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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): June 20, 2018
 
EQUITY COMMONWEALTH
(Exact Name of Registrant as Specified in Its Charter)
 
Maryland
(State or Other Jurisdiction of Incorporation)
 
1-9317
 
04-6558834
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
Two North Riverside Plaza,
Suite 2100, Chicago, IL
 
60606
(Address of Principal Executive Offices)
 
(Zip Code)
 
(312) 646-2800
(Registrant’s Telephone Number, Including Area Code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
 
 
 

 


 
Item 5.07. Submission of Matters to a Vote of Security Holders.
 
On June 20, 2018, Equity Commonwealth (the “Company”) held its 2018 annual meeting of shareholders (the “Annual Meeting”). At the Annual Meeting, the Company’s shareholders (i) elected 11 trustees to the Board of Trustees of the Company (the “Board”) to serve until the Company’s 2019 annual meeting of shareholders, (ii) approved, on a non-binding advisory basis, the compensation of the named executive officers and (iii) ratified the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. The proposals are described in the Company’s Proxy Statement. The final voting results for each proposal are set forth below.
 
Proposal 1: Election of Trustees
 
At the Annual Meeting, shareholders elected 11 trustees to the Board to serve until the 2019 annual meeting of shareholders and until their respective successors have been duly elected and qualified. The table below sets forth the voting results for each trustee nominee:
 
Nominee
 
Votes For
 
Votes Withheld
 
Broker Non-Votes
Sam Zell
 
104,250,079
 
3,252,990
 
6,681,680
James S. Corl
 
106,695,607
 
807,462
 
6,681,680
Martin L. Edelman
 
106,683,495
 
819,574
 
6,681,680
Edward A. Glickman
 
107,085,171
 
417,898
 
6,681,680
David Helfand
 
107,221,877
 
281,192
 
6,681,680
Peter Linneman
 
106,270,377
 
1,232,692
 
6,681,680
James L. Lozier, Jr.
 
106,599,432
 
903,637
 
6,681,680
Mary Jane Robertson
 
107,106,540
 
396,529
 
6,681,680
Kenneth Shea
 
106,555,872
 
947,197
 
6,681,680
Gerald A. Spector
 
106,597,142
 
905,927
 
6,681,680
James A. Star
 
105,498,512
 
2,004,557
 
6,681,680
 
Proposal 2: Advisory Vote on Executive Compensation
 
At the Annual Meeting, the Company’s shareholders voted affirmatively on a non-binding resolution to approve the compensation of the Company’s named executive officers. The table below sets forth the voting results for this proposal:
 
Votes For
 
Votes Against
 
Abstentions
 
Broker Non-Votes
104,692,673
 
2,733,059
 
77,337
 
6,681,680
 
Proposal 3: Ratification of the Appointment of Independent Registered Public Accounting Firm
 
At the Annual Meeting, the Company’s shareholders ratified the appointment of Ernst & Young LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. The table below sets forth the voting results for this proposal:
 
Votes For
 
Votes Against
 
Abstentions
113,202,882
 
924,990
 
56,877
 
 
 Item 8.01. Other Events

In connection with filing a registration statement on Form S-3, the Company is disclosing certain pro forma financial information for the three months ended March 31, 2018, adjusted for the effects of the sale on February 21, 2018 of the

2
 


buildings and land known as 600 West Chicago Avenue (“600 West Chicago Avenue”) as if 600 West Chicago Avenue had been disposed of on January 1, 2018.

As previously announced, on February 21, 2018, EQC Operating Trust (the “Operating Trust”), a Maryland real estate investment trust through which the Company conducts its business, and a wholly-owned subsidiary of the Operating Trust, closed on the sale of 600 West Chicago Avenue to Chicago Kingsbury, LLC for an aggregate gross sales price of $510 million. 

The Unaudited Pro Forma Condensed Consolidated Statement of Operations and notes thereto are filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
  

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.


Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibit
 
Exhibit Number
 
Description
99.1
 

 


3
 



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
EQUITY COMMONWEALTH
 
By:
/s/ Orrin S. Shifrin
 
Name:
Orrin S. Shifrin
 
Title:
Executive Vice President, General Counsel and Secretary
 
 
Date: June 20, 2018
 
 
 


 
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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1

Unaudited Pro Forma Condensed Consolidated Statement of Operations

On January 22, 2018, EQC Operating Trust (the "Operating Trust"), a Maryland real estate investment trust through which Equity Commonwealth (the "Company") conducts its business, and a wholly-owned subsidiary of the Operating Trust, entered into a real estate sale agreement with Chicago Kingsbury, LLC (the "Purchaser") to sell to the Purchaser the buildings and land known as 600 West Chicago Avenue ("600 West Chicago Avenue") for a gross sales price of $510 million (the "Transaction"). The Transaction closed on February 21, 2018. Proceeds after credits for capital, contractual lease costs, and rent abatement were approximately $488 million.

The accompanying Pro Forma Condensed Consolidated Statement of Operations and notes thereto for the three months ended March 31, 2018 presents the Company's historical amounts, adjusted for the effects of the Transaction, as if 600 West Chicago Avenue had been disposed of on January 1, 2018. The accompanying Pro Forma Condensed Consolidated Statement of Operations is unaudited and is not necessarily indicative of what the Company's actual results of operations would have been had the Transaction actually occurred on January 1, 2018, nor does it purport to represent the Company's future results of operations.

The Pro Forma Condensed Consolidated Statement of Operations and notes thereto should be read in conjunction with the Company's historical condensed consolidated financial statements and notes thereto as of and for the three months ended March 31, 2018, included in the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission ("SEC") on May 8, 2018.





Equity Commonwealth
Pro Forma Condensed Consolidated Statement of Operations
Three Months Ended March 31, 2018
(Unaudited and in thousands, except per share amounts)
 
Historical (1)
 
Transaction (2)
 
Pro Forma
Revenues:
 
 
 
 
 
Rental income
$
43,549

 
$
(5,807
)
 
$
37,742

Tenant reimbursements and other income
15,039

 
(2,133
)
 
12,906

Total revenues
58,588

 
(7,940
)
 
50,648

Expenses:
 
 
 
 
 
Operating expenses
24,599

 
(4,662
)
 
19,937

Depreciation and amortization
13,903

 
(1,071
)
 
12,832

General and administrative
13,339

 

 
13,339

Loss on asset impairment
12,087

 

 
12,087

Total expenses
63,928

 
(5,733
)
 
58,195

Operating income (loss) income
(5,340
)
 
(2,207
)
 
(7,547
)
Interest and other income, net
5,780

 

 
5,780

Interest expense
(10,115
)
 

 
(10,115
)
Loss on early extinguishment of debt
(4,867
)
 

 
(4,867
)
Gain on sale of properties, net
205,211

 
(107,830
)
 
97,381

Income before income taxes
190,669

 
(110,037
)
 
80,632

Income tax expense
(3,007
)
 

 
(3,007
)
Net income
187,662

 
(110,037
)
 
77,625

Net income attributable to noncontrolling interest
(63
)
 
38

(2a)
(25
)
Net income attributable to Equity Commonwealth
187,599

 
(109,999
)
 
77,600

Preferred distributions
(1,997
)
 

 
(1,997
)
Net income attributable to Equity Commonwealth common shareholders
$
185,602

 
$
(109,999
)
 
$
75,603

 
 
 
 
 
 
Weighted average common shares outstanding — basic
123,867

 
 
 
123,867

Weighted average common shares outstanding — diluted
127,097

 
 
 
124,734

Earnings per common share attributable to Equity Commonwealth common shareholders:
 
 
 
 
 
Basic
$
1.50

 
 
 
$
0.61

Diluted
$
1.48

 
 
 
$
0.61

See accompanying notes.







Equity Commonwealth
Notes to Pro Forma Condensed Consolidated Statement of Operations
Three Months Ended March 31, 2018
(Unaudited)

(1) Historical Balances - Reflects the condensed consolidated statement of operations of the Company as contained in its historical condensed consolidated financial statements included in its Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2018 previously filed with the SEC on May 8, 2018.

(2) Transaction - Represents the historical combined revenues and expenses of 600 West Chicago Avenue for the period from January 1, 2018 through February 21, 2018 (the date of the sale), as if the disposition had occurred on January 1, 2018.

a.
Reflects the allocation of results between the controlling interests and the noncontrolling interests based on the noncontrolling interests weighted average ownership of 0.03% of the Operating Trust for the period ended February 21, 2018 (the date of the sale).



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