Equity Commonwealth (NYSE: EQC) today announced financial
results for the quarter ended September 30, 2014.
Funds from Operations, or FFO, available for common shareholders
for the quarter ended September 30, 2014 was $207.2 million, or
$1.61 per basic share and $1.59 per diluted share, compared to FFO
for the quarter ended September 30, 2013 of $53.5 million, or $0.45
per basic and diluted share. FFO during the third quarter 2014 was
positively impacted by EQC’s sale of its entire stake in Select
Income REIT, or SIR, a publicly traded REIT, for $704.8 million.
The sale generated a gain of $171.8 million, or $1.33 per basic
share and $1.31 per diluted share.
Normalized FFO available for common shareholders for the quarter
ended September 30, 2014, was $57.3 million, or $0.44 per basic and
diluted share, compared to Normalized FFO for the quarter ended
September 30, 2013 of $63.7 million, or $0.54 per basic and diluted
share. In addition to other adjustments, Normalized FFO excludes
the gain related to the sale of SIR.
Net income available for common shareholders was $149.8 million,
or $1.16 per basic and diluted share, for the quarter ended
September 30, 2014, compared to net loss available for common
shareholders of $227.5 million, or $1.92 of net loss per basic and
diluted share for the same period last year.
The increase in net income was largely driven by the gain on
sale from SIR during the quarter ended September 30, 2014, and a
loss on asset impairment of $124.3 million during the quarter ended
September 30, 2013. The increase in net income was partially
off-set by an increase in general and administrative, or G&A,
expense of $21.7 million, which included a $13.6 million increase
of shareholder litigation and transition costs and $6.5 million of
cost overlap as we built out our internalized structure. The
increases in shareholder litigation and transition costs, as well
as the cost overlaps, stem from the consent solicitation that led
to the replacement of Reit Management and Research, or RMR, with
our own internal management team.
The weighted average number of common shares outstanding for the
quarter ended September 30, 2014 was 128,880,196 basic and
131,243,445 diluted. The weighted average number of common shares
outstanding basic and diluted for the quarter ended September 30,
2013, was 118,328,439.
The definitions and a reconciliation of FFO and Normalized FFO
to net income attributable to Equity Commonwealth, determined in
accordance with U.S. generally accepted accounting principles, or
GAAP, are included at the end of this press release.
Operating Results:
As of September 30, 2014, EQC’s results for its consolidated and
same property portfolio consisting of 156 properties and 42.9
million square feet were as follows:
- The overall portfolio was 85.9% leased,
compared to 86.7% as of June 30, 2014 and 86.8% as of September 30,
2013.
- During the quarter, EQC entered into
leases for 1,109,000 square feet, including lease renewals for
792,000 square feet and new leases for 317,000 square feet.
- Cash rental rates on new and renewal
leases were approximately 2.8% lower than prior cash rental rates
for the same space.
- GAAP rental rates on new and renewal
leases were approximately 0.1% higher than prior GAAP rental rates
for the same space.
- Same property net operating income, or
NOI increased 5.1% for the quarter ending September 30, 2014 and
increased 0.1% for the nine months ending September 30, 2014, when
compared to the same periods in 2013.
- Same property cash net operating
income, or Cash NOI increased 7.0% for the quarter ending September
30, 2014 and increased 3.1% for the nine months ending September
30, 2014, when compared to the same periods in 2013. The increase
in same property NOI and Cash NOI reflects approximately $2.7
million in the third quarter and $6.7 million for the nine months
ending September 30, 2014 from the settlement of litigation with a
former tenant.
The definitions and a reconciliation of NOI and Cash NOI to net
income, determined in accordance with GAAP, are included at the end
of this press release. Same property NOI and same property Cash NOI
include properties continuously owned from July 1, 2013 through
September 30, 2014 for the quarter to date periods and properties
continuously owned from January 1, 2013 through September 30, 2014
for the year to date periods. Same property NOI and same property
Cash NOI also exclude amounts related to the settlement of
outstanding assets and liabilities of previously-disposed
properties that are reflected in our consolidated results.
Significant Events during the Third Quarter 2014:
- On July 9, 2014, EQC sold its entire
stake of 22.0 million common shares of SIR. EQC received
approximately $704.8 million in cash, or $32.04 per share, and
recognized a gain of $171.8 million. As a result of the sale, EQC
no longer holds any interest in SIR.
- EQC repaid, at par, a total of $551.2
million of secured and unsecured debt, including principal
amortization.
- On August 5, 2014 EQC paid dividends of
$0.8125 per series D preferred share and $0.90625 per series E
preferred share. These dividends included the accrued dividends for
the periods from February 15, 2014 to May 14, 2014 and from May 15,
2014 to August 14, 2014.
- At EQC’s annual meeting of shareholders
held on July 31, 2014, EQC’s shareholders approved various
amendments to EQC’s Declaration of Trust to, among other things,
implement best-practice corporate governance improvements.
- Also at the annual meeting, EQC’s
shareholders approved the reimbursement to Related/Corvex a maximum
of $33.5 million of expenses they incurred in connection with their
consent solicitations to remove EQC’s prior Trustees and to elect a
new slate of nominees to serve on EQC’s Board of Trustees.
Approximately $16.7 million was paid in the third quarter 2014. The
remaining payments in 2015 and 2016 are contingent on an average
closing share price of at least $26.00 in each year.
- On August 1, 2014, the company changed
its name to Equity Commonwealth. The common shares of the company
began trading on the New York Stock Exchange under the new name and
ticker symbol “EQC.”
- On September 30, 2014, EQC terminated
its external management agreements with RMR, with the exception of
the existing Australian management agreement with RMR Australia
which will remain in effect until December 31, 2015, unless earlier
terminated. RMR has agreed to use best efforts to assist EQC in the
transition of the company’s management and operations. EQC has
agreed to pay RMR $1.2 million per month for transition services
from October 1, 2014 to February 28, 2015.
- EQC paid a $15.3 million incentive fee
to RMR, of which $13.2 million had accrued through June 30, 2014,
under the now-terminated business management agreement with RMR.
The incentive fee relates to the business management agreement
entered into prior to the election of the Company’s new Board of
Trustees. There is no further incentive fee obligation to RMR.
Dividend Policy:
EQC has been evaluating its options regarding a sustainable
common dividend policy that allows the company to focus on its
long-term strategy of increasing shareholder returns by improving
the value of its portfolio. EQC does not expect to make any further
common dividend payments in 2014.
Subsequent Events:
On October 1, 2014, CBRE Group, Inc., or CBRE, assumed
day-to-day property management responsibilities for EQC’s US
properties.
EQC prepaid, at par, a $7.8 million mortgage loan encumbering
6200 Glenn Carlson Drive on October 31, 2014. EQC also issued a
notice of redemption to call, at par, its $125 million 7.5% senior
unsecured notes due 2019 on November 17, 2014.
Transition:
On October 1, 2014, EQC assumed responsibility for our company’s
operations from RMR, the previous external advisor, and completed
our move of the business to Chicago, IL. The transition included
taking over and internalizing EQC’s corporate and business
operations, and transferring property management from RMR to
CBRE.
As a result of the transition, EQC expects to have incremental
non-recurring G&A costs of approximately $5.5 million for the
remainder of 2014, and roughly $6.5 million for the full-year 2015,
excluding any of the remaining Related/Corvex expense
reimbursement.
In 2015, $8.4 million of the Related/Corvex expenses will be
reimbursed if the average closing price of our common shares is at
least $26.00 during the one year period after July 31, 2014.
Approximately $8.4 million will be reimbursed in 2016, if the
average closing price of our common shares is at least $26.00
during the one year period after July 31, 2015. Of this $16.8
million potential future obligation, $7.0 million of expenses were
accrued during the quarter ended 2014.
The company anticipates G&A costs will be approximately
$61.5 million to $71.3 million in 2015. Within this estimate we
anticipate recurring G&A expenses to be approximately $55
million, which excludes $6.5 million of expected non-recurring
G&A costs related to the transition in 2015 and up to $9.8
million related to the potential Related/Corvex reimbursement, as
described above.
Earnings Conference Call & Supplemental Data:
Equity Commonwealth will host a conference call on Tuesday,
November 4, 2014, at 10:30 a.m. Central Standard Time to discuss
third quarter 2014 results. The conference call will be available
via live audio webcast on the Investor Relations section of the
company’s website (www.eqcre.com). In addition, a replay of the
audio webcast will be available on the Investor Relations section
of the company’s website.
A copy of EQC’s Third Quarter 2014 Supplemental Operating and
Financial Data is available for download at www.eqcre.com.
Equity Commonwealth is an internally managed and self-advised
REIT, which primarily owns office buildings located in central
business districts and suburban locations across the country, with
executive offices in Chicago, IL.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this press release
constitute forward-looking statements within the meaning of the
federal securities laws, including, but not limited to, statements
regarding potential payments to Related/Corvex, expected G&A
costs and the Company’s dividend policy. Any forward-looking
statements contained in this press release are intended to be made
pursuant to the safe harbor provisions of Section 21E of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements relate to expectations, beliefs, projections, future
plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. In
some cases, you can identify forward-looking statements by the use
of forward-looking terminology such as “may,” “will,” “should,”
“expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” or “potential” or the negative of these
words and phrases or similar words or phrases which are predictions
of or indicate future events or trends and which do not relate
solely to historical matters. You can also identify forward-looking
statements by discussions of strategy, plans or intentions.
The forward-looking statements contained in this press release
reflect our current views about future events and are subject to
numerous known and unknown risks, uncertainties, assumptions and
changes in circumstances that may cause our actual results to
differ significantly from those expressed in any forward-looking
statement. We do not guarantee that the transactions and events
described will happen as described (or that they will happen at
all).
While forward-looking statements reflect our good faith beliefs,
they are not guarantees of future performance. We disclaim any
obligation to publicly update or revise any forward-looking
statement to reflect changes in underlying assumptions or factors,
of new information, data or methods, future events or other
changes. For a further discussion of these and other factors that
could cause our future results to differ materially from any
forward-looking statements, see the section entitled “Risk Factors”
in our Annual Report on Form 10-K for the year ended December 31,
2013 and in our Quarterly Reports on Form 10-Q for subsequent
quarters.
Equity Commonwealth
Condensed Consolidated Balance Sheets (amounts in
thousands, except share data) September
30, December 31, 2014 2013 ASSETS Real estate properties: Land $
740,448 $ 699,135 Buildings and improvements 5,145,916
4,838,030 5,886,364 5,537,165 Accumulated
depreciation (988,323 ) (895,059 ) 4,898,041
4,642,106 Properties held for sale - 573,531 Acquired real estate
leases, net 212,584 255,812 Equity investments - 517,991 Cash and
cash equivalents 597,405 222,449 Restricted cash 15,554 22,101
Rents receivable, net of allowance for doubtful accounts of $7,013
and $7,885, respectively 238,207 223,769 Other assets, net
209,005 188,675 Total assets $ 6,170,796
$ 6,646,434 LIABILITIES AND SHAREHOLDERS'
EQUITY Revolving credit facility $ - $ 235,000 Senior unsecured
debt, net 1,823,182 1,855,900 Mortgage notes payable, net 619,760
914,510 Liabilities related to properties held for sale - 28,734
Accounts payable and accrued expenses 163,075 165,855 Assumed real
estate lease obligations, net 28,950 33,935 Rent collected in
advance 26,197 27,553 Security deposits 13,648 11,976 Distributions
payable 6,981 - Due to related persons - 9,385
Total liabilities 2,681,793 3,282,848
Shareholders' equity: Preferred shares of beneficial
interest, $0.01 par value: 50,000,000 shares authorized; Series D
preferred shares; 6 1/2% cumulative convertible; 4,915,497 and
15,180,000 shares issued and outstanding, respectively, aggregate
liquidation preference of $122,887 and $379,500, respectively $
119,266 $ 368,270 Series E preferred shares; 7 1/4% cumulative
redeemable on or after May 15, 2016; 11,000,000 shares issued and
outstanding, aggregate liquidation preference $275,000 265,391
265,391 Common shares of beneficial interest, $0.01 par value:
350,000,000 shares authorized; 128,893,552 and 118,386,918 shares
issued and outstanding, respectively 1,289 1,184 Additional paid in
capital 4,484,552 4,213,474 Cumulative net income 2,392,413
2,209,840 Cumulative other comprehensive loss (39,765 ) (38,331 )
Cumulative common distributions (3,111,868 ) (3,082,271 )
Cumulative preferred distributions (622,275 )
(573,971 ) Total shareholders' equity 3,489,003
3,363,586 Total liabilities and shareholders' equity
$ 6,170,796 $ 6,646,434
Equity Commonwealth
Condensed Consolidated Statements of Operations (amounts
in thousands, except per share data)
For the Three Months Ended For the Nine Months
Ended September 30, September 30, 2014 2013 2014 2013 Revenues
Rental income (1) $ 174,216 $ 170,908 $ 518,663 $ 592,221 Tenant
reimbursements and other income 42,379 43,293
130,386 146,780 Total revenues
216,595 214,201 649,049
739,001 Expenses Operating expenses 99,392
102,350 293,824 310,585 Depreciation and amortization 57,213 56,465
168,693 182,494 General and administrative 47,450 25,742 96,395
63,454 Loss on asset impairment - 124,253 17,922 124,253
Acquisition related costs - (436 ) 5
337 Total expenses 204,055
308,374 576,839 681,123
Operating income (loss) 12,540 (94,173 ) 72,210 57,878
Interest and other income 406 227 1,071 931 Interest expense
(including net amortization of debt discounts, premiums and
deferred financing fees of $(91), $(608), $(700), and $265,
respectively) (35,245 ) (39,236 ) (111,079 ) (134,452 ) Gain (loss)
on early extinguishment of debt 6,699 - 6,699 (60,027 ) Gain on
sale of equity investments 171,754 - 171,721 66,293 Gain on
issuance of shares by an equity investee - -
17,020 - Income (loss) from
continuing operations before income tax expense and equity in
earnings of investees 156,154 (133,182 ) 157,642 (69,377 ) Income
tax expense (703 ) (785 ) (2,166 ) (2,527 ) Equity in earnings of
investees 1,072 10,492 24,460
14,913 Income (loss) from continuing
operations 156,523 (123,475 ) 179,936 (56,991 ) Discontinued
operations: Income from discontinued operations (1) 95 95 8,220
1,732 Gain (loss) on asset impairment from discontinued operations
122 (92,827 ) (2,238 ) (101,362 ) Loss on early extinguishment of
debt from discontinued operations - - (3,345 ) - Net gain on sale
of properties from discontinued operations - -
- 3,359 Income (loss) before
gain on sale of properties 156,740 (216,207 ) 182,573 (153,262 )
Gain on sale of properties - - -
1,596 Net income (loss) 156,740 (216,207 )
182,573 (151,666 ) Net income attributable to noncontrolling
interest in consolidated subsidiary - (108 )
- (20,093 ) Net income (loss) attributable to
Equity Commonwealth 156,740 (216,315 ) 182,573 (171,759 ) Preferred
distributions (6,981 ) (11,151 ) (25,114 ) (33,453 ) Distribution
on conversion of preferred shares - -
(16,205 ) - Net income (loss) available for
EQC common shareholders $ 149,759 $ (227,466 ) $ 141,254
$ (205,212 ) Amounts available for EQC common
shareholders: Income (loss) from continuing operations $ 149,542 $
(134,734 ) $ 138,617 $ (108,941 ) Income from discontinued
operations 95 95 8,220 1,732 Gain (loss) on asset impairment from
discontinued operations 122 (92,827 ) (2,238 ) (101,362 ) Loss on
early extinguishment of debt from discontinued operations - -
(3,345 ) - Net gain on sale of properties from discontinued
operations - - -
3,359 Net income (loss) $ 149,759 $ (227,466 ) $
141,254 $ (205,212 ) Weighted average common shares
outstanding - basic (2) 128,880 118,328
123,736 110,353 Weighted average common
shares outstanding - diluted (2) 131,243
118,328 123,736 110,353
Basic and diluted earnings per common share available for EQC
common shareholders (2): Income (loss) from continuing operations $
1.16 $ (1.14 ) $ 1.12 $ (0.99 ) Income (loss) from
discontinued operations $ - $ (0.78 ) $ 0.02 $ (0.87
) Net income (loss) $ 1.16 $ (1.92 ) $ 1.14 $ (1.86 )
(1)
We report rental income on a straight line basis over the terms of
the respective leases; rental income and income from discontinued
operations include non-cash straight line rent adjustments. Rental
income and income from discontinued operations also include
non-cash amortization of intangible lease assets and liabilities.
(2)
As of September 30, 2014, we had 4,915 series D preferred shares
outstanding that were convertible into 2,363 of our common shares,
which for earnings per common share available for EQC common
shareholders is dilutive for the three months ended September 30,
2014, and anti-dilutive for all other periods presented.
Equity Commonwealth
Calculation of Funds from Operations (FFO) and Normalized
FFO (amounts in thousands, except per share data)
For the Three Months Ended For the Nine Months
Ended September 30, September 30, 2014 2013 2014 2013 Calculation
of FFO Net income (loss) attributable to Equity Commonwealth $
156,740 $ (216,315 ) $ 182,573 $ (171,759 ) Plus: Depreciation and
amortization from continuing operations 57,213 56,465 168,693
182,494 Depreciation and amortization from discontinued operations
- 3,842 - 11,725 Loss on asset impairment from continuing
operations - 124,253 17,922 124,253 (Gain) loss on asset impairment
from discontinued operations (122 ) 92,827 2,238 101,362 FFO from
equity investees 1,456 14,095 33,007 18,996 Net income attributable
to noncontrolling interest - 108 - 20,093 Less: FFO attributable to
noncontrolling interest - (142 ) - (26,270 ) Gain on sale of
properties - - - (1,596 ) Net gain on sale of properties from
discontinued operations - - - (3,359 ) Equity in earnings of
investees (1,072 ) (10,492 ) (24,460 )
(14,913 ) FFO attributable to Equity Commonwealth 214,215 64,641
379,973 241,026 Less: Preferred distributions (6,981 )
(11,151 ) (25,114 ) (33,453 ) FFO available
for EQC common shareholders $ 207,234 $ 53,490 $
354,859 $ 207,573 Calculation of Normalized
FFO FFO available for EQC common shareholders $ 207,234 $ 53,490 $
354,859 $ 207,573 Recurring adjustments: Lease value amortization
from continuing operations 2,099 2,443 8,517 7,865 Lease value
amortization from discontinued operations - (187 ) - (649 )
Straight line rent from continuing operations (3,197 ) (6,536 )
(10,172 ) (26,280 ) Straight line rent from discontinued operations
- 278 (226 ) 224 (Gain) loss on early extinguishment of debt from
continuing operations (6,699 ) - (6,699 ) 60,027 Loss on early
extinguishment of debt from discontinued operations - - 3,345 -
Minimum cash rent from direct financing lease (1) 2,032 2,031 6,096
6,093 Gain on sale of equity investments (171,754 ) - (171,721 )
(66,293 ) Gain on issuance of shares by an equity investee - -
(17,020 ) - Interest earned from direct financing lease (186 ) (272
) (623 ) (877 ) Normalized FFO from equity investees, net of FFO -
(1,349 ) (3,353 ) (1,445 ) Normalized FFO from noncontrolling
interest, net of FFO - 20 - 1,987 Other items which affect
comparability: Shareholder litigation and transition related
expenses 27,777 14,224 36,582 23,399 Acquisition related costs from
continuing operations - (436 ) 5
337 Normalized FFO available for EQC common
shareholders $ 57,306 $ 63,706 $ 199,590 $
211,961 Weighted average common shares outstanding --
basic 128,880 118,328 123,736
110,353 Weighted average common shares
outstanding -- diluted (2) 131,243 118,328
123,736 110,353 FFO available
for EQC common shareholders per share -- basic $ 1.61 $ 0.45
$ 2.87 $ 1.88 FFO available for EQC common
shareholders per share -- diluted (2) $ 1.59 $ 0.45 $
2.87 $ 1.88 Normalized FFO available for EQC common
shareholders per share -- basic and diluted (2) $ 0.44 $
0.54 $ 1.61 $ 1.92
(1)
Contractual cash payments from one tenant at Arizona Center for
2014 is approximately $8,098 and will decrease to approximately
$226 of rent in 2016, excluding variable management fees and
reimbursements. Our calculation of Normalized FFO reflects the cash
payments received from this tenant. The terms of this tenant's
lease require us to classify the lease as a direct financing (or
capital) lease, and as such, the revenue recognized on a GAAP basis
within our condensed consolidated statements of operations is de
minimis. This direct financing lease has an expiration date in
2045.
(2)
As of September 30, 2014, we had 4,915 series D preferred shares
outstanding that were convertible into 2,363 of our common shares,
which for FFO per common share, were dilutive for the three months
ended September 30, 2014 and anti-dilutive for all other periods
presented. The series D preferred shares outstanding were
anti-dilutive for all periods presented with respect to Normalized
FFO. We compute FFO in accordance with standards established
by the National Association of Real Estate Investment Trusts
(NAREIT). NAREIT defines FFO as net income (loss), calculated in
accordance with GAAP, excluding real estate depreciation and
amortization, gains (or losses) from sales of depreciable property,
impairment of depreciable real estate, and our portion of these
items related to equity investees and noncontrolling interests.
Normalized FFO begins with FFO and excludes lease value
amortization, straight line rent, gains and losses on early
extinguishment of debt, gains and losses on the sale of equity
investments, gains and losses on the issuance of shares by an
equity investee, shareholder litigation and transition-related
expenses, acquisition related costs, interest earned from direct
financing lease, and our portion of these items related to equity
investees and noncontrolling interests. Normalized FFO also
includes the minimum cash rent from direct financing lease. We
consider FFO and Normalized FFO to be appropriate measures of
operating performance for a REIT, along with net income, net income
attributable to Equity Commonwealth, net income available for EQC
common shareholders, operating income and cash flow from operating
activities.
We believe that FFO and Normalized FFO
provide useful information to investors because by excluding the
effects of certain historical amounts, such as depreciation
expense, FFO and Normalized FFO may facilitate a comparison of our
operating performance between periods and with other REITs. FFO and
Normalized FFO are among the factors considered by our Board of
Trustees when determining the amount of distributions to our
shareholders. FFO and Normalized FFO do not represent cash
generated by operating activities in accordance with GAAP and
should not be considered as alternatives to net income, net income
attributable to Equity Commonwealth, net income available for EQC
common shareholders, operating income or cash flow from operating
activities, determined in accordance with GAAP, or as indicators of
our financial performance or liquidity, nor are these measures
necessarily indicative of sufficient cash flow to fund all of our
needs. These measures should be considered in conjunction with net
income, net income attributable to Equity Commonwealth, net income
available for EQC common shareholders, operating income and cash
flow from operating activities as presented in our condensed
consolidated statements of operations, condensed consolidated
statements of comprehensive income (loss) and condensed
consolidated statements of cash flows. Other REITs and real estate
companies may calculate FFO and Normalized FFO differently than we
do.
Equity Commonwealth
Calculation of Property Net Operating Income (NOI)
(amounts in thousands)
For the Three Months Ended For the Nine Months Ended September 30,
September 30, 2014 2013 2014 2013 Calculation of NOI and Cash Basis
NOI (1): Rental income $ 174,216 $ 170,908 $ 518,663 $ 592,221
Tenant reimbursements and other income 42,379 43,293 130,386
146,780 Operating expenses (99,392 ) (102,350 )
(293,824 ) (310,585 ) NOI 117,203 111,851 355,225
428,416 Straight line rent adjustments (3,197 ) (6,536 ) (10,172 )
(26,280 ) Lease value amortization 2,099 2,443 8,517 7,865 Lease
termination fees (1,534 ) (412 ) (3,272 )
(1,723 ) Cash Basis NOI $ 114,571 $ 107,346 $
350,298 $ 408,278 Reconciliation of Cash Basis
NOI to GAAP Operating Income (Loss) Cash Basis NOI $ 114,571 $
107,346 $ 350,298 $ 408,278 Straight line rent adjustments 3,197
6,536 10,172 26,280 Lease value amortization (2,099 ) (2,443 )
(8,517 ) (7,865 ) Lease termination fees 1,534
412 3,272 1,723 NOI 117,203
111,851 355,225 428,416 Depreciation and amortization (57,213 )
(56,465 ) (168,693 ) (182,494 ) General and administrative (47,450
) (25,742 ) (96,395 ) (63,454 ) Loss on asset impairment - (124,253
) (17,922 ) (124,253 ) Acquisition related costs -
436 (5 ) (337 ) Operating Income (Loss)
$ 12,540 $ (94,173 ) $ 72,210 $ 57,878
(1) Excludes properties classified as
discontinued operations for the period ended September 30,
2014.
We define NOI as income from our real estate including lease
termination fees received from tenants less our property operating
expenses, which expenses include property marketing costs. NOI
excludes amortization of capitalized tenant improvement costs and
leasing commissions. We define Cash Basis NOI as NOI less non cash
straight line rent adjustments, lease value amortization and lease
termination fees. Same property NOI and same property cash basis
NOI include properties continuously owned from July 1, 2013 through
September 30, 2014 for the quarter to date periods and properties
continuously owned from January 1, 2013 through September 30, 2014
for the year to date periods. Same property NOI and same property
cash basis NOI also exclude amounts related to the settlement of
outstanding assets and liabilities of previously-disposed
properties that are reflected in our consolidated results.
We consider NOI and Cash Basis NOI to be appropriate supplemental
measures to net income because they may help both investors and
management to understand the operations of our properties. We use
NOI and Cash Basis NOI internally to evaluate individual, regional
and combined property level performance, and we believe that NOI
and Cash Basis NOI provide useful information to investors
regarding our results of operations because they reflect only those
income and expense items that are incurred at the property level
and may facilitate comparisons of our operating performance between
periods and with other REITs. The calculations of NOI and Cash
Basis NOI exclude certain components of net income in order to
provide results that are more closely related to our properties'
results of operations. NOI and Cash Basis NOI do not represent cash
generated by operating activities in accordance with GAAP, and
should not be considered as alternatives to net income, net income
attributable to Equity Commonwealth, net income available for EQC
common shareholders, operating income or cash flow from operating
activities, determined in accordance with GAAP, or as indicators of
our financial performance or liquidity, nor are these measures
necessarily indicative of sufficient cash flow to fund all of our
needs. These measures should be considered in conjunction with net
income, net income attributable to Equity Commonwealth, net income
available for EQC common shareholders, operating income and cash
flow from operating activities as presented in our condensed
consolidated statements of operations, condensed consolidated
statements of comprehensive income (loss) and condensed
consolidated statements of cash flows. Other REITs and real estate
companies may calculate NOI and Cash Basis NOI differently than we
do.
Equity CommonwealthSarah Byrnes, Investor Relations(312)
646-2801www.eqcre.com
Equity Commonwealth (NYSE:EQC)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Equity Commonwealth (NYSE:EQC)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024