Equity commonwealth reports first quarter 2018 results
Chicago--(business wire)--equity commonwealth (nyse: eqc) today reported financial results for the quarter ended march 31, 2018. all per share results are reported on a diluted basis. financial results for the quarter ended march 31, 2018 net income attributable to common shareholders was $185.6 million, or $1.48 per share, for the quarter ended march 31, 2018. this compares to net income attributable to common shareholders of $21.8 million, or $0.17 per share, for the quarter ended march 31, 2017. the increase in net income was primarily due to gains from property sales. funds from operations (ffo), as defined by the national association of real estate investment trusts, for the quarter ended march 31, 2018, were $6.1 million, or $0.05 per share. this compares to ffo for the quarter ended march 31, 2017 of $33.3 million, or $0.27 per share. the following items impacted ffo for the quarter ended march 31, 2018, compared to the corresponding 2017 period: ($0.19) per share of income from properties sold; ($0.04) per share of loss on debt extinguishment; ($0.02) per share of increase in income tax expense; $0.04 per share of interest expense savings; and $0.01 per of share of increase in interest and other income (net of a $0.04 per share loss on the sale of securities). normalized ffo was $17.5 million, or $0.14 per share. this compares to normalized ffo for the quarter ended march 31, 2017 of $29.5 million, or $0.24 per share. the following items impacted normalized ffo for the quarter ended march 31, 2018, compared to the corresponding 2017 period: ($0.19) per share of income from properties sold; $0.05 per share of increase in interest income; and $0.04 per share of interest expense savings. normalized ffo begins with ffo and eliminates certain items that, by their nature, are not comparable from period to period, non-cash items, and items that tend to obscure the company’s operating performance. definitions of ffo, normalized ffo and reconciliations to net income, determined in accordance with u.s. generally accepted accounting principles, or gaap, are included at the end of this press release. for the quarter ended march 31, 2018, the company’s balance of cash and marketable securities was $3.1 billion. total debt outstanding was $679 million and availability under the company’s revolving credit facility was $750 million. the weighted average number of diluted common shares outstanding when calculating net income per share for the quarter ended march 31, 2018 was 127,097,324 shares, compared to 125,150,337 for the quarter ended march 31, 2017. the weighted average number of diluted common shares outstanding when calculating ffo or normalized ffo per share for the quarter ended march 31, 2018 was 124,734,221 shares, compared to 125,150,337 for the quarter ended march 31, 2017. same property results for the quarter ended march 31, 2018 the company’s same property portfolio at the end of the quarter consisted of 13 properties totaling 6.3 million square feet, which excludes one held for sale property. operating results were as follows: the same property portfolio was 88.6% leased as of march 31, 2018, compared to 89.2% as of december 31, 2017, and 87.2% as of march 31, 2017. the same property portfolio commenced occupancy was 83.5% as of march 31, 2018, compared to 85.4% as of december 31, 2017, and 83.5% as of march 31, 2017. same property noi decreased 2.1% when compared to the same period in 2017. same property cash noi increased 4.3% when compared to the same period in 2017. the company entered into leases for approximately 117,000 square feet, including renewal leases for approximately 71,000 square feet and new leases for approximately 46,000 square feet. gaap rental rates on new and renewal leases were 10.8% higher compared to prior gaap rental rates for the same space. cash rental rates on new and renewal leases were 2.8% 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 january 1, 2017 through march 31, 2018 and excludes properties held for sale. significant events during the quarter ended march 31, 2018 the company redeemed at par, on march 7, 2018, all $175 million of its 5.75% senior unsecured notes due august 1, 2042. the company authorized the repurchase of $150 million of its outstanding common shares, replacing the expiring authorization. the company repurchased approximately 2.97 million of its common shares at an average price of $29.67 per share for a total investment of $88.1 million. the company has $130.9 million authorized for future share repurchases, under its new authorization. the company completed dispositions totaling $785.2 million. the assets sold during the quarter included: 600 west chicago, a 1,561,000 square foot, 99.2% leased, office building in chicago, il, for a gross sale price of $510 million. proceeds after credits for capital, contractual lease costs, and rent abatement were approximately $488 million. 1600 market street, a 826,000 square foot, 84.7% leased, office building in philadelphia, pennsylvania, for a gross sale price of $160 million. 5073, 5075, & 5085 s. syracuse, a 248,000 square foot, 100% leased, office property in denver, colorado, for a gross sale price of $115.2 million. 600 west chicago, a 1,561,000 square foot, 99.2% leased, office building in chicago, il, for a gross sale price of $510 million. proceeds after credits for capital, contractual lease costs, and rent abatement were approximately $488 million. 1600 market street, a 826,000 square foot, 84.7% leased, office building in philadelphia, pennsylvania, for a gross sale price of $160 million. 5073, 5075, & 5085 s. syracuse, a 248,000 square foot, 100% leased, office property in denver, colorado, for a gross sale price of $115.2 million. the company entered into a contract to sell its 100% leased, 553,000 square foot office property at 1601 dry creek in longmont, colorado. the property was held for sale as of march 31, 2018. subsequent events on may 4, 2018, the company repaid at par its $400 million unsecured floating rate term loans due in 2020 and 2022. the company currently has 3 properties totaling 1.5 million square feet in various stages of the sale process, including one property held for sale. earnings conference call & supplemental data equity commonwealth will host a conference call to discuss first quarter results on tuesday, may 8, 2018, 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 first quarter 2018 supplemental operating and financial data is available 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. as of march 31, 2018, eqc’s same property portfolio comprised 13 properties and 6.3 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 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. 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 share repurchases, marketing the company’s properties for sale and consummating asset sales. 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) 42,007 735,827 936,450 2,785,760 3,400,290 3,401,479 condensed consolidated statements of operations (amounts in thousands, except per share data) (3,007 187,662 187,599 185,602 1.50 1.48 calculation of funds from operations (ffo) and normalized ffo (amounts in thousands, except per share data) 187,662 8,141 6,144 6,144 33,273 2,969 0.05 our calculations of ffo and normalized ffo attributable to eqc common shareholders and unitholders per share and unit - basic for the three months ended march 31, 2018 include 43 and 29 ltip/operating partnership units, respectively, that are excluded from the calculation of basic earnings per common share attributable to eqc common shareholders (only). calculation of same property net operating income (noi) and same property cash basis noi (amounts in thousands)
