Equity Commonwealth (NYSE:EQC) Q4 2022 Earnings Conference Call February 9, 2023 10:00 AM ET

Company Participants

David Helfand - President, CEO & Trustee

David Weinberg - EVP & COO

Conference Call Participants

Craig Mailman - Citigroup

Operator

Good morning, and thanks for joining this call to discuss Equity Commonwealth's results for the fourth quarter and full year ending December 31, 2022, and an update on the company. [Operator Instructions].

Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of federal securities laws. Please refer to the section titled Forward-Looking Statements in the press release issued yesterday as well as the section titled Risk Factors in the company's annual report on Form 10-K and quarterly reports on Form 10-Q for subsequent quarters for a discussion of factors that could cause the company's actual results to materially differ from any forward-looking statement. The company assumes no obligation to update or supplement any forward-looking statements made today.

The company posts important information on its website at www.eqcre.com, including information that may be material. The portion of today's remarks on the company's quarterly and 2022 earnings also include certain non-GAAP financial measures. Please refer to yesterday's press release and supplemental containing the company's results for a reconciliation of these non-GAAP measures to the company's GAAP financial results.

On the call today are David Helfand, President and CEO; David Weinberg, COO; and Bill Griffiths, CFO. With that, I will turn the call over to David Helfand.

David Helfand

Thank you. Good morning, everyone. Thanks for joining us. I'll review the company's results for the quarter and the full year as well as provide an update on the capital markets and our investment activities.

For the quarter, funds from operations were $0.21 per share compared to $0.01 per share in the fourth quarter 2021. Normalized FFO was also $0.21 per share compared to less than $0.01 per share a year ago. Growth in FFO and normalized FFO was largely the result of a $0.20 per share increase in interest and other income as well as a $0.01 per share increase in same-property cash NOI. Same-property NOI was up 14.5%, and same-property cash NOI was 14.9% higher compared to the fourth quarter 2021.

For the full year 2022, funds from operations were $0.41 per share compared to a $0.06 per share loss for the full year 2021. Normalized FFO was $0.42 per share compared to $0.01 per share loss a year ago. The growth in FFO was largely the result of a $0.35 per share increase in interest and other income, a $0.06 per share decrease in G&A expense and a $0.05 per share increase in same-property NOI. The growth in normalized FFO was largely driven by a $0.36 per share increase in interest and other income and a $0.06 per share increase in same-property cash NOI. Same-property NOI was up 17%, and same-property cash NOI was 19.1% higher compared to the full year 2021.