Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Outstanding Stock Options

The following table summarizes information about outstanding stock options as of December 31, 2012:

	Outstanding						Exercisable
Range of exercise prices	Number of shares		Weighted- average remaining contractual life (years)		Weighted- average exercise price		Number of shares		Weighted- average exercise price
$0.06 to $41.93		40,197		2.72	$	30.71		32,563	$	30.82
$42.53 to $50.67		36,771		2.03		45.11		36,771		45.11
$52.85 to 57.42		36,026		0.63		53.48		36,026		53.48
$58.00 to $74.91		20,005		1.64		68.86		19,521		68.76
$75.38 to $75.38		57,937		1.00		75.38		57,937		75.38
$78.72 to $87.54		41,620		2.93		85.94		41,620		85.94
$89.63 to $94.98		37,152		4.41		93.80		37,152		93.80
$95.79 to $112.41		26,821		2.09		102.20		26,821		102.20
		296,529		2.16		68.68		288,411		69.70

Schedule of Additional Disclosure for Stock Options

The Company provides the following additional disclosures for stock options as of December 31 (dollars in thousands):

	2012		2011		2010
Total fair value of stock options vested	$	1,111	$	5,183	$	15,456
Total aggregate intrinsic value of stock options exercised (1)		54,761		19,765		29,379

(1) The intrinsic value is calculated as the difference between the market value of the stock on the date of exercise and the exercise price of the option.

Activity of Restricted Shares, Vested

The activity of these restricted shares is as follows:

	Number of shares outstanding			Weighted-average grant date fair value per share
Restricted shares outstanding, December 31, 2009		116,500		$	66.09
Restricted shares released, vested		(85,166	)		65.54
Restricted shares outstanding, December 31, 2010		31,334			72.30
Restricted shares released, vested		(23,834	)		68.67
Restricted shares outstanding, December 31, 2011		7,500			83.84
Restricted shares released, vested		(7,500	)		83.84
Restricted shares outstanding, December 31, 2012		—			—

Summary of Restricted Stock Unit Activity

The Company generally grants restricted stock units that have a service condition only or have both a service and performance condition. Each restricted stock unit is not considered issued and outstanding and does not have voting rights until it is converted into one share of the Company’s common stock upon vesting. Restricted stock unit activity is summarized as follows:

	Number of shares outstanding			Weighted- average grant date fair value per share		Weighted- average remaining contractual life (years)		Aggregate intrinsic value (2) (dollars in thousands)
Restricted stock units outstanding at December 31, 2009		1,223,552		$	62.18
Restricted stock units granted (1)		948,442			98.24
Restricted stock units released, vested		(574,918	)		68.70
Restricted stock units canceled		(130,734	)		87.67
Restricted stock units outstanding at December 31, 2010		1,466,342			80.68
Restricted stock units granted		1,039,259			88.53
Restricted stock units released, vested		(684,259	)		79.88
Restricted stock units canceled		(143,077	)		86.43
Restricted stock units outstanding at December 31, 2011		1,678,265			85.37
Restricted stock units granted		821,885			148.93
Restricted stock units released, vested		(777,256	)		88.44
Restricted stock units canceled		(139,054	)		103.93
Restricted stock units outstanding at December 31, 2012		1,583,840			115.22		1.17	$	326,588

(1) Includes 98,509 restricted stock units issued in connection with the Switch and Data Acquisition (see Note 2, “Switch and Data Acquisition”).

(2) The intrinsic value is calculated based on the market value of the stock as of December 31, 2012.

Disclosures for Employee Stock Purchase Plan

The Company provides the following disclosures for employee stock purchase plan as of December 31 (dollars):

	2012		2011		2010
Weighted average purchase price per share	$	78.22	$	61.17	$	46.80
Weighted average grant-date fair value per share of shares purchased		32.33		27.58		28.97

Assumptions in Computation of Fair Value

The Company uses the Black-Scholes option-pricing model to determine the fair value of shares purchased under the 2004 Purchase Plan with the following weighted average assumptions for the years ended December 31:

	2012			2011			2010
Dividend yield		0	%		0	%		0	%
Expected volatility		46	%		47	%		51	%
Risk-free interest rate		0.40	%		0.43	%		1.48	%
Expected life (in years)		1.25			1.25			1.25

Stock-Based Compensation Expense Recognized in Company's Condensed Consolidated Statement of Operations

The following table presents, by operating expense, the Company’s stock-based compensation expense recognized in the Company’s consolidated statement of operations for the three years ended December 31 (in thousands):

	2012		2011		2010
Cost of revenues	$	6,218	$	5,569	$	5,836
Sales and marketing		18,730		14,558		12,666
General and administrative		58,920		51,010		48,741
Restructuring charges (1)		—		—		1,488
	$	83,868	$	71,137	$	68,731

(1) See note 17, “Switch and Data Restructuring Charge”.

Equinix Equity Awards [Member]

Assumptions in Computation of Fair Value

The Company used the Black-Scholes option-pricing model to determine the fair value of stock options granted in connection with the Switch and Data Acquisition with the following weighted average assumptions for the year ended December 31, 2010:

Dividend yield	0	%
Expected volatility	37	%
Risk-free interest rate	1.11	%
Expected life (in years)	2.24

Summary of Stock Option Activity

Stock option activity under the Equity Compensation Plans is summarized as follows:

	Number of shares outstanding			Weighted- average exercise price per share		Weighted- average remaining contractual life (years)		Aggregate intrinsic value (2) (dollars in thousands)
Stock options outstanding at December 31, 2009		1,870,971		$	66.74
Stock options granted (1)		476,943			55.98
Stock options exercised		(610,896	)		49.31
Stock options canceled		(267,652	)		109.18
Stock options outstanding at December 31, 2010		1,469,366			62.77
Stock options granted		—			—
Stock options exercised		(478,832	)		54.17
Stock options canceled		(70,618	)		92.55
Stock options outstanding at December 31, 2011		919,916			64.96
Stock options granted		—			—
Stock options exercised		(615,754	)		63.19
Stock options canceled		(7,633	)		63.47
Stock options outstanding at December 31, 2012		296,529			68.68		2.16	$	40,777
Stock options vested and expected to vest at December 31, 2012 (3)		296,434			68.69		2.15		40,761
Stock options exercisable at December 31, 2012		288,411			69.70		2.04		39,369

(1) Stock options issued in connection with the Switch and Data Acquisition (see Note 2, “Switch and Data Acquisition”).

(2) The aggregate intrinsic value is calculated as the difference between the market value of the stock as of December 31, 2012 and the exercise price of the option.

(3) Includes pre-vesting estimated forfeiture rate assumptions on stock options outstanding.

Stock-Based Compensation Expense Recognized in Company's Condensed Consolidated Statement of Operations

The Company’s stock-based compensation recognized in the consolidated statement of operations was comprised of the following types of equity awards for the years ended December 31 (in thousands):

	2012		2011		2010
Stock options	$	811	$	3,604	$	12,472
Restricted shares and restricted stock units		74,836		61,865		50,827
Employee stock purchase plans		8,221		5,668		5,432
	$	83,868	$	71,137	$	68,731

ALOG Equity Awards [Member]

Assumptions in Computation of Fair Value

The weighted-average fair value per share of the 2012 ALOG Stock Options on the date of the grant was approximately $0.19, which was computed using the Black-Scholes model with assumptions as follows:

Average exercise price	$	0.28
Expected life (years)		1.35
Dividend yield		0	%
Volatility		44	%
Risk-free interest rate		7.3	%