Summary
Equinix Inc. (EQIX) filed an 8-K report on January 6, 2005, detailing a restructuring charge related to exiting unused leased space. The company decided to exit leases for excess space in Secaucus, New Jersey, and unimproved space above its Los Angeles IBX data center. This decision was driven by the availability of fully built-out data centers at lower costs than constructing new facilities. Equinix anticipates incurring a restructuring charge for the quarter ending December 31, 2004, estimated to be between $15 million and $20 million. Importantly, the company believes this charge will not negatively impact its previously issued financial guidance for 2004 and 2005, due to mitigating factors like subleasing the Secaucus space and already incurring costs for the Los Angeles space.
Key Highlights
- 1Equinix is incurring a restructuring charge estimated between $15-$20 million for the quarter ending December 31, 2004.
- 2The charge is due to the decision to exit leases for excess, unused data center space in Secaucus, NJ, and Los Angeles, CA.
- 3The company is subleasing the excess space in Secaucus to the existing tenant.
- 4Equinix cites the availability of fully built-out data centers at lower costs as the reason for exiting these leases.
- 5Management believes the restructuring charge will have no negative impact on prior 2004 or 2005 financial guidance.
- 6The decision was effective January 1, 2005, for the Secaucus lease obligation.
- 7The report was filed on January 5, 2005, with an event date of December 31, 2004.