CHICAGO--(BUSINESS WIRE)--
Equity Commonwealth (NYSE: EQC) today reported its financial results for
the quarter ended September 30, 2017. All per share results are reported
on a diluted basis.
Financial results for the quarter ended September 30, 2017
Net income attributable to common shareholders was $31.2 million, or
$0.25 per share, for the quarter ended September 30, 2017. This compares
to net income attributable to common shareholders of $84.4 million, or
$0.67 per share, for the quarter ended September 30, 2016.
Funds from Operations (FFO), as defined by the National Association of
Real Estate Investment Trusts, for the quarter ended September 30, 2017,
were $27.0 million, or $0.22 per share. This compares to FFO for the
quarter ended September 30, 2016 of $31.1 million, or $0.25 per share.
Normalized FFO was $24.0 million, or $0.19 per share. This compares to
Normalized FFO for the quarter ended September 30, 2016 of $28.9
million, or $0.23 per share. The following items impacted Normalized FFO
for the quarter ended September 30, 2017, compared to the corresponding
2016 period:
-
($0.16) per share of income from properties sold as part of the
company’s previously announced repositioning plan;
- $0.08 per share of interest expense savings; and
- $0.04 per share of additional interest income.
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.
The weighted average number of diluted common shares outstanding for the
quarter ended September 30, 2017 was 125,174,651 shares, compared to
126,568,096 for the quarter ended September 30, 2016.
Same property results for the quarter ended September 30, 2017
The company’s same property portfolio consisted of 20 properties
totaling 11.0 million square feet. Operating results were as follows:
-
The same property portfolio was 88.3% leased as of September 30, 2017,
compared to 87.7% as of June 30, 2017, and 89.6% as of September 30,
2016.
-
The same property portfolio commenced occupancy was 85.5% as of
September 30, 2017, compared to 85.5% as of June 30, 2017, and 87.0%
as of September 30, 2016.
-
Same property NOI increased 4.7% when compared to the same period in
2016.
-
Same property cash NOI decreased 4.4% when compared to the same period
in 2016.
-
The company entered into leases for approximately 273,000 square feet,
including new leases for approximately 192,000 square feet and renewal
leases for approximately 81,000 square feet.
-
GAAP rental rates on new and renewal leases were 7.8% higher compared
to prior GAAP rental rates for the same space.
-
Cash rental rates on new and renewal leases were 2.3% higher compared
to prior cash rental rates for the same space.
The definitions and reconciliations of same property NOI and same
property cash NOI to operating income, determined in accordance with
GAAP, are included at the end of this press release. The same property
portfolio includes properties continuously owned from July 1, 2016
through September 30, 2017 and excludes land parcels.
Significant events during the quarter ended September 30, 2017
-
The company redeemed at par its $250 million 6.65% Senior Unsecured
Notes due in 2018.
-
The company sold seven properties totaling 3,401,000 square feet for a
gross sales price of $544.1 million. The assets sold during the
quarter include the following:
-
1500 Market, also known as Centre Square, a 91.2% leased,
1,759,000 square foot office property in Philadelphia, PA, for a
gross sale price of $328 million. This property was held for sale
as of June 30, 2017.
-
A five-property office and industrial portfolio totaling 1,002,000
square feet located in Maryland, Minnesota and Missouri, for a
gross sale price of $84 million. These properties were held for
sale as of June 30, 2017.
- 6600 North Military Drive, a 100% leased, 640,000 square foot
office property in Boca Raton, FL, for a gross sale price of
$132.1 million.
-
The company currently has seven properties totaling 4.7 million square
feet in various stages of the sales process.
Earnings Conference Call & Supplemental Data
Equity Commonwealth will host a conference call to discuss third quarter
results on Wednesday, October 25, 2017, at 9:00 A.M. CDT. The conference
call will be available via live audio webcast on the Investor Relations
section of the company’s website (www.eqcre.com).
A replay of the audio webcast will also be available following the call.
A copy of EQC’s Third Quarter 2017 Supplemental Operating and Financial
Data is available for download on the Investor Relations section of
EQC’s website at www.eqcre.com.
About Equity Commonwealth
Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed
and self-advised real estate investment trust (REIT) with commercial
office properties throughout the United States. EQC’s portfolio is
comprised of 20 properties and 11 million square feet.
Regulation FD Disclosures
We intend to use any of the following to comply with our disclosure
obligations under Regulation FD: press releases, SEC filings, public
conference calls, or our website. We post important information on our
website at www.eqcre.com,
including information that may be deemed to be material. We encourage
investors and others interested in the company to monitor these
distribution channels for material disclosures.
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 marketing the
company’s properties for sale, consummating asset sales and identifying
future investment opportunities. 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 Securities Exchange Act of
1934. 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,” “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
the company’s current views about future events and are subject to
numerous known and unknown risks, uncertainties, assumptions and changes
in circumstances that may cause the company’s 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 the company’s 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 the
company’s future results to differ materially from any forward-looking
statements, see the section entitled “Risk Factors” in the company’s
most recent Annual Report on Form 10-K and in the company’s Quarterly
Reports on Form 10-Q for subsequent quarters.
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (amounts in thousands, except share data) |
|
| |
| |
| |
|
|
|
|
|
| September 30, 2017 |
| December 31, 2016 |
| ASSETS |
|
|
|
|
|
Real estate properties:
| | | | |
|
Land
| |
$
|
216,957
| | |
$
|
286,186
| |
|
Buildings and improvements
| |
1,841,230
|
| |
2,570,704
|
|
| |
2,058,187
| | |
2,856,890
| |
|
Accumulated depreciation
| |
(554,411
|
)
| |
(755,255
|
)
|
| |
1,503,776
| | |
2,101,635
| |
|
Acquired real estate leases, net
| |
28,108
| | |
48,281
| |
|
Cash and cash equivalents
| |
2,233,077
| | |
2,094,674
| |
|
Marketable securities
| |
279,626
| | |
—
| |
|
Restricted cash
| |
7,657
| | |
6,532
| |
|
Rents receivable, net of allowance for doubtful accounts of $4,217
and $5,105, respectively
| |
107,832
| | |
152,031
| |
|
Other assets, net
|
|
100,213
|
|
|
122,922
|
|
| Total assets |
| $ | 4,260,289 |
|
| $ | 4,526,075 |
|
|
|
|
|
|
|
| LIABILITIES AND EQUITY |
|
|
|
|
|
Revolving credit facility
| |
$
|
—
| | |
$
|
—
| |
|
Senior unsecured debt, net
| |
815,577
| | |
1,063,950
| |
|
Mortgage notes payable, net
| |
34,999
| | |
77,717
| |
|
Accounts payable and accrued expenses
| |
63,506
| | |
95,395
| |
|
Assumed real estate lease obligations, net
| |
1,215
| | |
1,946
| |
|
Rent collected in advance
| |
14,355
| | |
18,460
| |
|
Security deposits
|
|
5,938
|
|
|
8,160
|
|
| Total liabilities |
| $ | 935,590 |
|
| $ | 1,265,628 |
|
| | | |
|
|
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; 4,915,196
shares issued and outstanding, aggregate liquidation preference of
$122,880 | |
$
|
119,263
| | |
$
|
119,263
| |
|
Common shares of beneficial interest, $0.01 par value: 350,000,000
shares authorized; 124,089,443 and 123,994,465 shares issued and
outstanding, respectively
| |
1,241
| | |
1,240
| |
|
Additional paid in capital
| |
4,378,184
| | |
4,363,177
| |
|
Cumulative net income
| |
2,617,820
| | |
2,566,603
| |
|
Cumulative other comprehensive income (loss)
| |
2,671
| | |
(208
|
)
|
|
Cumulative common distributions
| |
(3,111,868
|
)
| |
(3,111,868
|
)
|
|
Cumulative preferred distributions
| |
(683,751
|
)
| |
(677,760
|
)
|
|
Total shareholders’ equity
| |
3,323,560
| | |
3,260,447
| |
|
Noncontrolling interest
|
|
1,139
|
|
|
—
|
|
| Total equity |
| $ | 3,324,699 |
|
| $ | 3,260,447 |
|
| Total liabilities and equity |
| $ | 4,260,289 |
|
| $ | 4,526,075 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(amounts in thousands, except per share data) |
|
| |
| | |
| |
|
|
|
|
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2017 |
| 2016 |
| 2017 |
| 2016 |
|
Revenues:
| | |
| | | |
| | |
|
Rental income
| |
$
|
61,091
| | |
$
|
92,722
| | |
$
|
215,648
| | |
$
|
324,345
| |
|
Tenant reimbursements and other income
|
|
16,707
|
|
|
21,910
|
|
|
53,300
|
|
|
72,789
|
|
| Total revenues |
| $ | 77,798 |
|
| $ | 114,632 |
|
| $ | 268,948 |
|
| $ | 397,134 |
|
| | | | | | | | |
|
|
Expenses:
| | | | | | | | | |
|
Operating expenses
| |
$
|
32,380
| | |
$
|
49,313
| | |
$
|
110,751
| | |
$
|
157,964
| |
|
Depreciation and amortization
| |
21,133
| | |
29,184
| | |
71,970
| | |
102,766
| |
|
General and administrative
| |
11,689
| | |
13,277
| | |
35,727
| | |
38,766
| |
|
Loss on asset impairment
|
|
—
|
|
|
—
|
|
|
19,714
|
|
|
43,736
|
|
| Total expenses |
| $ | 65,202 |
|
| $ | 91,774 |
|
| $ | 238,162 |
|
| $ | 343,232 |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
| $ | 12,596 |
|
| $ | 22,858 |
|
| $ | 30,786 |
|
| $ | 53,902 |
|
| | | | | | | | |
|
|
Interest and other income
| |
7,596
| | |
3,013
| | |
17,987
| | |
7,184
| |
|
Interest expense (including net amortization of debt discounts,
premiums and deferred financing fees of $784, $948, $2,346 and
$2,880, respectively)
| |
(11,510
|
)
| |
(21,427
|
)
| |
(41,387
|
)
| |
(65,074
|
)
|
|
Loss on early extinguishment of debt
| |
(203
|
)
| |
—
| | |
(266
|
)
| |
(118
|
)
|
|
Foreign currency exchange loss
| |
—
| | |
—
| | |
—
| | |
(5
|
)
|
|
Gain on sale of properties, net
| |
25,080
|
| |
82,169
|
| |
44,670
|
| |
225,210
|
|
|
Income before income taxes
| |
33,559
| | |
86,613
| | |
51,790
| | |
221,099
| |
|
Income tax expense
|
|
(335
|
)
|
|
(225
|
)
|
|
(555
|
)
|
|
(465
|
)
|
| Net income |
| $ | 33,224 |
|
| $ | 86,388 |
|
| $ | 51,235 |
|
| $ | 220,634 |
|
|
Net income attributable to noncontrolling interest
|
|
(12
|
)
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
| Net income attributable to Equity Commonwealth |
| $ | 33,212 |
|
| $ | 86,388 |
|
| $ | 51,217 |
|
| 220,634 |
|
|
Preferred distributions
| |
(1,997
|
)
| |
(1,997
|
)
| |
(5,991
|
)
| |
(15,959
|
)
|
|
Excess fair value of consideration paid over carrying value of
preferred shares (1) |
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,609
|
)
|
| Net income attributable to Equity Commonwealth common shareholders |
| $ | 31,215 |
|
| $ | 84,391 |
|
| $ | 45,226 |
|
| $ | 195,066 |
|
| | | | | | | | | | | |
|
|
Weighted average common shares outstanding — basic (2) | |
124,089
|
| |
125,533
|
| |
124,068
|
| |
125,627
|
|
|
Weighted average common shares outstanding — diluted (2) | |
125,175
|
| |
126,568
|
| |
125,194
|
| |
127,009
|
|
| | | | | | | | |
|
|
Earnings per common share attributable to Equity Commonwealth common
shareholders:
| | | | | | | | | |
|
Basic
| |
$
|
0.25
|
| |
$
|
0.67
|
| |
$
|
0.36
|
| |
$
|
1.55
|
|
|
Diluted
| |
$
|
0.25
|
| |
$
|
0.67
|
| |
$
|
0.36
|
| |
$
|
1.54
|
|
|
(1)
|
|
On May 15, 2016, we redeemed all of our 11,000,000 outstanding
series E preferred shares at a price of $25.00 per share, for a
total of $275.0 million, plus any accrued and unpaid dividends. The
redemption payment occurred on May 16, 2016 (the first business day
following the redemption date). We recorded $9.6 million related to
the excess fair value of consideration paid over the carrying value
of the preferred shares as a reduction to net income attributable to
Equity Commonwealth common shareholders for the nine months ended
September 30, 2016.
|
| |
|
|
(2)
| |
As of September 30, 2017, we had granted RSUs and LTIP Units to
certain employees, officers, and trustees. RSUs and LTIP Units
contain service and market-based vesting components. None of the
RSUs or LTIP Units have vested. If the market-based vesting
component of these awards was measured as of September 30, 2017, and
2016, 1,085 and 1,035 common shares would be issued, respectively.
Using a weighted average basis, 1,086 and 1,035 common shares are
reflected in diluted earnings per share for the three months ended
September 30, 2017 and 2016, respectively, and 1,126 and 1,382
common shares are reflected in diluted earnings per share for the
nine months ended September 30, 2017 and 2016, respectively.
|
| CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO |
| (amounts in thousands, except per share data) |
|
| |
| |
| |
|
|
|
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
|
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| Calculation of FFO |
|
|
|
|
|
|
|
|
|
Net income
| |
$
|
33,224
| |
|
$
|
86,388
| | |
$
|
51,235
| |
|
$
|
220,634
| |
|
Real estate depreciation and amortization
| |
20,842
| | |
28,907
| | |
71,077
| | |
102,015
| |
|
Loss on asset impairment
| |
—
| | |
—
| | |
19,714
| | |
43,736
| |
|
Gain on sale of properties, net
| |
(25,080
|
)
| |
(82,169
|
)
| |
(44,670
|
)
| |
(225,210
|
)
|
|
FFO attributable to Equity Commonwealth | |
28,986
| | |
33,126
| | |
97,356
| | |
141,175
| |
|
Preferred distributions
| |
(1,997
|
)
| |
(1,997
|
)
| |
(5,991
|
)
| |
(15,959
|
)
|
|
Excess fair value of consideration paid over carrying value of
preferred shares (1) |
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,609
|
)
|
| FFO attributable to EQC common shareholders and unitholders |
| $ | 26,989 |
|
| $ | 31,129 |
|
| $ | 91,365 |
|
| $ | 115,607 |
|
|
|
|
|
|
|
|
|
|
|
| Calculation of Normalized FFO |
|
|
|
|
|
|
|
|
|
FFO attributable to EQC common shareholders and unitholders
| |
$
|
26,989
| | |
$
|
31,129
| | |
$
|
91,365
| | |
$
|
115,607
| |
|
Lease value amortization
| |
388
| | |
882
| | |
1,479
| | |
5,870
| |
|
Straight line rent adjustments
| |
(3,557
|
)
| |
(2,954
|
)
| |
(12,487
|
)
| |
(12,384
|
)
|
|
Loss on early extinguishment of debt
| |
203
| | |
—
| | |
266
| | |
118
| |
|
Transition related expenses (2) | |
—
| | |
(138
|
)
| |
—
| | |
999
| |
|
Foreign currency exchange loss
| |
—
| | |
—
| | |
—
| | |
5
| |
|
Excess fair value of consideration paid over carrying value of
preferred shares (1) |
|
—
|
|
|
—
|
|
|
—
|
|
|
9,609
|
|
| Normalized FFO attributable to EQC common shareholders and
unitholders |
| $ | 24,023 |
|
| $ | 28,919 |
|
| $ | 80,623 |
|
| $ | 119,824 |
|
| | | | | | | |
|
|
Weighted average common shares and units outstanding -- basic (3) | |
124,132
|
| |
125,533
|
| |
124,105
|
| |
125,627
|
|
|
Weighted average common shares and units outstanding -- diluted (3) | |
125,175
|
| |
126,568
|
| |
125,194
|
| |
127,009
|
|
|
FFO attributable to EQC common shareholders and unitholders per
share -- basic
| |
$
|
0.22
|
| |
$
|
0.25
|
| |
$
|
0.74
|
| |
$
|
0.92
|
|
|
FFO attributable to EQC common shareholders and unitholders per
share -- diluted
| |
$
|
0.22
|
| |
$
|
0.25
|
| |
$
|
0.73
|
| |
$
|
0.91
|
|
|
Normalized FFO attributable to EQC common shareholders and
unitholders per share -- basic
| |
$
|
0.19
|
| |
$
|
0.23
|
| |
$
|
0.65
|
| |
$
|
0.95
|
|
|
Normalized FFO attributable to EQC common shareholders and
unitholders per share -- diluted
| |
$
|
0.19
|
| |
$
|
0.23
|
| |
$
|
0.64
|
| |
$
|
0.94
|
|
|
(1)
|
|
On May 15, 2016, we redeemed all of our 11,000,000 outstanding
series E preferred shares at a price of $25.00 per share, for a
total of $275.0 million, plus any accrued and unpaid dividends. The
redemption payment occurred on May 16, 2016 (the first business day
following the redemption date). We recorded $9.6 million related to
the excess fair value of consideration paid over the carrying value
of the preferred shares as a reduction to net income attributable to
Equity Commonwealth common shareholders for the nine months ended
September 30, 2016.
|
|
| | | |
|
(2)
| |
Transition related expenses are primarily related to the
shareholder-approved liability for the reimbursement of expenses
incurred by Related/Corvex beginning in February 2013 in connection
with their consent solicitations to remove the former Trustees,
elect the new Board of Trustees and engage in related litigation. No
transition related expenses were incurred during 2017. There is no
future obligation to pay any amounts under the shareholder-approved
agreement to Related/Corvex.
|
| | |
|
|
(3)
| |
As of September 30, 2017, we had granted RSUs and LTIP Units to
certain employees, officers, and trustees. RSUs and LTIP Units
contain service and market-based vesting components. None of the
RSUs or LTIP Units have vested. If the market-based vesting
component of these awards was measured as of September 30, 2017, and
2016, 1,085 and 1,035 common shares would be issued, respectively.
Using a weighted average basis, 1,086 and 1,035 common shares are
reflected in diluted FFO per common share, and diluted Normalized
FFO per common share for the three months ended September 30, 2017
and 2016, respectively and 1,126 and 1,382 common shares are
reflected in diluted FFO per common share and diluted Normalized FFO
per common for the nine months ended September 30, 2017 and 2016,
respectively.
|
|
|
|
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. Our calculation of
Normalized FFO differs from NAREIT’s definition of FFO because we
exclude certain items that we view as nonrecurring or impacting
comparability from period to period. FFO and Normalized FFO are
supplemental non-GAAP financial measures. We consider FFO and
Normalized FFO to be appropriate measures of operating performance
for a REIT, along with net income (loss), net income (loss)
attributable to Equity Commonwealth common shareholders, operating
income (loss) 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 do not represent cash
generated by operating activities in accordance with GAAP and should
not be considered as alternatives to net income (loss), net income
(loss) attributable to Equity Commonwealth common shareholders,
operating income (loss) 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 (loss), net income (loss) attributable to Equity Commonwealth
common shareholders, operating income (loss) and cash flow from
operating activities as presented in our condensed consolidated
statements of operations, condensed consolidated statements of
comprehensive income and condensed consolidated statements of cash
flows. Other REITs and real estate companies may calculate FFO and
Normalized FFO differently than we do.
|
| CALCULATION OF SAME PROPERTY NET OPERATING INCOME (NOI) AND SAME
PROPERTY CASH BASIS NOI |
| (amounts in thousands) |
|
| |
| |
| |
|
|
|
| | For the Three Months Ended | | For the Nine Months Ended |
| | September 30, | | September 30, |
| | 2017 |
| 2016 |
| 2017 |
| 2016 |
| Calculation of Same Property NOI and Same Property Cash Basis NOI: | | |
| | | |
| |
|
Rental income
| |
$
|
61,091
| | |
$
|
92,722
| | |
$
|
215,648
| | |
$
|
324,345
| |
|
Tenant reimbursements and other income
| |
16,707
| | |
21,910
| | |
53,300
| | |
72,789
| |
|
Operating expenses
|
|
(32,380
|
)
|
|
(49,313
|
)
|
|
(110,751
|
)
|
|
(157,964
|
)
|
| NOI |
| $ | 45,418 |
|
| $ | 65,319 |
|
| $ | 158,197 |
|
| $ | 239,170 |
|
|
Straight line rent adjustments
| |
(3,557
|
)
| |
(2,954
|
)
| |
(12,487
|
)
| |
(12,384
|
)
|
|
Lease value amortization
| |
388
| | |
882
| | |
1,479
| | |
5,870
| |
|
Lease termination fees
|
|
(1,477
|
)
|
|
(1,825
|
)
|
|
(4,002
|
)
|
|
(19,569
|
)
|
| Cash Basis NOI |
| $ | 40,772 |
|
| $ | 61,422 |
|
| $ | 143,187 |
|
| $ | 213,087 |
|
|
Cash Basis NOI from non-same properties (1) |
|
(2,917
|
)
|
|
(21,810
|
)
|
|
(29,784
|
)
|
|
(93,796
|
)
|
| Same Property Cash Basis NOI |
| $ | 37,855 |
|
| $ | 39,612 |
|
| $ | 113,403 |
|
| $ | 119,291 |
|
|
Non-cash rental income and lease termination fees from same
properties
|
|
4,728
|
|
|
1,069
|
|
|
13,507
|
|
|
7,450
|
|
| Same Property NOI |
| $ | 42,583 |
|
| $ | 40,681 |
|
| $ | 126,910 |
|
| $ | 126,741 |
|
| | | | | | | |
|
| Reconciliation of Same Property NOI to GAAP Operating Income: |
|
|
|
|
|
|
|
|
| Same Property NOI |
| $ | 42,583 |
|
| $ | 40,681 |
|
| $ | 126,910 |
|
| $ | 126,741 |
|
|
Non-cash rental income and lease termination fees from same
properties
|
|
(4,728
|
)
|
|
(1,069
|
)
|
|
(13,507
|
)
|
|
(7,450
|
)
|
| Same Property Cash Basis NOI |
| $ | 37,855 |
|
| $ | 39,612 |
|
| $ | 113,403 |
|
| $ | 119,291 |
|
|
Cash Basis NOI from non-same properties (1) |
|
2,917
|
|
|
21,810
|
|
|
29,784
|
|
|
93,796
|
|
| Cash Basis NOI |
| $ | 40,772 |
|
| $ | 61,422 |
|
| $ | 143,187 |
|
| $ | 213,087 |
|
|
Straight line rent adjustments
| |
3,557
| | |
2,954
| | |
12,487
| | |
12,384
| |
|
Lease value amortization
| |
(388
|
)
| |
(882
|
)
| |
(1,479
|
)
| |
(5,870
|
)
|
|
Lease termination fees
|
|
1,477
|
|
|
1,825
|
|
|
4,002
|
|
|
19,569
|
|
| NOI |
| $ | 45,418 |
|
| $ | 65,319 |
|
| $ | 158,197 |
|
| $ | 239,170 |
|
|
Depreciation and amortization
| |
(21,133
|
)
| |
(29,184
|
)
| |
(71,970
|
)
| |
(102,766
|
)
|
|
General and administrative
| |
(11,689
|
)
| |
(13,277
|
)
| |
(35,727
|
)
| |
(38,766
|
)
|
|
Loss on asset impairment
|
|
—
|
|
|
—
|
|
|
(19,714
|
)
|
|
(43,736
|
)
|
| Operating Income |
| $ | 12,596 |
|
| $ | 22,858 |
|
| $ | 30,786 |
|
| $ | 53,902 |
|
|
(1)
|
|
Cash Basis NOI from non-same properties for all periods presented
includes the operations of properties disposed or classified as held
for sale and land parcels.
|
|
|
|
NOI is income from our real estate including lease termination fees
received from tenants less our property operating expenses. NOI
excludes amortization of capitalized tenant improvement costs and
leasing commissions and corporate level expenses. Cash Basis NOI is
NOI excluding the effects of straight line rent adjustments, lease
value amortization, and lease termination fees. The quarter-to-date
same property versions of these measures include the results of
properties continuously owned from July 1, 2016 through September
30, 2017. The year-to-date same property versions of these measures
include the results of properties continuously owned from January 1,
2016 through September 30, 2017. Land parcels and properties
classified as held for sale within our condensed consolidated
balance sheets are excluded from the same property versions of these
measures.
|
|
|
|
We consider these supplemental non-GAAP financial measures to be
appropriate supplemental measures to net income (loss) because they
help to understand the operations of our properties. We use these
measures internally to evaluate property level performance, and we
believe that they 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. Cash Basis NOI is among the factors considered
with respect to acquisition, disposition and financing decisions.
These measures do not represent cash generated by operating
activities in accordance with GAAP and should not be considered as
an alternative to net income (loss), net income (loss) attributable
to Equity Commonwealth common shareholders, operating income (loss)
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 (loss), net income
(loss) attributable to Equity Commonwealth common shareholders,
operating income (loss) and cash flow from operating activities as
presented in our condensed consolidated statements of operations,
condensed consolidated statements of comprehensive income and
condensed consolidated statements of cash flows. Other REITs and
real estate companies may calculate these measures differently than
we do.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171024006591/en/
Equity Commonwealth
Sarah Byrnes, Investor Relations
(312)
646-2801
[email protected]
Source: Equity Commonwealth