Document

EX-99.2 3 eqc123121ex992.htm EX-99.2 Document

Exhibit 99.2

Equity Commonwealth

Supplemental Operating

and Financial Information

Full Year 2021

Corporate Headquarters

Investor Relations

Two North Riverside Plaza

Sarah Byrnes

Suite 2100

(312) 646-2801

Chicago, IL 60606

ir@eqcre.com

(312) 646-2800

www.eqcre.com

TABLE OF CONTENTS


Corporate Information
	Company Profile and Investor Information	3

Financial Information
	Key Financial Data	4
	Condensed Consolidated Balance Sheets	5
	Additional Balance Sheet Information	6
	Condensed Consolidated Statements of Operations	7
	Calculation of Same Property Net Operating Income (NOI) and Same Property Cash Basis NOI	8
	Same Property Results of Operations	10
	Calculation of EBITDA, EBITDAre, and Adjusted EBITDAre	11
	Calculation of Funds From Operations (FFO) and Normalized FFO	12

Portfolio Information
	Property Detail	13
	Leasing Summary	14
	Capital Summary - Expenditures & Same Property Leasing Commitments	15
	Tenants Representing 2.5% or More of Annualized Rental Revenue	16
	Same Property Lease Expiration Schedule	17

Additional Support
	Common & Potential Common Shares	18
	Definitions	19

Forward-Looking Statements

Some of the statements contained in this presentation constitute forward-looking statements within the meaning of the federal securities laws including, but not limited to, statements pertaining to our capital resources, portfolio performance, lease expirations schedules, results of operations or anticipated market conditions, including statements reflecting the overall impact of COVID-19 and other external factors on the foregoing. Any forward-looking statements contained in this presentation are intended to be made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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. You can identify forward-looking statements by the use of forward-looking terminology, including but not limited to, “may,” “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 presentation 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). 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 most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q.

Regulation FD Disclosures

We 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 routinely 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.

COMPANY PROFILE AND INVESTOR INFORMATION

Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States.


Same Property Statistics
No. of
Properties	Sq. Feet	% Leased	% Commenced
4	1,507,379	82.3%	79.2%


NYSE Trading Symbols
Common Stock: EQC
Preferred Stock Series D: EQCpD

Board of Trustees

Sam Zell (Chairman)

David A. Helfand

Gerald A. Spector

Ellen-Blair Chube

Peter Linneman (Lead Independent Trustee)

James A. Star

Martin L. Edelman

Mary Jane Robertson

Senior Management

David A. Helfand

David S. Weinberg

President and Chief Executive Officer

Executive Vice President and

Chief Operating Officer

William H. Griffiths

Orrin S. Shifrin

Senior Vice President,

Executive Vice President,

Chief Financial Officer and Treasurer

General Counsel and Secretary


Equity Research Coverage (1)
Bank of America / Merrill Lynch	James Feldman	(646) 855-5808	james.feldman@baml.com
Citigroup	Michael Bilerman	(212) 816-1383	michael.bilerman@citi.com
Green Street Advisors	Daniel Ismail	(949) 640-8780	dismail@greenstreetadvisors.com


Certain terms are defined in the definitions section of this document. All financial data included herein is unaudited.

(1)			Any opinions, estimates or forecasts regarding EQC's performance made by these analysts do not represent opinions, forecasts or predictions of EQC or its management. EQC does not by its reference to the analysts above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts.

KEY FINANCIAL DATA

(Unaudited, amounts in thousands, except per share data)


		As of and for the Three Months Ended
		12/31/2021			9/30/2021			6/30/2021			3/31/2021			12/31/2020
OPERATING INFORMATION
	Ending property count	4			4			4			4			4
	Ending square footage	1,507			1,507			1,507			1,507			1,507
	Percent leased	82.3		%	82.5		%	83.1		%	85.6		%	85.7		%
	Percent commenced	79.2		%	78.6		%	79.6		%	82.2		%	81.7		%
	Net loss attributable to EQC common shareholders	$	(3,631)		$	(4,805)		$	(3,933)		$	(12,015)		$	(3,663)
	Adjusted EBITDAre (1)	2,792			1,806			2,523			1,451			2,880
SAME PROPERTY OPERATING INFORMATION
	Ending square footage	1,507			1,507			1,507			1,507			1,507
	Percent leased	82.3		%	82.5		%	83.1		%	85.6		%	85.7		%
	Percent commenced	79.2		%	78.6		%	79.6		%	82.2		%	81.7		%
	Same Property NOI (1)	7,701			7,791			8,309			8,106			7,317
	Same Property Cash Basis NOI (1)	7,363			7,375			7,748			7,799			7,301
	Same Property NOI margin	53.6		%	56.1		%	55.9		%	55.1		%	51.0		%
	Same Property Cash Basis NOI margin	52.5		%	54.8		%	54.1		%	54.2		%	50.9		%
SHARES OUTSTANDING AND PER SHARE DATA (2)
	Shares Outstanding at End of Period
	Common stock outstanding	115,206			121,511			121,940			121,917			121,523
	Dilutive restricted share units (RSUs), Operating Partnership Units, and LTIP Units (2)	933			1,039			1,012			1,469			1,921

	Preferred Stock Outstanding (3)	4,915			4,915			4,915			4,915			4,915
	Weighted Average Shares Outstanding - GAAP
	Basic & Diluted (4)	119,285			122,190			122,189			122,002			121,673



BALANCE SHEET
	Total assets	$	3,081,383		$	3,244,603		$	3,256,268		$	3,260,676		$	3,277,671
	Total liabilities	26,113			32,769			24,432			29,058			34,507
MARKET CAPITALIZATION

	Market value of preferred shares	$	145,981		$	152,813		$	158,024		$	154,337		$	146,866
	Market value of diluted common shares	3,008,000			3,183,849			3,221,342			3,430,131			3,367,552
	Total Market Capitalization	$	3,153,981		$	3,336,662		$	3,379,366		$	3,584,468		$	3,514,418


(1)			Non-GAAP financial measures are defined and reconciled to the most directly comparable GAAP measure herein.
(2)			Restricted share units (RSUs) and LTIP Units are equity awards that contain both service and market-based vesting components. Refer to the schedule of Common & Potential Common Shares for information regarding RSUs and LTIP Units and their impact on weighted average shares outstanding.
(3)			As of December 31 2021, we had 4,915 series D preferred shares outstanding that were convertible into 3,237 common shares. The series D preferred shares are antidilutive for GAAP EPS for all periods presented. Refer to the schedule of Common & Potential Common Shares for information regarding the series D preferred shares and their impact on diluted weighted average shares outstanding for EPS, FFO per share and Normalized FFO per share.
(4)			Refer to the schedule of Common & Potential Common Shares for information regarding the components of our weighted average common shares outstanding.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except share data)


	December 31,
ASSETS	2021		2020
Real estate properties:
Land	$	44,060	$	44,060
Buildings and improvements	362,042		357,650
	406,102		401,710
Accumulated depreciation	(156,439)		(143,319)
	249,663		258,391



Cash and cash equivalents	2,800,998		2,987,225


Rents receivable	15,549		14,702
Other assets, net	15,173		17,353
Total assets	$	3,081,383	$	3,277,671

LIABILITIES AND EQUITY



Accounts payable, accrued expenses and other	$	19,762	$	20,588

Rent collected in advance	3,986		2,928

Distributions payable	2,365		10,991

Total liabilities	$	26,113	$	34,507

Shareholders’ equity:
Preferred shares of beneficial interest, $0.01 par value: 50,000,000 shares authorized;
Series D preferred shares; 6.50% 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; 115,205,818 and 121,522,555 shares issued and outstanding, respectively	1,152		1,215
Additional paid in capital	4,128,656		4,294,632
Cumulative net income	3,798,552		3,814,948

Cumulative common distributions	(4,281,195)		(4,283,668)
Cumulative preferred distributions	(717,700)		(709,712)
Total shareholders' equity	3,048,728		3,236,678
Noncontrolling interest	6,542		6,486
Total equity	$	3,055,270	$	3,243,164
Total liabilities and equity	$	3,081,383	$	3,277,671

ADDITIONAL BALANCE SHEET INFORMATION

(Unaudited, amounts in thousands)


	December 31,
Additional Balance Sheet Information	2021		2020

Straight-line rents receivable	$	15,140	$	13,733
Accounts receivable	409		969
Rents receivable	$	15,549	$	14,702

Capitalized lease incentives, net	$	1,306	$	1,567

Deferred leasing costs, net	10,394		11,441
Other	3,473		4,345
Other assets, net	$	15,173	$	17,353

Accounts payable	$	2,696	$	2,120

Accrued taxes	6,328		7,072
Accrued capital expenditures	509		986
Accrued leasing costs	154		93
Security deposits	2,192		2,264
Other accrued liabilities	7,883		8,053
Accounts payable, accrued expenses and other	$	19,762	$	20,588

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, amounts in thousands, except per share data)


	Three Months Ended				Year Ended
	December 31,				December 31,
	2021		2020		2021		2020
Revenues:
Rental revenue	$	13,503	$	14,001	$	54,927	$	62,134
Other revenue (1)	892		707		3,075		4,144
Total revenues	$	14,395	$	14,708	$	58,002	$	66,278

Expenses:
Operating expenses	$	6,582	$	6,976	$	25,893	$	28,858
Depreciation and amortization	4,403		4,680		17,774		19,329
General and administrative	6,753		7,136		37,444		33,233


Total expenses	$	17,738	$	18,792	$	81,111	$	81,420

Interest and other income, net	1,732		2,284		6,800		21,228
Interest expense (including net amortization of debt premiums and deferred financing fees of $—, $—, $—, and $(119), respectively)	—		—		—		(620)
Gain on early extinguishment of debt	—		—		—		131



Gain on sale of properties, net	—		208		—		446,744
(Loss) income before income taxes	(1,611)		(1,592)		(16,309)		452,341
Income tax expense	(26)		(78)		(120)		(248)







Net (loss) income	$	(1,637)	$	(1,670)	$	(16,429)	$	452,093
Net loss (income) attributable to noncontrolling interest	3		4		33		(799)
Net (loss) income attributable to Equity Commonwealth	$	(1,634)	$	(1,666)	$	(16,396)	$	451,294
Preferred distributions	(1,997)		(1,997)		(7,988)		(7,988)

Net (loss) income attributable to Equity Commonwealth common shareholders	$	(3,631)	$	(3,663)	$	(24,384)	$	443,306


Weighted average common shares outstanding — basic (2)	119,285		121,673		121,411		121,786
Weighted average common shares outstanding — diluted (2)	119,285		121,673		121,411		126,606

Earnings per common share attributable to Equity Commonwealth common shareholders:


Basic	$	(0.03)	$	(0.03)	$	(0.20)	$	3.64



Diluted	$	(0.03)	$	(0.03)	$	(0.20)	$	3.56


(1)			Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
(2)			Refer to the schedule of Common & Potential Common Shares for information regarding the components of our weighted average common shares outstanding.

CALCULATION OF SAME PROPERTY NET OPERATING INCOME (NOI) AND SAME PROPERTY CASH BASIS NOI

(Unaudited, amounts in thousands)


	Three Months Ended
	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Calculation of Same Property NOI and Same Property Cash Basis NOI:
Rental revenue	$	13,503	$	13,141	$	14,114	$	14,169	$	14,001
Other revenue (1)	892		740		761		682		707
Operating expenses	(6,582)		(6,102)		(6,588)		(6,621)		(6,976)
NOI	$	7,813	$	7,779	$	8,287	$	8,230	$	7,732
Straight-line rent adjustments	(130)		(409)		(561)		(307)		(6)

Lease termination fees	(209)		(7)		—		—		(10)
Cash Basis NOI	$	7,474	$	7,363	$	7,726	$	7,923	$	7,716
Cash Basis NOI from non-same properties (2)	(111)		12		22		(124)		(415)
Same Property Cash Basis NOI	$	7,363	$	7,375	$	7,748	$	7,799	$	7,301
Non-cash rental income and lease termination fees from same properties	338		416		561		307		16
Same Property NOI	$	7,701	$	7,791	$	8,309	$	8,106	$	7,317

Reconciliation of Same Property NOI to GAAP Net Loss:
Same Property NOI	$	7,701	$	7,791	$	8,309	$	8,106	$	7,317
Non-cash rental income and termination fees from same properties	(338)		(416)		(561)		(307)		(16)
Same Property Cash Basis NOI	$	7,363	$	7,375	$	7,748	$	7,799	$	7,301
Cash Basis NOI from non-same properties (2)	111		(12)		(22)		124		415
Cash Basis NOI	$	7,474	$	7,363	$	7,726	$	7,923	$	7,716
Straight-line rent adjustments	130		409		561		307		6

Lease termination fees	209		7		—		—		10
NOI	$	7,813	$	7,779	$	8,287	$	8,230	$	7,732
Depreciation and amortization	(4,403)		(4,588)		(4,432)		(4,351)		(4,680)
General and administrative	(6,753)		(7,572)		(7,390)		(15,729)		(7,136)
Interest and other income, net	1,732		1,599		1,626		1,843		2,284
Interest expense	—		—		—		—		—
Gain on early extinguishment of debt	—		—		—		—		—
Gain on sale of properties, net	—		—		—		—		208
Loss before income taxes	$	(1,611)	$	(2,782)	$	(1,909)	$	(10,007)	$	(1,592)
Income tax expense	(26)		(32)		(31)		(31)		(78)
Net loss	$	(1,637)	$	(2,814)	$	(1,940)	$	(10,038)	$	(1,670)


(1)			Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
(2)			Cash Basis NOI from non-same properties for all periods presented includes the operations of disposed properties.

CALCULATION OF SAME PROPERTY NET OPERATING INCOME (NOI) AND SAME PROPERTY CASH BASIS NOI

(Unaudited, amounts in thousands)


	For the Year Ended December 31,
	2021		2020
Calculation of Same Property NOI and Same Property Cash Basis NOI:
Rental revenue	$	54,927	$	62,134
Other revenue (1)	3,075		4,144
Operating expenses	(25,893)		(28,858)
NOI	$	32,109	$	37,420
Straight-line rent adjustments	(1,407)		340

Lease termination fees	(216)		(1,310)
Cash Basis NOI	$	30,486	$	36,450
Cash Basis NOI from non-same properties (2)	(201)		(3,253)
Same Property Cash Basis NOI	$	30,285	$	33,197
Non-cash rental income and lease termination fees from same properties	1,622		1,169
Same Property NOI	$	31,907	$	34,366

Reconciliation of Same Property NOI to GAAP Net (Loss) Income:
Same Property NOI	$	31,907	$	34,366
Non-cash rental income and lease termination fees from same properties	(1,622)		(1,169)
Same Property Cash Basis NOI	$	30,285	$	33,197
Cash Basis NOI from non-same properties (2)	201		3,253
Cash Basis NOI	$	30,486	$	36,450
Straight-line rent adjustments	1,407		(340)

Lease termination fees	216		1,310
NOI	$	32,109	$	37,420
Depreciation and amortization	(17,774)		(19,329)
General and administrative	(37,444)		(33,233)

Interest and other income, net	6,800		21,228
Interest expense	—		(620)
Gain on early extinguishment of debt	—		131
Gain on sale of properties, net	—		446,744
(Loss) income before income taxes	$	(16,309)	$	452,341
Income tax expense	(120)		(248)
Net (loss) income	$	(16,429)	$	452,093


(1)			Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
(2)			Cash Basis NOI from non-same properties for all periods presented includes the operations of disposed properties.

SAME PROPERTY RESULTS OF OPERATIONS

(Unaudited, dollars and square feet in thousands)


	As of and for the Three Months Ended December 31,								As of and for the Year Ended December 31,
	2021			2020			% Change		2021			2020			% Change
Properties	4			4					4			4
Square Feet	1,507			1,507					1,507			1,507
% Leased	82.3		%	85.7		%	(3.4)	%	82.3		%	85.7		%	(3.4)	%
% Commenced	79.2		%	81.7		%	(2.5)	%	79.2		%	81.7		%	(2.5)	%

Rental revenue	$	13,167		$	13,701		(3.9)	%	$	53,165		$	56,218		(5.4)	%
Other revenue (1)	865			631			37.1	%	3,047			3,833			(20.5)	%
Straight-line rent adjustments	130			6					1,407			(141)

Lease termination fees	208			10					215			1,310
Total revenue	14,370			14,348			0.2	%	57,834			61,220			(5.5)	%
Operating expenses	(6,669)			(7,031)			(5.1)	%	(25,927)			(26,854)			(3.5)	%
NOI	$	7,701		$	7,317		5.2	%	$	31,907		$	34,366		(7.2)	%
NOI Margin	53.6		%	51.0		%			55.2		%	56.1		%

Straight-line rent adjustments	(130)			(6)					(1,407)			141

Lease termination fees	(208)			(10)					(215)			(1,310)
Cash Basis NOI	$	7,363		$	7,301		0.8	%	$	30,285		$	33,197		(8.8)	%
Cash Basis NOI Margin	52.5		%	50.9		%			53.9		%	55.3		%


(1)			Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.

CALCULATION OF EBITDA, EBITDAre, AND ADJUSTED EBITDAre

(Unaudited, amounts in thousands)


	Three Months Ended				Year Ended
	December 31,				December 31,
	2021		2020		2021		2020
Net (loss) income	$	(1,637)	$	(1,670)	$	(16,429)	$	452,093
Interest expense	—		—		—		620
Income tax expense	26		78		120		248
Depreciation and amortization	4,403		4,680		17,774		19,329
EBITDA	$	2,792	$	3,088	$	1,465	$	472,290

Gain on sale of properties, net	—		(208)		—		(446,744)
EBITDAre	$	2,792	$	2,880	$	1,465	$	25,546
Adjustments to EBITDAre:
Gain on early extinguishment of debt	—		—		—		(131)
Executive severance expense	—		—		7,107		—


Adjusted EBITDAre	$	2,792	$	2,880	$	8,572	$	25,415

CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO

(Unaudited, amounts in thousands, except per share data)


	Three Months Ended				Year Ended
	December 31,				December 31,
	2021		2020		2021		2020
Calculation of FFO
Net (loss) income	$	(1,637)	$	(1,670)	$	(16,429)	$	452,093
Real estate depreciation and amortization	4,361		4,470		17,593		18,442




Gain on sale of properties, net	—		(208)		—		(446,744)

FFO attributable to Equity Commonwealth	2,724		2,592		1,164		23,791
Preferred distributions	(1,997)		(1,997)		(7,988)		(7,988)

FFO attributable to EQC common shareholders and unitholders	$	727	$	595	$	(6,824)	$	15,803

Calculation of Normalized FFO
FFO attributable to EQC common shareholders and unitholders	$	727	$	595	$	(6,824)	$	15,803

Straight-line rent adjustments	(130)		(6)		(1,407)		340
Sold property expense included in interest and other income, net	(225)		—		(225)		515
Gain on early extinguishment of debt	—		—		—		(131)
Executive severance expense	—		—		7,107		—


Taxes related to property sales included in general and administrative	—		14		—		1,472
Taxes related to property sales, net included in income tax expense	—		(48)		—		130












Normalized FFO attributable to EQC common shareholders and unitholders	$	372	$	555	$	(1,349)	$	18,129

Weighted average common shares and units outstanding -- basic (1)	119,532		121,916		121,656		122,007
Weighted average common shares and units outstanding -- diluted (1)	119,958		123,445		121,656		123,590

FFO attributable to EQC common shareholders and unitholders per share and unit -- basic and diluted	$	0.01	$	0.00	$	(0.06)	$	0.13

Normalized FFO attributable to EQC common shareholders and unitholders per share and unit -- basic and diluted	$	0.00	$	0.00	$	(0.01)	$	0.15


(1)			Our calculations of FFO and Normalized FFO attributable to EQC common shareholders and unitholders per share and unit - basic for the three months ended December 31, 2021 and 2020 include 247 and 243 LTIP/Operating Partnership Units, respectively, that are excluded from the calculation of basic earnings per common share attributable to EQC common shareholders (only). Our calculations of FFO and Normalized FFO attributable to EQC common shareholders and unitholders per share and unit - basic for the year ended December 31, 2021 and 2020 include 245 and 221 LTIP/Operating Partnership Units, respectively, that are excluded from the calculation of basic earnings per common share attributable to EQC common shareholders (only). Refer to the schedule of Common & Potential Common Shares for information regarding the components of our weighted average common shares and units outstanding.

PROPERTY DETAIL

As of December 31, 2021

(Unaudited, sorted by annualized rental revenue, dollars in thousands)


Same Property Portfolio(1)
Property		City, State	Type	No. of Buildings	Sq. Feet	% Leased		% Comm-enced		Annualized Rental Revenue		Undepreciated Book Value		Net Book Value		Year Acquired
1	1225 Seventeenth Street	Denver, CO	Office	1	695,372	91.1	%	91.1	%	$	28,305	$	175,833	$	123,084	2009
	(17th Street Plaza)
2	Bridgepoint Square	Austin, TX	Office	5	440,007	67.4	%	67.4	%	12,578		102,821		48,966		1997
3	1250 H Street, NW	Washington, D.C.	Office	1	196,490	81.8	%	72.3	%	7,963		75,549		36,787		1998
4	206 East 9th Street	Austin, TX	Office	1	175,510	85.3	%	69.6	%	7,243		51,899		40,826		2012
	(Capitol Tower)
	Total Same Properties			8	1,507,379	82.3	%	79.2	%	$	56,089	$	406,102	$	249,663


(1)			Refer to the definitions section of this document for a description of our same property portfolio.

LEASING SUMMARY

(Unaudited, dollars and square feet in thousands, except per square foot data)


	As of and for the Three Months Ended
	12/31/2021			9/30/2021			6/30/2021			3/31/2021			12/31/2020
Properties	4			4			4			4			4
Total square feet	1,507			1,507			1,507			1,507			1,507
Percentage leased	82.3		%	82.5		%	83.1		%	85.6		%	85.7		%
Percentage commenced	79.2		%	78.6		%	79.6		%	82.2		%	81.7		%

Total Leases
Square feet	51			9			29			27			39
Lease term (years)	4.8			3.3			6.5			4.9			5.5
Starting cash rent	$	56.04		$	45.24		$	56.43		$	47.03		$	49.09
Percent change in cash rent (1)	(0.0)		%	0.5		%	13.2		%	(17.0)		%	0.4		%
Percent change in GAAP rent (1)	2.8		%	0.3		%	20.3		%	(10.0)		%	12.4		%
Total TI & LC per square foot (2)	$	36.68		$	13.50		$	60.47		$	32.00		$	34.04
Total TI & LC per sq. ft. per year of lease term (2)	$	7.71		$	4.14		$	9.33		$	6.54		$	6.22

Renewal Leases
Square feet	16			3			21			16			29
Lease term (years)	4.8			3.3			5.7			6.7			5.1
Starting cash rent (2)	$	48.78		$	45.89		$	59.70		$	51.77		$	49.25
Percent change in cash rent (1)	(1.2)		%	1.7		%	13.2		%	(22.2)		%	1.2		%
Percent change in GAAP rent (1)	(5.3)		%	(4.9)		%	20.3		%	(14.1)		%	14.1		%
Total TI & LC per square foot (2)	$	21.57		$	2.67		$	43.48		$	47.43		$	29.72
Total TI & LC per sq. ft. per year of lease term (2)	$	4.48		$	0.82		$	7.57		$	7.06		$	5.87

New Leases
Square feet	35			6			8			11			10
Lease term (years)	4.7			3.3			8.5			2.3			6.7
Starting cash rent	$	59.32		$	44.92		$	47.49		$	40.25		$	48.63
Percent change in cash rent (1)	0.5		%	(0.4)		%	—			0.7		%	(3.9)		%
Percent change in GAAP rent (1)	6.4		%	4.0		%	—			2.6		%	3.7		%
Total TI & LC per square foot (2)	$	43.51		$	18.82		$	106.93		$	9.89		$	46.86
Total TI & LC per sq. ft. per year of lease term (2)	$	9.21		$	5.77		$	12.57		$	4.35		$	7.02


The above leasing summary is based on leases executed during the periods indicated and excludes leasing activity for assets during the quarter in which the asset was sold or classified as held for sale. Our same property leasing activity is identical to the information above for all periods presented. Refer to the definitions section of this document for a description of our same property portfolio.

(1)			Percent change in GAAP and cash rents is a comparison of current rent, including estimated tenant expense reimbursements, if any, to the rent, including actual/projected tenant expense reimbursements, if any, last received for the same space on a GAAP and cash basis, respectively. Cash rent during the reporting period is calculated before deducting any initial period free rent. Leasing in suites vacant longer than two years was excluded from the calculation.
(2)			Includes tenant improvements (TI) and leasing commissions (LC).

CAPITAL SUMMARY

EXPENDITURES & SAME PROPERTY LEASING COMMITMENTS

(Unaduited, dollars and square feet in thousands)


CAPITAL SUMMARY	Three Months Ended
EXPENDITURES	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Tenant improvements	$	828	$	1,001	$	394	$	3,219	$	3,782
Leasing costs	695		34		501		268		823
Building improvements (1)	336		219		91		238		385
Total capital expenditures	$	1,859	$	1,254	$	986	$	3,725	$	4,990


Average square feet during period	1,507		1,507		1,507		1,507		1,507

Building improvements per average total sq. ft. during period	$	0.22	$	0.15	$	0.06	$	0.16	$	0.26


CAPITAL SUMMARY	Three Months Ended
SAME PROPERTY LEASING COMMITMENTS	December 31, 2021
	New Leases		Renewal Leases		Total
Square feet leased during the period	35		16		51
Total TI & LC (2)	$	1,523	$	345	$	1,868
Total TI & LC per square foot (2)	$	43.51	$	21.57	$	36.68
Weighted average lease term by square foot (years)	4.7		4.8		4.8
Total TI & LC per square foot per year of lease term (2)	$	9.21	$	4.48	$	7.71


(1)			Tenant-funded capital expenditures are excluded.
(2)			Includes tenant improvements (TI) and leasing commissions (LC).

TENANTS REPRESENTING 2.5% OR MORE OF ANNUALIZED RENTAL REVENUE

As of December 31, 2021

(Unaudited, square feet in thousands)


	Tenant	Square Feet (1)	% of Total Sq. Ft. (1)		% of Annualized Rental Revenue		Weighted Average Remaining Lease Term
1	Equinor Energy Services, Inc.	80	6.5	%	6.0	%	2.0
2	KPMG, LLP	71	5.7	%	5.4	%	7.4
3	Salesforce.com, Inc.	65	5.2	%	5.4	%	3.9
4	Crowdstrike, Inc.	36	2.9	%	3.9	%	2.8
5	CBRE, Inc.	40	3.2	%	3.6	%	6.3
6	Alden Torch Financial, LLC	34	2.7	%	2.7	%	5.2
7	Capitol Services, Inc.	26	2.1	%	2.5	%	0.6

	Total	352	28.3	%	29.5	%	4.2


(1)			Square footage as of December 31, 2021 includes space subject to leases that have commenced for revenue recognition purposes in accordance with GAAP, space being fitted out for occupancy pursuant to existing leases, and space which is leased but is not occupied or is being offered for sublease by tenants.

SAME PROPERTY LEASE EXPIRATION SCHEDULE

As of December 31, 2021

(Unaudited, dollars and sq. ft. in thousands)


Year	Number of Tenants Expiring	Leased Sq. Ft. Expiring (1)	% of Leased Sq. Ft. Expiring		Cumulative % of Leased Sq. Ft. Expiring		Annualized Rental Revenue Expiring (2)		% of Annualized Rental Revenue Expiring		Cumulative % of Annualized Rental Revenue Expiring

2022	11	92	7.4	%	7.4	%	$	4,914	8.8	%	8.8	%
2023	18	199	16.0	%	23.4	%	9,205		16.4	%	25.2	%
2024	17	223	18.0	%	41.4	%	10,222		18.3	%	43.5	%
2025	12	155	12.5	%	53.9	%	7,037		12.5	%	56.0	%
2026	8	76	6.1	%	60.0	%	3,671		6.5	%	62.5	%
2027	13	151	12.2	%	72.2	%	5,135		9.2	%	71.7	%
2028	4	63	5.1	%	77.3	%	3,202		5.7	%	77.4	%
2029	7	145	11.7	%	89.0	%	6,895		12.3	%	89.7	%
2030	4	66	5.3	%	94.3	%	2,771		4.9	%	94.6	%
2031	1	12	1.0	%	95.3	%	588		1.0	%	95.6	%
Thereafter	4	58	4.7	%	100.0	%	2,449		4.4	%	100.0	%
Total	99	1,240	100.0	%			$	56,089	100.0	%
Weighted average remaining
lease term (in years)		4.3					4.3


(1)			Leased square footage as of December 31, 2021 includes space subject to leases that have commenced for revenue recognition purposes in accordance with GAAP, space being fitted out for occupancy pursuant to existing leases, and space which is leased but is not occupied or is being offered for sublease by tenants. The year expiring corresponds to the latest-expiring signed lease for a given suite. Thus, backfilled suites expire in the year stipulated by the new lease.
(2)			Excludes the Annualized Rental Revenue of space that is leased but not commenced.

COMMON & POTENTIAL COMMON SHARES

(Unaudited, share amounts in thousands)


	Three Months Ended		Year Ended
	December 31,		December 31,
Weighted Average Share Calculation - GAAP EPS	2021	2020	2021	2020

Weighted average common shares outstanding - basic (1)	119,285	121,673	121,411	121,786
Weighted average Series D preferred shares convertible to common shares	—	—	—	3,237
Weighted average dilutive RSUs and LTIP Units (2)	—	—	—	1,583
Weighted average common shares outstanding - diluted (1)	119,285	121,673	121,411	126,606

	Three Months Ended		Year Ended
	December 31,		December 31,
Weighted Average Share and Unit Calculation - FFO and Normalized FFO per share and unit	2021	2020	2021	2020
Weighted average EQC common shares outstanding (1)	119,285	121,673	121,411	121,786
Weighted average Operating Partnership Units outstanding (3)	223	113	208	102
Weighted average time-based LTIP Units (2)(3)	24	130	37	119
Weighted average common shares and units outstanding - basic (1)	119,532	121,916	121,656	122,007
Weighted average dilutive RSUs and market-based LTIP Units (2)	426	1,529	—	1,583
Weighted average common shares and units outstanding - diluted (1)	119,958	123,445	121,656	123,590


Rollforward of Share Count to December 31, 2021	Series D Preferred Shares (4)	EQC Common Shares (5)
Outstanding on December 31, 2020	4,915	121,523
Repurchase of common shares	—	(6,736)
Share-based compensation grants and vesting, net (6)	—	419
Outstanding on December 31, 2021	4,915	115,206
Common shares issuable from RSUs, Operating Partnership Units, and LTIP Units as measured on December 31, 2021 (2)		933
Potential common shares as measured on December 31, 2021 (7)		116,139


(1)			Weighted average common shares outstanding for the three months ended December 31, 2021 and 2020 includes 260 and 150 unvested, earned RSUs, respectively. Weighted average common shares outstanding for the year ended December 31, 2021 and 2020 includes 256 and 157 unvested, earned RSUs, respectively.
(2)			We have granted RSUs and LTIP Units to certain employees, officers, eligible consultants and trustees. RSUs and market-based LTIP Units contain service and market-based vesting components. Time-based LTIP Units contain service-based vesting components.
(3)			Our calculations of FFO and Normalized FFO attributable to EQC common shareholders and unitholders per share and unit - basic include time-based LTIP Units and Operating Partnership Units that are excluded from the calculation of basic earnings per common share attributable to EQC common shareholders (only).
(4)			As of December 31, 2021, we had 4,915 series D preferred shares that were convertible into 3,237 common shares. The series D preferred shares are antidilutive for GAAP EPS for the three months and year ended December 31, 2021 and for the three months ended December 31, 2020. They are dilutive for GAAP EPS for the year ended December 31, 2020. The series D preferred shares are antidilutive for FFO per common share and Normalized FFO per common share for all periods presented.
(5)			EQC common shares include unvested restricted shares.
(6)			This amount is net of forfeitures and shares surrendered to satisfy statutory tax withholding obligations.
(7)			Potential common shares as measured on December 31, 2021 include unvested earned RSUs. The 4,915 series D preferred shares outstanding that were convertible into 3,237 common shares as of December 31, 2021 are excluded.

DEFINITIONS

Annualized Rental Revenue

Annualized Rental Revenue is annualized contractual rents from our tenants pursuant to leases which have commenced as of December 31, 2021, plus estimated recurring expense reimbursements; excludes lease value amortization, straight line rent adjustments, abated (“free”) rent periods and parking revenue. We calculate annualized rental revenue by aggregating the recurring billings outlined above for the most recent month during the quarter reported, adding abated rent, and multiplying the sum by 12 to provide an estimation of near-term potentially-recurring revenues. The annualized rental revenue of disposed properties is presented for the quarter-ended preceding each disposition.

Annualized rental revenue is a forward-looking non-GAAP measure. Annualized rental revenue cannot be reconciled to a comparable GAAP measure without unreasonable efforts, primarily due to the fact that it is calculated from the billings of tenants in the most recent month at the most recent rental rates during the quarter reported, whereas historical GAAP measures include billings from a potentially different group of tenants over multiple months at potentially different rental rates.

Building Improvements

Building improvements are expenditures to replace obsolete building components or extend the useful life of existing assets.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDAre, and Adjusted EBITDAre

We calculate EBITDA as net income (loss) excluding interest expense, income tax expense and depreciation and amortization.

We calculate EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts (Nareit). Nareit defines EBITDAre as net income (loss), calculated in accordance with GAAP, plus interest expense, plus income tax expense, plus depreciation and amortization, plus (minus) losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property and investments in unconsolidated joint ventures, plus adjustments to reflect the entity's share of EBITDAre of unconsolidated joint ventures. Our calculation of Adjusted EBITDAre differs from our calculations of EBITDA and EBITDAre because we exclude certain items that we view as nonrecurring or impacting comparability from period to period. EBITDA, EBITDAre and Adjusted EBITDAre are supplemental non-GAAP financial measures.

We consider EBITDA, EBITDAre and Adjusted EBITDAre to be appropriate measures of our operating performance, along with net income (loss), net income (loss) attributable to EQC common shareholders, and cash flow from operating activities. We believe that EBITDA, EBITDAre and Adjusted EBITDAre provide useful information to investors because by excluding the effects of certain historical amounts, such as interest, depreciation and amortization expense, EBITDA, EBITDAre and Adjusted EBITDAre may facilitate a comparison of current operating performance with our past operating performance. EBITDA, EBITDAre and Adjusted EBITDAre do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss), net income (loss) attributable to EQC common shareholders 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 EQC common shareholders 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 EBITDA, EBITDAre and Adjusted EBITDAre differently than we do.

Funds from Operations (FFO) and Normalized FFO

We compute FFO in accordance with standards established by 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 EQC common shareholders 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 EQC common shareholders 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 EQC common shareholders 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.

Leasing Costs

Leasing costs include leasing commissions (LCs) and related legal expenses.

DEFINITIONS

LTIP Units

LTIP Units are a class of beneficial interests in EQC Operating Trust (the Operating Trust) that may be issued to employees, officers or trustees of the Operating Trust, EQC, or their subsidiaries.

Net Operating Income (NOI), Same Property NOI, Cash Basis NOI, and Same Property Cash Basis NOI

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 October 1, 2020 through December 31, 2021. The year-to-date same property versions of these measures include the results of properties continuously owned from January 1, 2020 through December 31, 2021. 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 may 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 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 EQC common shareholders 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.

Net Book Value

Net book value represents the carrying value of real estate properties after depreciation and amortization, purchase price allocations and impairment write-downs, if any.

NOI Margin

NOI Margin is NOI (or the same property or cash basis derivations of NOI defined above) divided by the total revenues used to calculate NOI (or its derivation).

Operating Partnership Units

Operating Partnership Units are beneficial interests in the Operating Trust.

Other Revenue

Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.

Percentage Commenced

Percentage commenced is the percentage of space subject to leases that have commenced for revenue recognition purposes in accordance with GAAP, which includes the space of tenants in a free rent period.

Percentage Leased

Percentage leased is the percentage of space subject to signed leases.

Rental Revenue

Rental revenue is primarily comprised of minimum lease payments from tenants, including tenant reimbursements. In addition, rental revenue includes lease termination fees and straight line rent adjustments.

Same Properties

Our quarter-to-date same property portfolio is comprised of those properties continuously owned from October 1, 2020 through December 31, 2021. Our year-to-date same property portfolio is comprised of those properties continuously owned from January 1, 2020 through December 31, 2021. Properties classified as held for sale within our condensed consolidated balance sheets are excluded.

Tenant Improvements

Tenant improvements are capital expenditures to improve tenant spaces.

DEFINITIONS

Total Market Capitalization

Total market capitalization is the market value of preferred shares plus the market value of diluted common shares. The market value of preferred shares is the product of the number of Series D preferred shares outstanding at the end of the period and the closing share price of the Series D preferred shares (EQCpD) at the end of the period. The market value of diluted common shares is the product of the number of diluted common shares outstanding at the end of the period and the closing share price of the common shares (EQC) at the end of the period.

Undepreciated Book Value

Undepreciated book value represents the carrying value of real estate properties after purchase price allocations, and impairment write-downs, if any.