Equity Method Investments

The Company currently holds two investments accounted for under the equity method of accounting, SUPERNAP International and Planet3, Inc. (“Planet3”), in which the Company holds a 50% ownership interest and a 45% ownership interest, respectively. As of December 31, 2018 and 2017, the Company determined that it continued to have a variable interest in both SUPERNAP International and Planet3, as the entities do not have sufficient equity at risk. However, the Company concluded that it is not the primary beneficiary of SUPERNAP International or of Planet3 as it does not have deemed control of either entity. As a result, it does not consolidate either entity into its consolidated financial statements.

As of December 31, 2018 and 2017, the Company had invested $1.3 million in SUPERNAP International. As of March 31, 2018, the Company’s carrying value of its investment in SUPERNAP International was reduced to zero as a result of recording its share of the investee’s losses. Accordingly, as the Company does not have any guaranteed obligations and is not otherwise committed to provide further financial support to SUPERNAP International, the Company discontinued the equity method of accounting for its investment in SUPERNAP International as of March 31, 2018 and will not provide for additional losses until its share of future net income or comprehensive income, if any, equals the share of net losses not recognized during the period the equity method was suspended. Losses recorded will continue to include the foreign currency translation adjustment in the Company’s investment. The Company’s share of net loss recorded during the years ended December 31, 2018, 2017, and 2016 amounted to $0.3 million, $1.1 million, and $2.1 million, respectively. As of December 31, 2018 and 2017, the Company recorded amounts consisting primarily of reimbursable expenses due from SUPERNAP International of $0.4 million and $0.3 million, respectively, within accounts receivable on the consolidated balance sheets.

As of December 31, 2018 and 2017, the Company had invested $10.0 million in Planet3. The Company’s share of net loss recorded during the year ended December 31, 2016 was $3.7 million. During the year ended December 31, 2016, the Company determined an other than temporary loss in value of its investment in Planet3 had occurred due to Planet3’s continued operating losses and the release of a beta product that did not generate the projected sales activity. As a result, the Company fully impaired the carrying values of its investment in Planet3 of $4.4 million, notes receivable of $2.4 million, net of a $0.6 million discount, and related embedded derivative of $0.9 million for a total write-down of $7.7 million during the year ended December 31, 2016. The estimated fair value of the Company’s investment in Planet3 was based on Level 3 inputs, using a present value of future cash flow valuation technique that relied on management assumptions to derive an enterprise value. As the Company did not have any guaranteed obligations and was not otherwise committed to provide further financial support to Planet3, the Company discontinued the equity method of accounting for its investment in Planet3 as of December 31, 2016 and will not provide for additional losses until its share of future net income, if any, equals the share of net losses not recognized during the period the equity method was suspended.

The summarized financial information of the Company’s equity method investments is as follows:



	December 31,
	2018		2017
	(in thousands)
Current assets	$	2,334	$	2,169
Noncurrent assets	$	12,888	$	17,075
Current liabilities	$	3,128	$	2,583
Noncurrent liabilities	$	17,145	$	19,445



	Years Ended December 31,
	2018			2017			2016
	(in thousands)
Revenue	$	466		$	700		$	1,239
Gross loss	$	(1,558	)	$	(3,467	)	$	(2,313	)
Net loss	$	(5,652	)	$	(5,834	)	$	(12,353	)