Equity Commonwealth (EQC) 10-K Annual Report February 2019

Chicago - February 13, 2019 - Equity Commonwealth (NYSE: EQC) today reported its financial results for the quarter and year ended December 31, 2018. All per share results are reported on a diluted basis.

Financial results for the quarter ended December 31, 2018

Net income attributable to common shareholders for the quarter ended December 31, 2018 was $13.4 million, or $0.11 per share. This compares to net loss attributable to common shareholders for the quarter ended December 31, 2017 of $23.6 million, or $0.19 per share. The increase in net income was primarily due to lower losses from property sales, an increase in interest and other income, and a decrease in interest expense.

Funds from Operations (FFO), as defined by the National Association of Real Estate Investment Trusts, for the quarter ended December 31, 2018, were $25.6 million, or $0.21 per share. This compares to FFO for the quarter ended December 31, 2017 of $24.0 million, or $0.19 per share. The following items impacted FFO for the quarter ended December 31, 2018, compared to the corresponding 2017 period:


•	($0.12) per share from properties sold;


•	$0.06 per share of increase in interest and other income;


•	$0.05 per share of interest expense savings;


•	$0.02 per share of general & administrative expense savings; and


•	$0.01 per share of income from same properties.

Normalized FFO for the quarter ended December 31, 2018 was $25.5 million, or $0.21 per share. This compares to Normalized FFO for the quarter ended December 31, 2017 of $22.6 million, or $0.18 per share. The following items impacted Normalized FFO for the quarter ended December 31, 2018, compared to the corresponding 2017 period:


•	($0.12) per share from properties sold;


•	$0.06 per share of increase in interest income;


•	$0.05 per share of interest expense savings;


•	$0.02 per share of general & administrative expense savings; and


•	$0.02 per share from same properties.

Normalized FFO begins with FFO and eliminates certain items that, by their nature, are not comparable from period to period, non-cash items, and items that tend to obscure the company’s operating performance. Definitions of FFO, Normalized FFO and reconciliations to net income, determined in accordance with U.S. generally accepted accounting principles, or GAAP, are included at the end of this press release.

For the quarter ended December 31, 2018, the company’s balance of cash and marketable securities was $2.7 billion, or $21 per share. Total debt outstanding as of December 31, 2018 was $275 million.

The weighted average number of diluted common shares outstanding used for calculating net income or loss per share for the quarter ended December 31, 2018 was 123,375,686 shares, compared to 124,293,289 for the quarter ended December 31, 2017.

The following information was filed by Equity Commonwealth (EQC) on Wednesday, February 13, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

Please wait while we load the requested 10-K report or click the link below:

https://last10k.com/sec-filings/report/803649/000080364919000033/eqc12311810-k.htm

View differences made from one year to another to evaluate Equity Commonwealth's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ) — *Sample 10-K Year-over-Year (YoY) Comparison*

Compare this 10-K Annual Report to its predecessor by reading our highlights to see what text and tables were ~~removed~~ , added and changed by Equity Commonwealth.

Continue

Assess how Equity Commonwealth's management team is paid from their Annual Proxy

Equity Commonwealth's Definitive Proxy Statement (Form DEF 14A) filed after their 2019 10-K Annual Report includes:

Voting Procedures
Board Members
Executive Team
Salaries, Bonuses, Perks
Peers / Competitors

Continue

Rating
Learn More

Filter Sentiment:

All

Positive

Negative

Filter Category:

All

Financial

Revenue

M & A

Other

Filter Subcategory:

All

Earnings

Expense

Cash Flow

Debt

Product

Income

Other

Inside Equity Commonwealth's 10-K Annual Report:

Financial - Earnings Highlight
Impairment indicators may include declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property.

Financial - Expense Highlight
To mitigate the adverse impact of any increased cost of debt capital in the event of material inflation, in the event we incur any variable rate debt in the future, we may enter into interest rate hedge arrangements in the future.
Financial - Cash Flow Highlight
Our future cash flows from operating activities will depend primarily upon our: Volatility in energy costs and real estate taxes may cause our future operating expenses to fluctuate; however, the impact of these fluctuations is expected to be partially offset by the pass through of operating expenses to our tenants pursuant to lease terms, although there can be no assurance that we will be able to successfully offset these expenses or that doing so would not negatively impact our competitive position or business.
Financial - Expense Highlight
General and administrative expenses decreased $2.5 million, or 5.0% in the 2017 period, compared to the 2016 period, primarily due to a $0.9 million decrease in compensation expenses related to staffing reductions, a $1.0 million decrease related to the shareholder approved reimbursement of expenses incurred by Related/Corvex in connection with their consent solicitation to remove our former Trustees that were incurred in 2016 but not 2017, and a $3.5 million decrease in technology, payroll and legal expenses, partially offset by a $3.0 million increase in share-based compensation expense.
Other - Other Highlight
Leases entered into during the year ended December 31, 2018, including both lease renewals and new leases, had weighted average cash rental rates that were approximately 3.2% higher than prior rental rates for the same space and weighted average GAAP rental rates that were approximately 15.2% higher than prior rental rates for the same space.
Financial - Debt
However, there can be no...Read more
Financial - Expense
We consider certain factors in...Read more
Financial - Expense
Interest expense decreased $25.6 million,...Read more
Revenue - Product
During the years ended December...Read more
Financial - Shares
On March 15, 2017, our...Read more
Financial - Shares
On March 14, 2018, our...Read more
Financial - Expense
General and administrative expenses decreased...Read more
Other - Other
We recognize the excess, if...Read more
Financial - Cash Flow
Changes in these three categories...Read more
Other - Other
The change in GAAP rents...Read more
Financial - Cash Flow
The subjectivity of assumptions used...Read more
Other - Other
Competition, economic conditions and other...Read more
Other - Other
We pay CBRE a property-by-property...Read more
Financial - Debt
The decision to enter into...Read more
Financial - Earnings
This measure should be considered...Read more
Financial - Debt
We have an effective shelf...Read more
Financial - Cash Flow
Projections of expected future operating...Read more
M & A - Other
These policies affect our: We...Read more
Revenue - Product
Gain on sale of properties,...Read more
Other - Other
We have generated significant proceeds...Read more
Financial - Income
Rental income decreased $125.9 million,...Read more
Financial - Income
Tenant reimbursements and other income...Read more
Financial - Income
Rental income decreased $138.8 million,...Read more
Financial - Income
Tenant reimbursements and other income...Read more
Other - Other
Depreciation and amortization decreased $41.7...Read more
Other - Other
Depreciation and amortization decreased $41.1...Read more
Financial - Income
Operating income decreased $18.5 million,...Read more
M & A - Other
We currently target such efforts...Read more
Financial - Expense
NOI excludes amortization of capitalized...Read more
Financial - Income
Tenant reimbursements and other income...Read more
Financial - Income
Rental income at the comparable...Read more
Other - Other
At December 31, 2018, we...Read more
Financial - Income
We recorded a state income...Read more
Financial - Income
Interest and other income, net...Read more
Other - Other
Commitments made for leasing expenditures...Read more
Financial - Income
Interest and other income, net...Read more
Financial - Income
As we have sold assets,...Read more
Other - Other
As of December 31, 2018...Read more
Other - Other
We allocate the consideration to...Read more
Financial - Expense
Inflation might also cause our...Read more
Other - Other
We expect our efforts in...Read more
Other - Other
We recorded impairment charges of...Read more
Financial - Cash Flow
We expect to use our...Read more
Financial - Income
Operating income decreased $29.4 million,...Read more
M & A - Other
We amortize the value of...Read more
Other - Other
On May 4, 2018, we...Read more
Financial - Earnings
These measures should be considered...Read more
Financial - Shares
On May 15, 2016, we...Read more
Financial - Expense
Operating expenses decreased $61.5 million,...Read more
Financial - Expense
Operating expenses decreased $59.3 million,...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Equity Commonwealth provided additional information to their SEC Filing as exhibits

Exhibit 10.20: Material Contract

Exhibit 21.1: Subsidaries Of The Registrant

Exhibit 23.1: Consents Of Experts And Counsel

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: EQC
CIK: 803649
Form Type: 10-K Annual Report
Accession Number: 0000803649-19-000033
Submitted to the SEC: Thu Feb 14 2019 11:17:54 AM EST
Accepted by the SEC: Thu Feb 14 2019
Period: Monday, December 31, 2018
Industry: Real Estate Investment Trusts