What is the primary impact of the REIT conversion on Equinix's financial statements?

The primary financial impact disclosed is a significant non-cash write-off of U.S. deferred tax assets. Equinix expects to record a tax provision between $330 million and $370 million in the fourth quarter of 2014, which will affect its reported net income.

When does Equinix officially become a REIT?

Equinix's conversion to a REIT is effective for its taxable year commencing January 1, 2015. Therefore, the first day Equinix will operate as a REIT is January 1, 2015.

Is the REIT conversion guaranteed, and what is the status of the IRS ruling?

Equinix's Board has approved the conversion, and the company believes it will qualify and receive a favorable private letter ruling (PLR) from the IRS based on legal precedent and the fact that other data center companies operate as REITs. However, the PLR has not yet been received, and the company cannot provide assurance on the timing or ultimate receipt of a favorable ruling.

What is the purpose of the Amended and Restated Bylaws mentioned in the filing?

The Amended and Restated Bylaws, effective December 18, 2014, include a forum selection provision. This provision aims to designate Delaware state or federal courts as the exclusive venue for specific legal actions related to the company, its directors, officers, or employees, thereby managing and potentially reducing the costs associated with multi-jurisdictional litigation.

EQIX 8-K: Corporate Changes

Summary

Equinix, Inc. (EQIX) filed an 8-K on December 22, 2014, reporting two significant corporate actions. Firstly, effective December 18, 2014, the company amended its bylaws to include a forum selection provision. This provision designates Delaware state courts (or the federal district court for Delaware) as the exclusive venue for specific types of legal actions involving the company, its directors, officers, or employees, aiming to streamline litigation and reduce costs. Secondly, and more importantly for investors, Equinix announced on December 23, 2014, that its Board of Directors unanimously approved the company's conversion to a Real Estate Investment Trust (REIT) for federal income tax purposes. This conversion is effective for the taxable year commencing January 1, 2015, making January 1, 2015, the first day Equinix operates as a REIT. While Equinix expects to receive a favorable private letter ruling from the IRS, it has not yet received it, but is confident based on precedent and other data center REITs. This conversion necessitates a significant non-cash write-off of U.S. deferred tax assets, estimated between $330-$370 million, to be recorded in the fourth quarter of 2014.

Key Highlights

1Equinix adopted Amended and Restated Bylaws effective December 18, 2014, adding a forum selection clause for litigation management.
2The forum selection provision designates Delaware state or federal courts as the exclusive venue for certain legal proceedings.
3Equinix's Board of Directors unanimously approved the company's conversion to a Real Estate Investment Trust (REIT) for federal income tax purposes.
4The REIT conversion is effective for the taxable year beginning January 1, 2015.
5Equinix expects to qualify as a REIT and receive a favorable private letter ruling from the IRS, though it has not yet been received.
6The REIT conversion will lead to a significant non-cash write-off of U.S. deferred tax assets, estimated between $330 million and $370 million in Q4 2014.
7This non-cash tax provision will impact net income for the fourth quarter of 2014.

EQUINIX INC 8-K Report, Bylaw Amendment (Dec 23, 2014)

Summary

Key Highlights

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