Equity Commonwealth Reports Second Quarter 2024 Results
Equity Commonwealth (NYSE: EQC) reported financial results for Q2 2024. Net income attributable to common shareholders was $22.2 million, or $0.20 per diluted share, up from $13.8 million in Q2 2023. The increase was primarily due to decreased general and administrative expenses and higher interest income. Funds from Operations (FFO) were $26.4 million, or $0.24 per diluted share, compared to $18.3 million in Q2 2023. Normalized FFO was $26.1 million, or $0.24 per diluted share.
The company's cash and cash equivalents balance was $2.2 billion as of June 30, 2024. The same property portfolio, consisting of 4 properties totaling 1.5 million square feet, was 71.4% leased and had a 70.7% commenced occupancy rate. Same property NOI decreased 3.3% year-over-year, while same property cash NOI decreased 10.4%.
Equity Commonwealth (NYSE: EQC) ha riportato i risultati finanziari per il secondo trimestre del 2024. Il reddito netto attribuibile agli azionisti ordinari è stato di 22,2 milioni di dollari, ovvero 0,20 dollari per azione diluita, in aumento rispetto ai 13,8 milioni di dollari del secondo trimestre del 2023. L'aumento è stato principalmente dovuto a una riduzione delle spese generali e amministrative e a un incremento dei proventi da interessi. I fondi provenienti dalle operazioni (FFO) ammontano a 26,4 milioni di dollari, equivalenti a 0,24 dollari per azione diluita, rispetto ai 18,3 milioni di dollari nel secondo trimestre del 2023. Il FFO normalizzato è stato di 26,1 milioni di dollari, ossia 0,24 dollari per azione diluita.
Il saldo di cassa e equivalenti di cassa dell'azienda era di 2,2 miliardi di dollari al 30 giugno 2024. Il portafoglio immobiliare comparabile, composto da 4 proprietà per un totale di 1,5 milioni di piedi quadrati, era leasingato al 71,4% e aveva un tasso di occupazione avviata del 70,7%. Il NOI della stessa proprietà è diminuito del 3,3% rispetto all'anno precedente, mentre il cash NOI della stessa proprietà è calato del 10,4%.
Equity Commonwealth (NYSE: EQC) reportó los resultados financieros del segundo trimestre de 2024. El ingreso neto atribuible a los accionistas comunes fue de 22,2 millones de dólares, o 0,20 dólares por acción diluida, un aumento con respecto a 13,8 millones de dólares en el segundo trimestre de 2023. El incremento se debió principalmente a la disminución de los gastos generales y administrativos y a un aumento en los ingresos por intereses. Los fondos de operaciones (FFO) fueron de 26,4 millones de dólares, o 0,24 dólares por acción diluida, en comparación con 18,3 millones de dólares en el segundo trimestre de 2023. El FFO normalizado fue de 26,1 millones de dólares, o 0,24 dólares por acción diluida.
El saldo de efectivo y equivalentes de efectivo de la compañía era de 2,2 mil millones de dólares a 30 de junio de 2024. El mismo portafolio de propiedades, que consta de 4 propiedades que suman 1,5 millones de pies cuadrados, estaba arrendado al 71,4% y tenía una tasa de ocupación comenzada del 70,7%. El NOI de la misma propiedad disminuyó un 3,3% interanual, mientras que el cash NOI de la misma propiedad disminuyó un 10,4%.
Equity Commonwealth (NYSE: EQC)는 2024년 2분기 재무 결과를 발표했습니다. 순이익은 보통주 주주에게 2,220만 달러, 즉 희석 주당 0.20 달러로, 이는 2023년 2분기의 1,380만 달러에서 증가한 수치입니다. 이 증가는 주로 일반 관리비용 감소와 이자 소득 증가 때문입니다. 운영에서 발생한 자금(FFO)는 2,640만 달러로, 희석 주당 0.24 달러에 해당하며, 2023년 2분기의 1,830만 달러와 비교됩니다. 정상화된 FFO는 2,610만 달러로, 희석 주당 0.24 달러입니다.
회사의 현금 및 현금성 자산 잔액은 2024년 6월 30일 기준으로 22억 달러였습니다. 동일한 자산 포트폴리오는 총 150만 평방 피트의 4개 자산으로 구성되어 있으며, 71.4%가 임대되었고 70.7%의 입주율을 기록했습니다. 같은 자산의 NOI는 전년 대비 3.3% 감소했으며, 같은 자산의 현금 NOI는 10.4% 감소했습니다.
Equity Commonwealth (NYSE: EQC) a publié les résultats financiers pour le deuxième trimestre 2024. Le revenu net attribuable aux actionnaires ordinaires était de 22,2 millions de dollars, soit 0,20 dollar par action diluée, en hausse par rapport à 13,8 millions de dollars au deuxième trimestre 2023. Cette augmentation est principalement due à la réduction des frais généraux et administratifs ainsi qu'à des revenus d'intérêts plus élevés. Les fonds provenant des opérations (FFO) s'élevaient à 26,4 millions de dollars, ou 0,24 dollar par action diluée, comparé à 18,3 millions de dollars au deuxième trimestre 2023. Le FFO normalisé était de 26,1 millions de dollars, soit 0,24 dollar par action diluée.
Le solde de la trésorerie et des équivalents de trésorerie de l'entreprise était de 2,2 milliards de dollars au 30 juin 2024. Le même portefeuille immobilier, composé de 4 propriétés totalisant 1,5 million de pieds carrés, était loué à 71,4% et avait un taux d'occupation commencée de 70,7%. Le NOI de la même propriété a diminué de 3,3% d'une année sur l'autre, tandis que le cash NOI de la même propriété a diminué de 10,4%.
Equity Commonwealth (NYSE: EQC) hat die finanziellen Ergebnisse für das zweite Quartal 2024 bekannt gegeben. Der Nettoertrag, der den Stammaktionären zuzurechnen ist, betrug 22,2 Millionen USD, oder 0,20 USD pro verwässerter Aktie, eine Steigerung gegenüber 13,8 Millionen USD im zweiten Quartal 2023. Der Anstieg war hauptsächlich auf gesunkene allgemeine und Verwaltungskosten sowie höhere Zinserträge zurückzuführen. Die Fonds aus Betriebstätigkeit (FFO) beliefen sich auf 26,4 Millionen USD, oder 0,24 USD pro verwässerter Aktie, verglichen mit 18,3 Millionen USD im zweiten Quartal 2023. Normalisierte FFO betrugen 26,1 Millionen USD, das sind 0,24 USD pro verwässerter Aktie.
Der Kassenbestand und die Zahlungsmitteläquivalente des Unternehmens betrugen zum 30. Juni 2024 2,2 Milliarden USD. Das gleiche Immobilienportfolio, das aus 4 Immobilien mit insgesamt 1,5 Millionen Quadratfuß besteht, war zu 71,4% vermietet und hatte eine 70,7% Belegungsquote. Der NOI der gleichen Immobilie sank um 3,3% im Jahresvergleich, während der Cash NOI der gleichen Immobilie um 10,4% zurückging.
- Net income increased to $22.2 million from $13.8 million in Q2 2023
- FFO improved to $26.4 million from $18.3 million in Q2 2023
- Normalized FFO increased to $26.1 million from $24.6 million in Q2 2023
- Strong cash position with $2.2 billion in cash and cash equivalents
- GAAP rental rate on new and renewal leases was 6.8% higher compared to prior rates
- Same property NOI decreased 3.3% year-over-year
- Same property cash NOI decreased 10.4% year-over-year
- Same property portfolio leased percentage decreased to 71.4% from 82.0% in Q2 2023
- Commenced occupancy rate declined to 70.7% from 78.2% in Q2 2023
Equity Commonwealth's Q2 2024 results show a mixed performance with some positive trends and areas of concern. Net income attributable to common shareholders increased to
The company's FFO saw a significant improvement, rising to
However, there are concerning trends in the company's property portfolio:
- Same property portfolio leased percentage decreased to
71.4% from82.0% year-over-year - Same property NOI decreased by
3.3% - Same property cash NOI decreased by
10.4%
On a positive note, the company maintains a strong liquidity position with
The leasing activity shows some promise, with a
Overall, while Equity Commonwealth's financial performance has improved, the declining occupancy and NOI in its property portfolio warrant close attention from investors.
Equity Commonwealth's Q2 2024 results reflect broader trends in the commercial real estate market, particularly in the office sector. The company's portfolio performance raises some red flags that investors should carefully consider.
The decline in same property portfolio leased percentage from
The
On a more positive note, the company's leasing activity shows some resilience. The
The company's substantial cash reserves of
Investors should closely monitor Equity Commonwealth's ability to reverse the occupancy decline and improve its NOI in the coming quarters. The company's strategy for deploying its cash reserves will also be important in determining its future performance in a challenging commercial real estate market.
Financial results for the quarter ended June 30, 2024
Net income attributable to common shareholders was
Funds from Operations, or FFO, as defined by the National Association of Real Estate Investment Trusts, for the quarter ended June 30, 2024, were
-
$0.05 -
$0.02
Normalized FFO was
-
$0.02 -
$(0.01)
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 obscure the company’s operating performance. Definitions of FFO, Normalized FFO and reconciliations to net income, determined in accordance with
As of June 30, 2024, the company’s cash and cash equivalents balance was
Same property results for the quarter ended June 30, 2024
The company’s same property portfolio at the end of the quarter consisted of 4 properties totaling 1.5 million square feet. Operating results were as follows:
-
The same property portfolio was
71.4% leased as of June 30, 2024, compared to75.4% as of March 31, 2024, and82.0% as of June 30, 2023. -
The same property portfolio commenced occupancy was
70.7% as of June 30, 2024, compared to74.6% as of March 31, 2024, and78.2% as of June 30, 2023. -
Same property NOI decreased
3.3% when compared to the same period in 2023, primarily due to a decrease in average commenced occupancy, partially offset by a decrease in pre-leasing demolition costs. -
Same property cash NOI decreased
10.4% when compared to the same period in 2023, primarily due to a decrease in average commenced occupancy, partially offset by a decrease in pre-leasing demolition costs. - The company entered into leases for approximately 24,000 square feet, including renewal leases for approximately 20,000 square feet and new leases for approximately 4,000 square feet.
-
The GAAP rental rate on new and renewal leases was
6.8% higher compared to the prior GAAP rental rate for the same space. -
The cash rental rate on new and renewal leases was
0.7% higher compared to the prior cash rental rate for the same space.
The definitions and reconciliations of same property NOI and same property cash NOI to net income, determined in accordance with GAAP, are included at the end of this press release. The same property portfolio at the end of the quarter included properties continuously owned from April 1, 2023 through June 30, 2024.
Earnings conference call & supplemental operating and financial information
Equity Commonwealth will host a conference call to discuss second quarter results on Wednesday, July 31, 2024, at 9:00 A.M. CT. 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 Second Quarter 2024 Supplemental Operating and Financial Information is available in the Investor Relations section of EQC’s website at www.eqcre.com.
About Equity Commonwealth
Equity Commonwealth (NYSE: EQC) is a
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.
Forward-Looking Statements
Some of the statements contained in this press release constitute forward-looking statements within the meaning of the federal securities laws. 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, 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,” “will,” “should,” “could,” “would,” “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). 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.
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(Unaudited, amounts in thousands, except share data) |
|||||||
|
June 30,
|
|
December 31,
|
||||
ASSETS |
|
|
|
||||
Real estate properties: |
|
|
|
||||
Land |
$ |
44,060 |
|
|
$ |
44,060 |
|
Buildings and improvements |
|
374,095 |
|
|
|
367,827 |
|
|
|
418,155 |
|
|
|
411,887 |
|
Accumulated depreciation |
|
(183,867 |
) |
|
|
(180,535 |
) |
|
|
234,288 |
|
|
|
231,352 |
|
Cash and cash equivalents |
|
2,195,823 |
|
|
|
2,160,535 |
|
Rents receivable |
|
17,257 |
|
|
|
15,737 |
|
Other assets, net |
|
16,373 |
|
|
|
17,417 |
|
Total assets |
$ |
2,463,741 |
|
|
$ |
2,425,041 |
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
||||
Accounts payable, accrued expenses and other |
$ |
19,585 |
|
|
$ |
27,298 |
|
Rent collected in advance |
|
2,706 |
|
|
|
1,990 |
|
Distributions payable |
|
3,663 |
|
|
|
5,640 |
|
Total liabilities |
$ |
25,954 |
|
|
$ |
34,928 |
|
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
||||
Preferred shares of beneficial interest, |
|
|
|
||||
Series D preferred shares; |
$ |
119,263 |
|
|
$ |
119,263 |
|
Common shares of beneficial interest, |
|
1,073 |
|
|
|
1,068 |
|
Additional paid in capital |
|
3,939,583 |
|
|
|
3,935,873 |
|
Cumulative net income |
|
3,976,534 |
|
|
|
3,926,979 |
|
Cumulative common distributions |
|
(4,864,499 |
) |
|
|
(4,864,440 |
) |
Cumulative preferred distributions |
|
(737,670 |
) |
|
|
(733,676 |
) |
Total shareholders’ equity |
|
2,434,284 |
|
|
|
2,385,067 |
|
Noncontrolling interest |
|
3,503 |
|
|
|
5,046 |
|
Total equity |
$ |
2,437,787 |
|
|
$ |
2,390,113 |
|
Total liabilities and equity |
$ |
2,463,741 |
|
|
$ |
2,425,041 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(Unaudited, amounts in thousands, except per share data) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Rental revenue |
$ |
12,816 |
|
|
$ |
13,358 |
|
|
$ |
26,709 |
|
|
$ |
27,584 |
|
Other revenue (1) |
|
1,293 |
|
|
|
1,232 |
|
|
|
2,590 |
|
|
|
2,582 |
|
Total revenues |
$ |
14,109 |
|
|
$ |
14,590 |
|
|
$ |
29,299 |
|
|
$ |
30,166 |
|
|
|
|
|
|
|
|
|
||||||||
Expenses: |
|
|
|
|
|
|
|
||||||||
Operating expenses |
$ |
6,721 |
|
|
$ |
6,942 |
|
|
$ |
13,255 |
|
|
$ |
14,198 |
|
Depreciation and amortization |
|
4,182 |
|
|
|
4,514 |
|
|
|
8,539 |
|
|
|
8,824 |
|
General and administrative |
|
8,356 |
|
|
|
13,854 |
|
|
|
16,679 |
|
|
|
22,409 |
|
Total expenses |
$ |
19,259 |
|
|
$ |
25,310 |
|
|
$ |
38,473 |
|
|
$ |
45,431 |
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income, net |
|
29,770 |
|
|
|
27,352 |
|
|
|
59,282 |
|
|
|
55,728 |
|
Income before income taxes |
|
24,620 |
|
|
|
16,632 |
|
|
|
50,108 |
|
|
|
40,463 |
|
Income tax expense |
|
(434 |
) |
|
|
(796 |
) |
|
|
(464 |
) |
|
|
(1,876 |
) |
Net income |
$ |
24,186 |
|
|
$ |
15,836 |
|
|
$ |
49,644 |
|
|
$ |
38,587 |
|
Net income attributable to noncontrolling interest |
|
(36 |
) |
|
|
(52 |
) |
|
|
(89 |
) |
|
|
(118 |
) |
Net income attributable to Equity Commonwealth |
$ |
24,150 |
|
|
$ |
15,784 |
|
|
$ |
49,555 |
|
|
$ |
38,469 |
|
Preferred distributions |
|
(1,997 |
) |
|
|
(1,997 |
) |
|
|
(3,994 |
) |
|
|
(3,994 |
) |
Net income attributable to Equity Commonwealth common shareholders |
$ |
22,153 |
|
|
$ |
13,787 |
|
|
$ |
45,561 |
|
|
$ |
34,475 |
|
Weighted average common shares outstanding — basic (2) |
|
107,416 |
|
|
109,839 |
|
|
107,316 |
|
|
109,779 |
Weighted average common shares outstanding — diluted (2)(3) |
|
108,751 |
|
|
111,237 |
|
|
108,487 |
|
|
111,269 |
|
|
|
|
|
|
|
|
||||
Earnings per common share attributable to Equity Commonwealth common shareholders: |
|
|
|
|
|
|
|
||||
Basic |
$ |
0.21 |
|
$ |
0.13 |
|
$ |
0.42 |
|
$ |
0.31 |
Diluted |
$ |
0.20 |
|
$ |
0.12 |
|
$ |
0.42 |
|
$ |
0.31 |
(1) |
Other revenue is primarily comprised of parking revenue that does not represent a component of a lease. |
(2) |
Weighted average common shares outstanding for the three months ended June 30, 2024 and 2023 includes 128 and 131 unvested, earned RSUs, respectively. Weighted average common shares outstanding for the six months ended June 30, 2024 and 2023 includes 129 and 122 unvested, earned RSUs, respectively. |
(3) |
As of June 30, 2024, we had 4,915 series D preferred shares outstanding. The series D preferred shares were convertible into 4,032 common shares as of June 30, 2024 and 2023. The series D preferred shares are anti-dilutive for GAAP EPS for all periods presented. |
CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO |
|||||||||||||||
(Unaudited, amounts in thousands, except per share data) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Calculation of FFO |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
24,186 |
|
|
$ |
15,836 |
|
|
$ |
49,644 |
|
|
$ |
38,587 |
|
Real estate depreciation and amortization |
|
4,169 |
|
|
|
4,503 |
|
|
|
8,515 |
|
|
|
8,802 |
|
FFO attributable to Equity Commonwealth |
|
28,355 |
|
|
|
20,339 |
|
|
|
58,159 |
|
|
|
47,389 |
|
Preferred distributions |
|
(1,997 |
) |
|
|
(1,997 |
) |
|
|
(3,994 |
) |
|
|
(3,994 |
) |
FFO attributable to EQC common shareholders and unitholders |
$ |
26,358 |
|
|
$ |
18,342 |
|
|
$ |
54,165 |
|
|
$ |
43,395 |
|
|
|
|
|
|
|
|
|
||||||||
Calculation of Normalized FFO |
|
|
|
|
|
|
|
||||||||
FFO attributable to EQC common shareholders and unitholders |
$ |
26,358 |
|
|
$ |
18,342 |
|
|
$ |
54,165 |
|
|
$ |
43,395 |
|
Straight-line rent adjustments |
|
(259 |
) |
|
|
273 |
|
|
|
(482 |
) |
|
|
552 |
|
Former chairman accelerated compensation expense |
|
— |
|
|
|
5,957 |
|
|
|
— |
|
|
|
5,957 |
|
Normalized FFO attributable to EQC common shareholders and unitholders |
$ |
26,099 |
|
|
$ |
24,572 |
|
|
$ |
53,683 |
|
|
$ |
49,904 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares and units outstanding — basic (1) |
|
107,578 |
|
|
|
110,196 |
|
|
|
107,509 |
|
|
|
110,120 |
|
Weighted average common shares and units outstanding — diluted (1) |
|
108,913 |
|
|
|
111,594 |
|
|
|
108,680 |
|
|
|
111,610 |
|
|
|
|
|
|
|
|
|
||||||||
FFO attributable to EQC common shareholders and unitholders per share and unit — basic |
$ |
0.25 |
|
|
$ |
0.17 |
|
|
$ |
0.50 |
|
|
$ |
0.39 |
|
FFO attributable to EQC common shareholders and unitholders per share and unit — diluted |
$ |
0.24 |
|
|
$ |
0.16 |
|
|
$ |
0.50 |
|
|
$ |
0.39 |
|
Normalized FFO attributable to EQC common shareholders and unitholders per share and unit — basic |
$ |
0.24 |
|
|
$ |
0.22 |
|
|
$ |
0.50 |
|
|
$ |
0.45 |
|
Normalized FFO attributable to EQC common shareholders and unitholders per share and unit — diluted |
$ |
0.24 |
|
|
$ |
0.22 |
|
|
$ |
0.49 |
|
|
$ |
0.45 |
|
(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 June 30, 2024 and 2023 include 162 and 357 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 six months ended June 30, 2024 and 2023 include 193 and 341 LTIP/Operating Partnership Units, respectively, that are excluded from the calculation of basic earnings per common share attributable to EQC common shareholders (only). |
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 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 |
|||||||||||||||||||
(Unaudited, amounts in thousands) |
|||||||||||||||||||
|
For the Three Months Ended |
||||||||||||||||||
|
6/30/2024 |
|
3/31/2024 |
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
||||||||||
Calculation of Same Property NOI and Same Property Cash Basis NOI: |
|
|
|
|
|
|
|
|
|
||||||||||
Rental revenue |
$ |
12,816 |
|
|
$ |
13,893 |
|
|
$ |
13,824 |
|
|
$ |
13,928 |
|
|
$ |
13,358 |
|
Other revenue (1) |
|
1,293 |
|
|
|
1,297 |
|
|
|
1,322 |
|
|
|
1,284 |
|
|
|
1,232 |
|
Operating expenses |
|
(6,721 |
) |
|
|
(6,534 |
) |
|
|
(6,542 |
) |
|
|
(6,722 |
) |
|
|
(6,942 |
) |
NOI |
$ |
7,388 |
|
|
$ |
8,656 |
|
|
$ |
8,604 |
|
|
$ |
8,490 |
|
|
$ |
7,648 |
|
Straight-line rent adjustments |
|
(259 |
) |
|
|
(223 |
) |
|
|
(538 |
) |
|
|
(107 |
) |
|
|
273 |
|
Lease termination fees |
|
(69 |
) |
|
|
(616 |
) |
|
|
(630 |
) |
|
|
(173 |
) |
|
|
(33 |
) |
Cash Basis NOI |
$ |
7,060 |
|
|
$ |
7,817 |
|
|
$ |
7,436 |
|
|
$ |
8,210 |
|
|
$ |
7,888 |
|
Cash Basis NOI from non-same properties (2) |
|
3 |
|
|
|
16 |
|
|
|
7 |
|
|
|
(5 |
) |
|
|
(4 |
) |
Same Property Cash Basis NOI |
$ |
7,063 |
|
|
$ |
7,833 |
|
|
$ |
7,443 |
|
|
$ |
8,205 |
|
|
$ |
7,884 |
|
Non-cash rental income and lease termination fees from same properties |
|
328 |
|
|
|
839 |
|
|
|
1,168 |
|
|
|
280 |
|
|
|
(240 |
) |
Same Property NOI |
$ |
7,391 |
|
|
$ |
8,672 |
|
|
$ |
8,611 |
|
|
$ |
8,485 |
|
|
$ |
7,644 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of Same Property NOI to GAAP Net Income: |
|
|
|
|
|
|
|
|
|
||||||||||
Same Property NOI |
$ |
7,391 |
|
|
$ |
8,672 |
|
|
$ |
8,611 |
|
|
$ |
8,485 |
|
|
$ |
7,644 |
|
Non-cash rental income and lease termination fees from same properties |
|
(328 |
) |
|
|
(839 |
) |
|
|
(1,168 |
) |
|
|
(280 |
) |
|
|
240 |
|
Same Property Cash Basis NOI |
$ |
7,063 |
|
|
$ |
7,833 |
|
|
$ |
7,443 |
|
|
$ |
8,205 |
|
|
$ |
7,884 |
|
Cash Basis NOI from non-same properties (2) |
|
(3 |
) |
|
|
(16 |
) |
|
|
(7 |
) |
|
|
5 |
|
|
|
4 |
|
Cash Basis NOI |
$ |
7,060 |
|
|
$ |
7,817 |
|
|
$ |
7,436 |
|
|
$ |
8,210 |
|
|
$ |
7,888 |
|
Straight-line rent adjustments |
|
259 |
|
|
|
223 |
|
|
|
538 |
|
|
|
107 |
|
|
|
(273 |
) |
Lease termination fees |
|
69 |
|
|
|
616 |
|
|
|
630 |
|
|
|
173 |
|
|
|
33 |
|
NOI |
$ |
7,388 |
|
|
$ |
8,656 |
|
|
$ |
8,604 |
|
|
$ |
8,490 |
|
|
$ |
7,648 |
|
Depreciation and amortization |
|
(4,182 |
) |
|
|
(4,357 |
) |
|
|
(4,184 |
) |
|
|
(4,436 |
) |
|
|
(4,514 |
) |
General and administrative |
|
(8,356 |
) |
|
|
(8,323 |
) |
|
|
(7,504 |
) |
|
|
(7,061 |
) |
|
|
(13,854 |
) |
Interest and other income, net |
|
29,770 |
|
|
|
29,512 |
|
|
|
29,670 |
|
|
|
29,269 |
|
|
|
27,352 |
|
Income before income taxes |
$ |
24,620 |
|
|
$ |
25,488 |
|
|
$ |
26,586 |
|
|
$ |
26,262 |
|
|
$ |
16,632 |
|
Income tax (expense) benefit |
|
(434 |
) |
|
|
(30 |
) |
|
|
40 |
|
|
|
(30 |
) |
|
|
(796 |
) |
Net income |
$ |
24,186 |
|
|
$ |
25,458 |
|
|
$ |
26,626 |
|
|
$ |
26,232 |
|
|
$ |
15,836 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(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 Six Months Ended June 30, |
||||||
|
2024 |
|
2023 |
||||
Calculation of Same Property NOI and Same Property Cash Basis NOI: |
|
|
|
||||
Rental revenue |
$ |
26,709 |
|
|
$ |
27,584 |
|
Other revenue (1) |
|
2,590 |
|
|
|
2,582 |
|
Operating expenses |
|
(13,255 |
) |
|
|
(14,198 |
) |
NOI |
$ |
16,044 |
|
|
$ |
15,968 |
|
Straight-line rent adjustments |
|
(482 |
) |
|
|
552 |
|
Lease termination fees |
|
(685 |
) |
|
|
(210 |
) |
Cash Basis NOI |
$ |
14,877 |
|
|
$ |
16,310 |
|
Cash Basis NOI from non-same properties (2) |
|
19 |
|
|
|
(8 |
) |
Same Property Cash Basis NOI |
$ |
14,896 |
|
|
$ |
16,302 |
|
Non-cash rental income and lease termination fees from same properties |
|
1,167 |
|
|
|
(342 |
) |
Same Property NOI |
$ |
16,063 |
|
|
$ |
15,960 |
|
|
|
|
|
||||
Reconciliation of Same Property NOI to GAAP Net Income: |
|
|
|
||||
Same Property NOI |
$ |
16,063 |
|
|
$ |
15,960 |
|
Non-cash rental income and lease termination fees from same properties |
|
(1,167 |
) |
|
|
342 |
|
Same Property Cash Basis NOI |
$ |
14,896 |
|
|
$ |
16,302 |
|
Cash Basis NOI from non-same properties (2) |
|
(19 |
) |
|
|
8 |
|
Cash Basis NOI |
$ |
14,877 |
|
|
$ |
16,310 |
|
Straight-line rent adjustments |
|
482 |
|
|
|
(552 |
) |
Lease termination fees |
|
685 |
|
|
|
210 |
|
NOI |
$ |
16,044 |
|
|
$ |
15,968 |
|
Depreciation and amortization |
|
(8,539 |
) |
|
|
(8,824 |
) |
General and administrative |
|
(16,679 |
) |
|
|
(22,409 |
) |
Interest and other income, net |
|
59,282 |
|
|
|
55,728 |
|
Income before income taxes |
$ |
50,108 |
|
|
$ |
40,463 |
|
Income tax expense |
|
(464 |
) |
|
|
(1,876 |
) |
Net income |
$ |
49,644 |
|
|
$ |
38,587 |
|
(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. |
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 April 1, 2023 through June 30, 2024. The year-to-date same property versions of these measures include the results of properties continuously owned from January 1, 2023 through June 30, 2024. 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 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: https://www.businesswire.com/news/home/20240730835995/en/
Bill Griffiths
(312) 646-2801
ir@eqcre.com
Source: Equity Commonwealth
FAQ
What was Equity Commonwealth's (EQC) net income for Q2 2024?
How did EQC's Funds from Operations (FFO) perform in Q2 2024?
What was Equity Commonwealth's cash position as of June 30, 2024?
How did EQC's same property NOI change in Q2 2024 compared to Q2 2023?
What was the leased percentage of EQC's same property portfolio as of June 30, 2024?
