4.54	$	19,208
Options expected to vest	2,025,402		$	35.44	8.91	$	7,020

The aggregate intrinsic value of stock options exercised for the three and nine months ended September 30, 2015 and 2016 is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Aggregate intrinsic value of stock options exercised	$	1,985	$	5,433	$	7,868	$	16,792

Restricted Stock Units

Under our various equity compensation plans, we may also grant RSUs. Our RSUs generally have a vesting period of between three and five years from the date of grant. However, RSUs granted to our non-employee directors in 2015 and thereafter 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 three and nine months ended September 30, 2015 and 2016 are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Cash dividends accrued on RSUs	$	616	$	620	$	1,917	$	1,867
Cash dividends paid on RSUs	270		129		2,570		1,960

The fair value of RSUs vested during the three and nine months ended September 30, 2015 and 2016 is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Fair value of RSUs vested	$	2,377	$	1,486	$	21,561	$	19,271

A summary of RSU activity for the nine months ended September 30, 2016 is as follows:



	RSUs		Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2015	1,217,597		$	33.68
Granted	671,385		32.36
Vested	(575,875	)	33.47
Forfeited	(59,627	)	33.74
Non-vested at September 30, 2016	1,253,480		$	33.07

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"). 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 a subset of the Standard & Poor's 500 Index rather than the revenue and ROIC 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. PUs awarded 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 three and nine months ended September 30, 2015 and 2016 are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Cash dividends accrued on PUs	$	222	$	264	$	647	$	789
Cash dividends paid on PUs	—		—		1,015		645

During the nine months ended September 30, 2016, we issued 230,052 PUs. The majority of our PUs are earned based on our performance against revenue and ROIC targets during their applicable performance period; therefore, we forecast the likelihood of achieving the predefined revenue and ROIC targets 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. 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 September 30, 2016, we expected 0%, 50% and 100% achievement of the predefined revenue and ROIC targets associated with the awards of PUs made in 2014, 2015 and 2016, respectively.

The fair value of earned PUs that vested during the three and nine months ended September 30, 2015 and 2016 is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Fair value of earned PUs that vested	$	—	$	17	$	2,107	$	5,272

A summary of PU activity for the nine months ended September 30, 2016 is as follows:



	Original PU Awards		PU Adjustment(1)		Total PU Awards		Weighted- Average Grant-Date Fair Value
Non-vested at December 31, 2015	520,764		(86,959	)	433,805		$	34.11
Granted	230,052		—		230,052		35.84
Vested	(148,855	)	—		(148,855	)	35.42
Forfeited/Performance or Market Conditions Not Achieved	(7,690	)	(34,079	)	(41,769	)	42.87
Non-vested at September 30, 2016	594,271		(121,038	)	473,233		$	33.77

_______________________________________________________________________________


(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 price for shares purchased under the ESPP is 95% of the market price of our common stock 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 nine months ended September 30, 2015 and 2016, there were 59,569 shares and 56,662 shares, respectively, purchased under the ESPP. As of September 30, 2016, we had 781,767 shares available under the ESPP.

_______________________________________________________________________________

As of September 30, 2016, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards was $43,137 and is expected to be recognized over a weighted-average period of 2.0 years.

We generally issue shares of our common stock for the exercises of stock options, RSUs, PUs and shares of our common stock under our ESPP from unissued reserved shares.

d. 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, 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 three and nine months ended September 30, 2015 and 2016 is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Income (loss) from continuing operations	$	23,517	$	5,759	$	119,263	$	54,080
Less: Net income (loss) attributable to noncontrolling interests	407		720		1,727		1,822
Income (loss) from continuing operations (utilized in numerator of Earnings Per Share calculation)	$	23,110	$	5,039	$	117,536	$	52,258
Income (loss) from discontinued operations, net of tax	$	—	$	2,041	$	—	$	3,628
Net income (loss) attributable to Iron Mountain Incorporated	$	23,110	$	7,080	$	117,536	$	55,886

Weighted-average shares—basic	210,912,000		263,269,000		210,616,000		240,394,000
Effect of dilutive potential stock options	621,615		640,202		934,553		628,263
Effect of dilutive potential RSUs and PUs	382,995		592,773		530,252		497,658
Weighted-average shares—diluted	211,916,610		264,501,975		212,080,805		241,519,921

Earnings (losses) per share—basic:
Income (loss) from continuing operations	$	0.11	$	0.02	$	0.57	$	0.22
Income (loss) from discontinued operations, net of tax	—		0.01		—		0.02
Net income (loss) attributable to Iron Mountain Incorporated(1)	$	0.11	$	0.03	$	0.56	$	0.23

Earnings (losses) per share—diluted:
Income (loss) from continuing operations	$	0.11	$	0.02	$	0.56	$	0.22
Income (loss) from discontinued operations, net of tax	—		0.01		—		0.02
Net income (loss) attributable to Iron Mountain Incorporated(1)	$	0.11	$	0.03	$	0.55	$	0.23

Antidilutive stock options, RSUs and PUs, excluded from the calculation	2,262,827		759,478		1,318,811		1,725,249

_______________________________________________________________________________

(1) Columns may not foot due to rounding.

e. Income Taxes

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year. Discrete items and changes in our estimate of the annual effective tax rate are recorded in the period they occur. Our effective tax rate is subject to variability in the future due to, among other items: (1) changes in the mix of income between our qualified REIT subsidiaries and our domestic taxable REIT subsidiaries ("TRSs"), as well as among the jurisdictions in which we operate; (2) tax law changes; (3) volatility in foreign exchange gains and losses; (4) the timing of the establishment and reversal of tax reserves; and (5) our ability to utilize net operating losses that we generate.

Our effective tax rates for the three and nine months ended September 30, 2015 were 14.3% and 18.6%, respectively. Our effective tax rates for the three and nine months ended September 30, 2016 were 81.2% and 46.2%, respectively. The primary reconciling items between the federal statutory tax rate of 35.0% and our overall effective tax rates in the three and nine months ended September 30, 2015 were the benefit derived from the dividends paid deduction, differences in the rates of tax at which our foreign earnings are subject, including foreign exchange gains and losses in different jurisdictions with different tax rates, and state income taxes (net of federal tax benefit). In the third quarter of 2015, we recorded a tax benefit of $4,100 related to the expiration of certain statutes of limitations and an out-of-period tax adjustment ($9,000 tax benefit) to correct the valuation of certain deferred tax assets associated with the REIT conversion that occurred in 2014. The primary reconciling items between the federal statutory tax rate of 35.0% and our overall effective tax rates in the three and nine months ended September 30, 2016 were the benefit derived from the dividends paid deduction, differences in the rates of tax at which our foreign earnings are subject, including foreign exchange gains and losses in different jurisdictions with different tax rates, and the impact of the $14,000 charge (described in Note 2.i.) recorded during the third quarter of 2016 related to the anticipated loss on disposal of the Australia Divestment Business (as defined in Note 4), which had no associated tax benefit.

f. 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, 2015 and September 30, 2016 relate to cash and cash equivalents. At December 31, 2015, we had time deposits with four global banks. At September 30, 2016, we had time deposits with six global banks. We consider the global banks to be large, highly-rated investment-grade institutions. As of December 31, 2015 and September 30, 2016, our cash and cash equivalents were $128,381 and $458,128, respectively, including time deposits amounting to $18,645 and $18,687, respectively.

g. Fair Value Measurements

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 measured on a recurring basis as of December 31, 2015 and September 30, 2016, respectively, are as follows:



			Fair Value Measurements at December 31, 2015 Using
Description	Total Carrying Value at December 31, 2015		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Time Deposits(1)	$	18,645	$	—		$	18,645		$	—
Trading Securities	10,371		9,514		(2)	857		(1)	—
Available-for-Sale Securities	624		624		(2)	—			—



			Fair Value Measurements at September 30, 2016 Using
Description	Total Carrying Value at September 30, 2016		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Time Deposits(1)	$	18,687	$	—		$	18,687		$	—
Trading Securities	10,708		10,225		(2)	483		(1)	—

_______________________________________________________________________________


(1)	Time deposits and certain trading securities are measured based on quoted prices for similar assets and/or subsequent transactions and are included in Prepaid expenses and other in our Consolidated Balance Sheets.


(2)	Available-for-sale securities and certain trading securities are measured at fair value using quoted market prices.

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 at December 31, 2015 and September 30, 2016, with the exception of: (i) goodwill (as disclosed in Note 2.b.); (ii) the assets and liabilities acquired through acquisitions (as disclosed in Note 4); (iii) the Access Contingent Consideration (as defined and disclosed in Note 4); and (iv) assets and liabilities held for sale (as disclosed in Note 10), 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 5. Long-term debt is measured at cost in our Consolidated Balance Sheets as of December 31, 2015 and September 30, 2016.

h. Accumulated Other Comprehensive Items, Net

The changes in accumulated other comprehensive items, net for the three months ended September 30, 2015 and 2016, respectively, are as follows:



	Foreign Currency Translation Adjustments			Market Value Adjustments for Securities			Total
Balance as of June 30, 2015	$	(130,752	)	$	1,002		$	(129,750	)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(33,803		)	—			(33,803		)
Market value adjustments for securities	—			(134		)	(134		)
Total other comprehensive (loss) income	(33,803		)	(134		)	(33,937		)
Balance as of September 30, 2015	$	(164,555	)	$	868		$	(163,687	)



	Foreign Currency Translation Adjustments			Market Value Adjustments for Securities		Total
Balance as of June 30, 2016	$	(149,289	)	$	—	$	(149,289	)
Other comprehensive income (loss):
Foreign currency translation adjustments	10,843			—		10,843
Total other comprehensive income (loss)	10,843			—		10,843
Balance as of September 30, 2016	$	(138,446	)	$	—	$	(138,446	)

The changes in accumulated other comprehensive items, net for the nine months ended September 30, 2015 and 2016, respectively, are as follows:



	Foreign Currency Translation Adjustments			Market Value Adjustments for Securities			Total
Balance as of December 31, 2014	$	(76,010	)	$	979		$	(75,031	)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(88,545		)	—			(88,545		)
Market value adjustments for securities	—			(111		)	(111		)
Total other comprehensive (loss) income	(88,545		)	(111		)	(88,656		)
Balance as of September 30, 2015	$	(164,555	)	$	868		$	(163,687	)



	Foreign Currency Translation Adjustments			Market Value Adjustments for Securities			Total
Balance as of December 31, 2015	$	(175,651	)	$	734		$	(174,917	)
Other comprehensive income (loss):
Foreign currency translation adjustments	37,205			—			37,205
Market value adjustments for securities	—			(734		)	(734		)
Total other comprehensive income (loss)	37,205			(734		)	36,471
Balance as of September 30, 2016	$	(138,446	)	$	—		$	(138,446	)

i. Other Expense (Income), Net

Other expense (income), net for the three and nine months ended September 30, 2015 and 2016 are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2016		2015		2016
Foreign currency transaction losses (gains), net	$	32,539	$	10,685	$	56,461	$	15,336
Debt extinguishment expense	2,156		—		2,156		9,283
Other, net	551		12,617		982		12,387
	$	35,246	$	23,302	$	59,599	$	37,006

Other, net for the three and nine months ended September 30, 2016 includes a charge of $14,000 associated with the anticipated loss on disposal of the Australia Divestment Business. As disclosed in Note 10, we have determined that the Australia Divestment Business met the criteria to be reported as held for sale beginning in the second quarter of 2016. Accordingly, the Australia Divestment Business is reflected in our Consolidated Balance Sheet at the lower of its carrying value or its fair value (less costs to sell). This charge represents the excess of the carrying value of the Australia Divestment Business compared to its fair value (less costs to sell) as of September 30, 2016, based upon the sale price of the business described more fully in Note 13.

j. Property, Plant and Equipment and Long-Lived Assets

During the three and nine months ended September 30, 2015, we capitalized $6,844 and $19,279 of costs, respectively, associated with the development of internal use computer software projects. During the three and nine months ended September 30, 2016, we capitalized $3,601 and $12,139 of costs, respectively, associated with the development of internal use computer software projects.

Consolidated (gain) loss on disposal/write-down of property, plant and equipment (excluding real estate), net for the three and nine months ended September 30, 2015 was $(141) and $707, respectively. Losses in the nine months ended September 30, 2015 consisted primarily of the write-off of certain property associated with our North American Records and Information Management Business segment. Consolidated gains on disposal/write-down of property, plant and equipment (excluding real estate), net for the three and nine months ended September 30, 2016 was $54 and $1,131, respectively, which were primarily associated with the retirement of leased vehicles accounted for as capital lease assets within our North American Records and Information Management Business segment.

Consolidated gain on sale of real estate was $850, net of tax of $209, for the three and nine months ended September 30, 2015, which was associated with the sale of a building in the United Kingdom. Consolidated gain on sale of real estate for the three and nine months ended September 30, 2016 was $325, net of tax of $34, associated with the sale of land in North America.

k. New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("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. Further disclosures will be required to provide a better understanding of revenue that has been recognized and revenue that is expected to be recognized in the future from existing contracts. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ("ASU 2015-14"). ASU 2015-14 deferred the effective date of ASU 2014-09 for one year, making it effective for us on January 1, 2018, with early adoption permitted as of January 1, 2017. We will adopt ASU 2014-09 as of January 1, 2018. We are currently evaluating the impact ASU 2014-09 will have on our consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40) (“ASU 2014-15”). ASU 2014-15 requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles of current United States auditing standards. Specifically, the amendments (1) provide a definition of the term “substantial doubt”, (2) require an evaluation every reporting period, including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is still present, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). ASU 2014-15 is effective for us on January 1, 2017, with early adoption permitted. We will adopt ASU 2014-15 as of January 1, 2017. We do not believe that the adoption of ASU 2014-15 will have an impact on our consolidated financial statements.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015‑02”). ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. We adopted ASU 2015-02 on January 1, 2016. The adoption of ASU 2015-02 did not impact our consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes ("ASU 2015-17"). ASU No. 2015-17 eliminates the requirement for reporting entities to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, reporting entities will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments in ASU 2015-17 may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. ASU 2015-17 is effective for us on January 1, 2017, with early adoption permitted. We are currently evaluating the impact ASU 2015-17 will have on our consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income. The pronouncement also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for us on January 1, 2018. We do not believe that the adoption of ASU 2016-01 will have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also will require certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 will be effective for us on January 1, 2019, with early adoption permitted. We are currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting ("ASU 2016-07"). ASU 2016-07 eliminates the requirement for a reporting entity to apply the equity method of accounting retrospectively when they obtain significant influence over a previously held investment. Furthermore, under ASU 2016-07, for any available-for-sale securities that become eligible for the equity method of accounting, the unrealized gain or loss recorded within other comprehensive income (loss) associated with the securities should be recognized in earnings at the date the investment initially qualifies for the use of the equity method. We adopted ASU 2016-07 on April 1, 2016. The adoption of ASU 2016-07 did not have a material impact on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation-Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the statement of operations and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. Additionally, under ASU 2016-09, excess tax benefits should be classified along with other income tax cash flows as an operating activity. ASU 2016-09 will be effective for us on January 1, 2017, with early adoption permitted. We are currently evaluating the impact ASU 2016-09 will have on our consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses eight specific cash flow changes with the objective of reducing the existing diversity in the practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We adopted ASU 2016-15 during the third quarter of 2016. ASU 2016-15 did not have an impact on our consolidated financial statements.