8-KEarnings & ResultsMaterial AgreementsExhibits & Filings

EQUINIX INC 8-K Report, Material Agreement (Oct 22, 2008)

Filed October 22, 2008For Securities:EQIX

Summary

Equinix, Inc. (EQIX) filed an 8-K on October 21, 2008, reporting two key events. Firstly, the company, through its indirect wholly-owned subsidiary Equinix (London) Limited, entered into an Agreement for Lease for a significant property and warehouse building in Slough, on the outskirts of London. This agreement is a precursor to a 20-year definitive lease, with an initial 15-year rent obligation of approximately $41.6 million, subject to market rent reviews and renewal options. Equinix has provided a guarantee for the tenant's obligations under this lease. Secondly, the filing announced that Equinix would release its financial results for the quarter ended September 30, 2008, on October 22, 2008, via a press release. This press release, which includes non-GAAP information and its reconciliation, is attached as an exhibit. Investors should note this filing primarily concerns a new UK property lease agreement and the upcoming release of quarterly financial performance.

Key Highlights

  • 1Equinix (London) Limited entered into an Agreement for Lease for a property in Slough, UK, paving the way for a new data center facility.
  • 2The definitive lease will span 20 years, with a tenant termination option after 15 years.
  • 3The projected total rent obligation over the first 15 years of the lease is approximately $41.6 million.
  • 4Rent is subject to review and adjustment to market rates at the 15-year mark and renewal periods.
  • 5Equinix, Inc. has provided a corporate guarantee for the lease obligations of its UK subsidiary.
  • 6The company announced its financial results for the quarter ended September 30, 2008, via a press release issued on October 22, 2008.
  • 7The press release includes non-GAAP financial information with a reconciliation to GAAP.

Frequently Asked Questions

The Agreement for Lease is a preliminary step to secure a significant property and warehouse building in Slough, UK, which Equinix intends to use for its operations, likely as a data center. This agreement outlines the terms for completing certain works before a definitive 20-year lease is finalized.

The lease has an initial rent obligation of approximately $41.6 million over the first 15 years. While this represents a significant future commitment, the rent is subject to market reviews at the 15-year point and upon renewal, providing some flexibility. The exact total cost will depend on future market rents and the duration Equinix occupies the facility.

This 8-K filing does not contain the actual financial results for the quarter ended September 30, 2008. However, it announces that Equinix issued a press release on October 22, 2008, to report these results, and this press release is attached as an exhibit to the filing.

Equinix, Inc. has agreed to guarantee the performance of the tenant's obligations under the Agreement for Lease and the subsequent definitive lease. This means Equinix, Inc. is financially backing the lease commitment made by its subsidiary, Equinix (London) Limited.