Equity Commonwealth (EQC) 8-K Equity Commonwealth Reports Fourth Quarter and Full Year 2016 Results

Exhibit 99.2

Supplemental Operating and Financial Data

Fourth Quarter 2016

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
	Additional Income Statement Information	8
	Calculation of Same Property Net Operating Income (NOI) and Same Property Cash Basis NOI	9
	Same Property Results of Operations	10
	Calculation of EBITDA and Adjusted EBITDA	11
	Calculation of Funds from Operations (FFO) and Normalized FFO	12
	Debt Summary	13
	Debt Maturity Schedule	14
	Leverage Ratios, Coverage Ratios and Public Debt Covenants	15
	Acquisitions and Dispositions	16
Portfolio Information
	Top Properties by Annualized Rental Revenue	17
	Leasing Summary	18
	Same Property Leasing Summary	19
	Capital Summary - Expenditures & Leasing Commitments	20
	Tenants Representing 1.5% or More of Annualized Rental Revenue	21
	Same Property Lease Expiration Schedule	22
	Property Detail	23
	Disposed Property Detail	24
Additional Support
	Common & Potential Common Shares	25
	Definitions	26
Forward-Looking Statements
Some of the statements contained in this presentation constitute forward-looking statements within the meaning of the federal securities laws. 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, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. 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 particular, statements pertaining to our capital resources, portfolio performance and results of operations contain forward-looking statements. Likewise, all of our statements regarding anticipated growth in our funds from operations and anticipated market conditions are forward-looking statements. 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,” 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 sections entitled “Risk Factors” in our most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q.

2

COMPANY PROFILE AND INVESTOR INFORMATION

Equity Commonwealth (NYSE: EQC) is an internally managed and self-advised real estate investment trust (REIT) with commercial office properties throughout the United States.

Same Property Statistics
No. of		%
Properties	Sq. Feet	Leased
33	16,053	91.1%

Senior Unsecured Debt Ratings	NYSE Trading Symbols
Moody's: Baa3	Common Stock: EQC
Standard & Poor's: BBB-	Preferred Stock Series D: EQCPD
	5.75% Senior Notes due 2042: EQCO

Board of Trustees
Sam Zell (Chairman)	David A. Helfand	Kenneth Shea
James S. Corl	Peter Linneman	Gerald A. Spector
Martin L. Edelman	James L. Lozier, Jr.	James A. Star
Edward A. Glickman	Mary Jane Robertson
Senior Management
David A. Helfand	David S. Weinberg
President and Chief Executive Officer	Executive Vice President and
	Chief Operating Officer
Adam S. Markman	Orrin S. Shifrin
Executive 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	Jed Reagan	(949) 640-8780	jreagan@greenstreetadvisors.com
JMP Securities	Mitch Germain	(212) 906-3546	mgermain@jmpsecurities.com
Stifel Nicolaus	John Guinee	(443) 224-1307	jwguinee@stifel.com
Debt Research Coverage (1)
Credit Suisse	John Giordano	(212) 538-4935	john.giordano@credit-suisse.com
J.P.Morgan	Mark Streeter	(212) 834-5086	mark.streeter@jpmorgan.com
Wells Fargo Securities	Thierry Perrein	(704) 410-3262	thierry.perrein@wellsfargo.com
Rating Agencies (1)
Moody's Investors Service	Lori Marks	(212) 553-1098	lori.marks@moodys.com
Standard & Poor's	Anita Ogbara	(212) 438-5077	anita.ogbara@standardandpoors.com

Certain terms are defined in the definitions section of this document.
(1)	Any opinions, estimates or forecasts regarding EQC's performance made by these analysts or agencies do not represent opinions, forecasts or predictions of EQC or its management. EQC does not by its reference to the analysts and agencies above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts or agencies.

3

KEY FINANCIAL DATA

(amounts in thousands, except per share data)

		As of and for the Three Months Ended
		12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
OPERATING INFORMATION
	Ending property count (1)	33			37			45			60			65
	Ending square footage (1)(2)	16,053			16,710			20,675			23,037			23,952
	Percent leased (1)	91.1		%	91.2		%	90.3		%	91.4		%	91.4		%
	Total revenues	$	103,546		$	114,632		$	145,367		$	137,135		$	138,934
	Net income	12,260			86,388			87,844			46,402			43,145
	Net income attributable to EQC common shareholders	10,263			84,391			71,254			39,421			36,164
	NOI (3)	60,804			65,319			93,974			79,877			75,114
	Cash Basis NOI (3)	55,963			61,422			74,809			76,856			74,543
	Adjusted EBITDA (3)	52,461			54,917			84,036			69,634			64,755
	NOI margin	58.7		%	57.0		%	64.6		%	58.2		%	54.1		%
	Cash Basis NOI margin	56.7		%	55.5		%	59.3		%	57.3		%	53.9		%
	FFO attributable to EQC common shareholders (3)	28,077			31,129			45,679			38,799			31,839
	Normalized FFO attributable to EQC common shareholders(3)	29,601			28,919			53,591			37,314			34,439
SHARES OUTSTANDING AND PER SHARE DATA (4)
	Shares Outstanding at End of Period
	Common stock outstanding - basic (includes unvested restricted shares)	123,994			125,533			125,533			125,503			126,350
	Dilutive restricted share units ("RSU"s) (4)	1,027			1,035			1,429			1,754			1,143
	Dilutive Series D Convertible Preferred Shares Outstanding(5)	—			—			—			—			—
	Preferred Stock Outstanding (5) (6)	4,915			4,915			4,915			15,915			15,915
	Weighted Average Shares Outstanding
	Weighted Average Common shares outstanding - basic	125,021			125,533			125,508			125,840			126,350
	Weighted Average Common shares outstanding - diluted	126,048			126,568			126,937			127,522			127,493
	Net income attributable to EQC common shareholders - basic	$	0.08		$	0.67		$	0.57		$	0.31		$	0.29
	Net income attributable to EQC common shareholders - diluted	0.08			0.67			0.56			0.31			0.28
	Normalized FFO attributable to EQC common shareholders - diluted	0.23			0.23			0.42			0.29			0.27
BALANCE SHEET
	Total assets	$4,526,075			$4,965,767			$4,911,775			$5,103,149			$5,231,164
	Total liabilities	1,265,628			1,676,727			1,713,137			1,715,778			1,862,677
ENTERPRISE VALUE
	Total debt (book value)	$1,141,667			$1,557,260			$1,557,557			$1,557,839			$1,697,116
	Less: Cash and cash equivalents	(2,094,674)			(2,405,174)			(1,772,337)			(1,742,128		)	(1,802,729		)
	Plus: Market value of preferred shares (at end of period)	125,731			133,202			128,434			402,991			403,792
	Plus: Market value of dilutive common shares (at end of period)	3,780,649			3,824,864			3,698,408			3,591,179			3,535,381
	Total enterprise value	$2,953,373			$3,110,152			$3,612,062			$3,809,881			$3,833,560
RATIOS
	Net debt / enterprise value	(32.3)		%	(27.3		)%	(5.9		)%	(4.8		)%	(2.8		)%
	Net debt / annualized adjusted EBITDA (3)	(4.5		)x	(3.9		)x	(0.6		)x	(0.7		)x	(0.4		)x
	Adjusted EBITDA (3) / interest expense	2.7		x	2.6		x	3.9		x	3.1		x	2.7		x

(1)	Excludes properties classified as held for sale. As of December 31, 2016, land parcels are excluded from the property count.
(2)	Changes in total square footage result from remeasurement and property dispositions and reclassifications.
(3)	Non-GAAP financial measures are defined and reconciled to the most directly comparable GAAP measure, herein.
(4)	Restricted share units ("RSU"s) are equity awards that contain both service and market-based vesting components. None of the RSUs have vested. Refer to the schedule of Common & Potential Common Shares for information regarding RSUs and their impact on weighted average shares outstanding.
(5)	As of December 31, 2016, we had 4,915 series D preferred shares outstanding that were convertible into 2,363 common shares. We exclude these shares from dilutive shares outstanding on December 31, 2016, given this conversion ratio relative to our current common stock price. 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.
(6)	On May 15, 2016, we redeemed all of our 11,000,000 outstanding series E preferred shares at a price of $25.00 per share, plus any accrued and unpaid dividends. The redemption payment occurred on May 16, 2016 (the first business day following the redemption date).

4

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

	December 31, 2016			December 31, 2015
ASSETS
Real estate properties:
Land	$	286,186		$	389,410
Buildings and improvements	2,570,704			3,497,942
	2,856,890			3,887,352
Accumulated depreciation	(755,255		)	(898,939		)
	2,101,635			2,988,413
Acquired real estate leases, net	48,281			88,760
Cash and cash equivalents	2,094,674			1,802,729
Restricted cash	6,532			32,245
Rents receivable, net of allowance for doubtful accounts of $5,105 and $7,715, respectively	152,031			174,676
Other assets, net	122,922			144,341
Total assets	$	4,526,075		$	5,231,164
LIABILITIES AND SHAREHOLDERS’ EQUITY
Revolving credit facility	$	—		$	—
Senior unsecured debt, net	1,063,950			1,450,606
Mortgage notes payable, net	77,717			246,510
Accounts payable and accrued expenses	95,395			123,587
Assumed real estate lease obligations, net	1,946			4,296
Rent collected in advance	18,460			27,340
Security deposits	8,160			10,338
Total liabilities	$	1,265,628		$	1,862,677
Shareholders’ equity:
Preferred shares of beneficial interest, $0.01 par value: 50,000,000 shares authorized;
Series D preferred shares; 6 1/2% cumulative convertible; 4,915,196 shares issued and outstanding, aggregate liquidation preference of $122,880	$	119,263		$	119,263
Series E preferred shares; 7 1/4% cumulative redeemable on or after May 15, 2016; 0 and 11,000,000 shares issued and outstanding, respectively, aggregate liquidation preference $0 and $275,000, respectively	—			265,391
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized; 123,994,465 and 126,349,914 shares issued and outstanding, respectively	1,240			1,263
Additional paid in capital	4,363,177			4,414,611
Cumulative net income	2,566,603			2,333,709
Cumulative other comprehensive loss	(208		)	(3,687		)
Cumulative common distributions	(3,111,868		)	(3,111,868		)
Cumulative preferred distributions	(677,760		)	(650,195		)
Total shareholders’ equity	$	3,260,447		$	3,368,487
Total liabilities and shareholders’ equity	$	4,526,075		$	5,231,164

5

ADDITIONAL BALANCE SHEET INFORMATION

(amounts in thousands)

	December 31, 2016		December 31, 2015
Additional Balance Sheet Information
Straight-line rents receivable, net of allowance for doubtful accounts	$	141,637	$	157,600
Accounts receivable, net of allowance for doubtful accounts	10,394		17,076
Rents receivable, net of allowance for doubtful accounts	$	152,031	$	174,676
Capitalized lease incentives, net	$	7,664	$	9,124
Deferred financing fees, net	3,365		4,980
Deferred leasing costs, net	92,623		110,228
Other	19,270		20,009
Other assets, net	$	122,922	$	144,341
Accounts payable	$	5,159	$	5,321
Accrued interest	15,265		19,971
Accrued taxes	26,819		36,724
Accrued capital expenditures	11,138		21,136
Accrued leasing costs	10,828		802
Other accrued liabilities	26,186		39,633
Accounts payable and accrued expenses	$	95,395	$	123,587

6

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share data)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2016			2015			2016			2015
Revenues
Rental income	$	84,726		$	113,254		$	409,071		$	570,382
Tenant reimbursements and other income	18,820			25,680			91,609			144,509
Total revenues	$	103,546		$	138,934		$	500,680		$	714,891
Expenses:
Operating expenses	$	42,742		$	63,820		$	200,706		$	324,948
Depreciation and amortization	29,040			37,143			131,806			194,001
General and administrative	11,490			13,739			50,256			57,457
Loss on asset impairment	14,740			—			58,476			17,162
Total expenses	$	98,012		$	114,702		$	441,244		$	593,568
Operating income	$	5,534		$	24,232		$	59,436		$	121,323
Interest and other income	3,147			1,176			10,331			5,989
Interest expense (including net amortization of debt discounts, premiums and deferred financing fees of $845, $1,005, $3,725, and $1,028, respectively)	(19,255		)	(24,390		)	(84,329		)	(107,316		)
(Loss) gain on early extinguishment of debt	(2,562		)	550			(2,680		)	6,661
Foreign currency exchange gain (loss)	—			96			(5		)	(8,857		)
Gain on sale of properties, net	25,676			41,468			250,886			84,421
Income before income taxes	12,540			43,132			233,639			102,221
Income tax (expense) benefit	(280		)	13			(745		)	(2,364		)
Net income	$	12,260		$	43,145		$	232,894		$	99,857
Preferred distributions	(1,997		)	(6,981		)	(17,956		)	(27,924		)
Excess fair value of consideration paid over carrying value of preferred shares (1)	—			—			(9,609		)	—
Net income attributable to Equity Commonwealth common shareholders	$	10,263		$	36,164		$	205,329		$	71,933

Weighted average common shares outstanding — basic (2)	125,021		126,350		125,474		128,621
Weighted average common shares outstanding — diluted (2)	126,048		127,493		126,768		129,437
Earnings per common share attributable to Equity Commonwealth common shareholders:
Basic	$	0.08	$	0.29	$	1.64	$	0.56
Diluted	$	0.08	$	0.28	$	1.62	$	0.56

(1)

On May 15, 2016, we redeemed all of our 11,000,000 outstanding series E preferred shares at a price of $25.00 per share, for a total of $275.0 million, plus any accrued and unpaid dividends. The redemption payment occurred on May 16, 2016 (the first business day following the redemption date). We recorded $9.6 million related to the excess fair value of consideration paid over the carrying value of the preferred shares as a reduction to net income attributable to Equity Commonwealth common shareholders for the year ended December 31, 2016.

(2)

Refer to the schedule of Common & Potential Common Shares for information regarding the components of our weighted average common shares outstanding.

7

ADDITIONAL INCOME STATEMENT INFORMATION

(amounts in thousands)

Additional Income Statement Information
	Three Months Ended				Year Ended
	December 31,				December 31,
	2016		2015		2016		2015
Non-recurring General and administrative
Shareholder litigation and transition related expenses (1)	$	—	$	2,138	$	999	$	10,869
Transition services fee paid to RMR (2)	—		66		—		2,679
Gain on sale of properties, net
Gain excluding reclassification of accumulated foreign currency translation adjustment	$	25,676	$	41,468	$	250,886	$	147,628
Reclassification of accumulated foreign currency translation adjustment	—		—		—		(63,207		)
Total gain on sale of properties, net	$	25,676	$	41,468	$	250,886	$	84,421

(1	)	Shareholder litigation and transition related expenses within general and administrative for the year ended December 31, 2016 is primarily related to the shareholder-approved liability for the reimbursement of expenses incurred by Related/Corvex since February 2013 in connection with their consent solicitations to remove the former Trustees, elect the new Board of Trustees and engage in related litigation. Approximately $16.7 million was reimbursed to Related/Corvex during 2014, and in August 2016 and 2015, we reimbursed $8.2 million and $8.4 million, respectively, to Related/Corvex under the terms of the shareholder-approved agreement. As of December 31, 2016, there is no future obligation to pay any amounts under the shareholder-approved agreement to Related/Corvex. No shareholder litigation related expenses were incurred during 2016.
(2	)	Amounts represent general and administrative expenses under our now-terminated business management agreement with our former manager.

8

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

(amounts in thousands)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2016			2015			2016			2015
Calculation of Same Property NOI and Same Property Cash Basis NOI:
Rental income	$	84,726		$	113,254		$	409,071		$	570,382
Tenant reimbursements and other income	18,820			25,680			91,609			144,509
Operating expenses	(42,742		)	(63,820		)	(200,706		)	(324,948		)
NOI	$	60,804		$	75,114		$	299,974		$	389,943
Straight line rent adjustments	(1,699		)	(1,744		)	(14,083		)	(5,328		)
Lease value amortization	661			1,482			6,531			7,515
Lease termination fees	(3,803		)	(309		)	(23,372		)	(8,184		)
Cash Basis NOI	$	55,963		$	74,543		$	269,050		$	383,946
Cash Basis NOI from non-same properties (1)	(1,126		)	(22,348		)	(50,139		)	(159,027		)
Same Property Cash Basis NOI	$	54,837		$	52,195		$	218,911		$	224,919
Non-cash rental and termination income from same properties	4,750			102			14,737			1,822
Same Property NOI	$	59,587		$	52,297		$	233,648		$	226,741
Reconciliation of Same Property NOI to GAAP Operating Income:
Same Property NOI	$	59,587		$	52,297		$	233,648		$	226,741
Non-cash rental and termination income from same properties	(4,750		)	(102		)	(14,737		)	(1,822		)
Same Property Cash Basis NOI	$	54,837		$	52,195		$	218,911		$	224,919
Cash Basis NOI from non-same properties (1)	1,126			22,348			50,139			159,027
Cash Basis NOI	$	55,963		$	74,543		$	269,050		$	383,946
Straight line rent adjustments	1,699			1,744			14,083			5,328
Lease value amortization	(661		)	(1,482		)	(6,531		)	(7,515		)
Lease termination fees	3,803			309			23,372			8,184
NOI	$	60,804		$	75,114		$	299,974		$	389,943
Depreciation and amortization	(29,040		)	(37,143		)	(131,806		)	(194,001		)
General and administrative	(11,490		)	(13,739		)	(50,256		)	(57,457		)
Loss on asset impairment	(14,740		)	—			(58,476		)	(17,162		)
Operating Income	$	5,534		$	24,232		$	59,436		$	121,323

(1) Cash Basis NOI from non-same properties for all periods presented includes the operations of properties disposed.

9

SAME PROPERTY RESULTS OF OPERATIONS

(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,
	2016			2015			% Change		2016			2015			% Change
Properties	33			33					33			33
Square Feet (1)	16,053			15,933					16,053			15,933
% Leased	91.1		%	91.8		%	(0.7	)%	91.1		%	91.8		%	(0.7)	%
Rents, tenant reimbursements and other income	$	97,386		$	95,213				$	381,565		$	388,209
Straight line rent adjustment	1,605			724					12,892			2,368
Lease value amortization	(657		)	(729		)			(2,721		)	(4,117		)
Lease termination fees	3,802			107					4,566			3,571
Total revenue	102,136			95,315			7.2	%	396,302			390,031			1.6	%
Operating expenses	(42,549		)	(43,018		)	(1.1)	%	(162,654		)	(163,290		)	(0.4)	%
NOI	$	59,587		52,297			13.9	%	233,648			226,741			3.0	%
NOI Margin	58.3		%	54.9		%			59.0		%	58.1		%
Straight line rent adjustment	(1,605		)	(724		)			(12,892		)	(2,368		)
Lease value amortization	657			729					2,721			4,117
Lease termination fees	(3,802		)	(107		)			(4,566		)	(3,571		)
Cash Basis NOI	54,837			52,195			5.1	%	218,911			224,919			(2.7)	%
Cash Basis NOI Margin	56.3		%	54.8		%			57.4		%	57.9		%

(1) The change in total square footage results from remeasurement.

10

CALCULATION OF EBITDA AND ADJUSTED EBITDA

(amounts in thousands)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2016			2015			2016			2015
Net income	$	12,260		$	43,145		$	232,894		$	99,857
Interest expense	19,255			24,390			84,329			107,316
Income tax expense (benefit)	280			(13		)	745			2,364
Depreciation and amortization	29,040			37,143			131,806			194,001
EBITDA	$	60,835		$	104,665		$	449,774		$	403,538
Loss on asset impairment	14,740			—			58,476			17,162
Loss (gain) on early extinguishment of debt	2,562			(550		)	2,680			(6,661		)
Shareholder litigation costs and transition-related expenses	—			2,138			999			10,869
Transition services fee	—			66			—			2,679
Gain on sale of properties, net	(25,676		)	(41,468		)	(250,886		)	(84,421		)
Foreign currency exchange (gain) loss	—			(96		)	5			8,857
Adjusted EBITDA	$	52,461		$	64,755		$	261,048		$	352,023

11

CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO

(amounts in thousands, except per share data)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2016			2015			2016			2015
Calculation of FFO
Net income	$	12,260		$	43,145		$	232,894		$	99,857
Real estate depreciation and amortization	28,750			37,143			130,765			194,001
Loss on asset impairment	14,740			—			58,476			17,162
Gain on sale of properties, net	(25,676		)	(41,468		)	(250,886		)	(84,421		)
FFO attributable to Equity Commonwealth	30,074			38,820			171,249			226,599
Preferred distributions	(1,997		)	(6,981		)	(17,956		)	(27,924		)
Excess fair value of consideration paid over carrying value of preferred shares (1)	—			—			(9,609		)	—
FFO attributable to EQC Common Shareholders	$	28,077		$	31,839		$	143,684		$	198,675
Calculation of Normalized FFO
FFO attributable to EQC common shareholders	$	28,077		$	31,839		$	143,684		$	198,675
Lease value amortization	661			1,482			6,531			7,515
Straight line rent adjustments	(1,699		)	(1,744		)	(14,083		)	(5,328		)
Loss (gain) on early extinguishment of debt	2,562			(550		)	2,680			(6,661		)
Minimum cash rent from direct financing lease (2)	—			1,355			—			7,451
Interest earned from direct financing lease	—			(51		)	—			(407		)
Shareholder litigation and transition related expenses (3)	—			2,138			999			10,869
Transition services fee	—			66			—			2,679
Gain on sale of securities	—			—			—			(3,080		)
Foreign currency exchange (gain) loss	—			(96		)	5			8,857
Excess fair value of consideration paid over carrying value of preferred shares (1)	—			—			9,609			—
Normalized FFO attributable to EQC Common Shareholders	$	29,601		$	34,439		$	149,425		$	220,570
Weighted average common shares outstanding -- basic (4)	125,021			126,350			125,474			128,621
Weighted average common shares outstanding -- diluted (4)	126,048			127,493			126,768			129,437
FFO attributable to EQC common shareholders per share -- basic	$	0.22		$	0.25		$	1.15		$	1.54
FFO attributable to EQC common shareholders per share -- diluted	$	0.22		$	0.25		$	1.13		$	1.53
Normalized FFO attributable to EQC common shareholders per share -- basic	$	0.24		$	0.27		$	1.19		$	1.71
Normalized FFO attributable to EQC common shareholders per share -- diluted	$	0.23		$	0.27		$	1.18		$	1.70

(1)	On May 15, 2016, we redeemed all of our 11,000,000 outstanding series E preferred shares at a price of $25.00 per share, for a total of $275.0 million, plus any accrued and unpaid dividends. The redemption payment occurred on May 16, 2016 (the first business day following the redemption date). We recorded $9.6 million related to the excess fair value of consideration paid over the carrying value of the preferred shares as a reduction to FFO attributable to Equity Commonwealth common shareholders for the year ended December 31, 2016.
(2)	Amounts relate to contractual cash payments (including management fees) from one tenant at Arizona Center. Arizona Center was sold during the fourth quarter of 2015. Our calculation of Normalized FFO reflects the cash payments received from this tenant. The terms of this tenant's lease required us to classify the lease as a direct financing (or capital) lease. As such, the revenue recognized on a GAAP basis within our condensed consolidated statements of operations was $(281) for the three months ended December 31, 2015, and $98 for the year ended December 31, 2015.
(3)	Refer to the Additional Income Statement Information for a discussion of expenses related to the shareholder-approved Related/Corvex consent solicitation liability. No shareholder litigation related expenses were incurred during 2016.
(4)	Refer to the schedule of Common & Potential Common Shares for information regarding the components of our weighted average common shares outstanding.

12

DEBT SUMMARY

As of December 31, 2016

(dollars in thousands)

	Interest Rate		Principal Balance		Maturity Date	Open at Par Date	Due at Maturity		Years to Maturity
Unsecured Debt:
Unsecured Floating Rate Debt:
Revolving credit facility (LIBOR + 125 bps) (1)	2.02	%	$	—	1/28/2019	Open	$	—	2.1
Term loan (LIBOR + 140 bps) (2)	2.17	%	200,000		1/28/2020	Open	200,000		3.1
Term loan (LIBOR + 180 bps) (2)	2.57	%	200,000		1/28/2022	Open	200,000		5.1
Total / weighted average unsecured floating rate debt	2.37	%	$	400,000			$	400,000	4.1
Unsecured Fixed Rate Debt:
6.65% Senior Unsecured Notes Due 2018	6.65	%	$	250,000	1/15/2018	7/15/2017	$	250,000	1.0
5.875% Senior Unsecured Notes Due 2020	5.88	%	250,000		9/15/2020	3/15/2020	250,000		3.7
5.75% Senior Unsecured Notes Due 2042	5.75	%	175,000		8/1/2042	8/1/2017	175,000		25.6
Total / weighted average unsecured fixed rate debt	6.13	%	$	675,000			$	675,000	8.4
Secured Debt:
Secured Fixed Rate Debt:
Parkshore Plaza (3)	5.67	%	$	41,275	5/1/2017	12/1/2016	$	41,275	0.3
206 East 9th Street	5.69	%	27,041		1/5/2021	7/5/2020	24,836		4.0
33 Stiles Lane	6.75	%	2,415		3/1/2022	12/1/2021	—		5.2
97 Newberry Road	5.71	%	5,903		3/1/2026	None	—		9.2
Total / weighted average secured fixed rate debt	5.71	%	$	76,634			$	66,111	2.4
Total / weighted average (4)	4.80	%	$	1,151,634			$	1,141,111	6.5

(1)	Represents amounts outstanding on EQC's $750,000 revolving credit facility as of December 31, 2016. The interest rate presented is as of December 31, 2016, and equals LIBOR plus 1.25%. We also pay a 25 basis point facility fee annually. The spread over LIBOR and the facility fee vary depending upon EQC's credit rating.
(2)	Represents amounts outstanding on EQC's term loans as of December 31, 2016. The interest rate presented is as of December 31, 2016, and equals LIBOR plus 1.4% for the loan maturing on January 28, 2020, and LIBOR plus 1.8% for the loan maturing January 28, 2022. The spreads over LIBOR vary depending upon EQC's credit rating. We entered into an interest rate cap with coverage effective April 1, 2016 that caps LIBOR at 2.5% until March 1, 2019.
(3)	EQC guarantees $3.2 million of this non-recourse loan.
(4)	Total debt outstanding as of December 31, 2016, including net unamortized premiums, discounts, and deferred financing fees was $1,141,667. Net unamortized deferred financing fees related to our revolving credit facility of $3,365 are included in other assets, net on our condensed consolidated balance sheets as of December 31, 2016.

13

DEBT MATURITY SCHEDULE

(dollars in thousands)

Scheduled Payments During Period
Year	Unsecured Floating Rate Debt				Unsecured Fixed Rate Debt			Secured Fixed Rate Debt			Total				Weighted Average Interest Rate
2017	$	—			$	—		$	42,675		$	42,675			5.7	%
2018	—				250,000			1,488			251,488				6.6	%
2019	—				—			1,580			1,580				6.0	%
2020	200,000			(1)	250,000			1,674			451,674				4.2	%
2021	—				—			25,982			25,982				5.7	%
2022	200,000			(1)	—			799			200,799				2.6	%
2023	—				—			702			702				5.7	%
2024	—				—			743			743				5.7	%
2025	—				—			787			787				5.7	%
2026	—				—			204			204				5.7	%
Thereafter	—				175,000			—			175,000				5.8	%
Total	$	400,000			$	675,000		$	76,634		$	1,151,634		(2)	4.8	%
Percent	34.7		%		58.6		%	6.7		%	100.0		%

(1)

Represents amounts outstanding on EQC's term loans as of December 31, 2016. The interest rate presented is as of December 31, 2016, and equals LIBOR plus 1.4% for the loan maturing on January 28, 2020, and LIBOR plus 1.8% for the loan maturing January 28, 2022. The spreads over LIBOR vary depending upon EQC's credit rating. We entered into an interest rate cap with coverage effective April 1, 2016 that caps LIBOR at 2.5% until March 1, 2019.

(2)

Total debt outstanding as of December 31, 2016, including net unamortized premiums, discounts, and deferred financing fees was $1,141,667. Net unamortized deferred financing fees related to our revolving credit facility of $3,365 are included in other assets, net on our condensed consolidated balance sheets as of December 31, 2016.

14

LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS

(dollars in thousands)

	As of and for the Three Months Ended
	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
Leverage Ratios
Total debt / total assets	25.2	%	31.4	%	31.7	%	30.5	%	32.4	%
Total debt / total market capitalization	22.6	%	28.2	%	28.9	%	28.1	%	30.1	%
Total debt + preferred stock / total market capitalization	25.1	%	30.7	%	31.3	%	35.3	%	37.3	%
Total debt / annualized adjusted EBITDA (1)	5.4	x	7.1	x	4.6	x	5.6	x	6.6	x
Total debt + preferred stock / annualized adjusted EBITDA (1)	6.0	x	7.7	x	5.0	x	7.0	x	8.1	x
Net debt / enterprise value	(32.3)	%	(27.3)	%	(5.9)	%	(4.8)	%	(2.8)	%
Net debt + preferred stock / enterprise value	(28.0	)%	(23.0	)%	(2.4	)%	5.7	%	7.8	%
Net debt / annualized adjusted EBITDA (1)	(4.5	)x	(3.9	)x	(0.6	)x	(0.7	)x	(0.4	)x
Net debt + preferred stock / annualized adjusted EBITDA (1)	(3.9	)x	(3.3	)x	(0.3	)x	0.8	x	1.2	x
Secured debt / total assets	1.7	%	4.9	%	5.0	%	4.8	%	4.7	%
Variable rate debt (2) / total debt	35.0	%	25.7	%	25.7	%	25.7	%	23.6	%
Variable rate debt (2) / total assets	8.8	%	8.1	%	8.1	%	7.8	%	7.6	%
Coverage Ratios
Adjusted EBITDA (1) / interest expense	2.7	x	2.6	x	3.9	x	3.1	x	2.7	x
Adjusted EBITDA (1) / interest expense + preferred distributions	2.5	x	2.3	x	3.0	x	2.4	x	2.1	x
Public Debt Covenants
Debt / adjusted total assets (3) (maximum 60%)	21.9	%	27.6	%	27.2	%	26.4	%	27.9	%
Secured debt / adjusted total assets (3) (maximum 40%)	1.5	%	4.3	%	4.3	%	4.1	%	4.0	%
Consolidated income available for debt service / debt service (minimum 1.5x)	3.3	x	2.3	x	3.0	x	3.1	x	2.9	x
Total unencumbered assets (3) / unsecured debt (minimum 150% / 200%)	475.9	%	392.0	%	399.2	%	412.7	%	386.9	%

(1)	Refer to the Calculation of EBITDA and Adjusted EBITDA for a reconciliation of these measures to Net income.
(2)	We entered into an interest rate cap with coverage effective April 1, 2016 that caps LIBOR at 2.5% until March 1, 2019.
(3)	Adjusted total assets and total unencumbered assets includes original cost of real estate assets plus capital improvements, both calculated in accordance with GAAP, and excludes depreciation and amortization, accounts receivable, other intangible assets and impairment write downs, if any.

15

ACQUISITIONS AND DISPOSITIONS

(dollars in thousands)

Acquisitions

In October 2016, we purchased a parcel of land adjacent to our Research Park property in Austin, Texas for $2.8 million.

Dispositions
Property/Portfolio	City	State	No. of Properties	Sq. Feet (1)	% Leased(1)		Gross Sales Price			Net Book Value (1)		Annualized Rental Revenue (1)
Executive Park	Atlanta	GA	1	427,443	72.8	%	$	50,865		$	29,365	$	4,990
3330 N Washington Blvd	Arlington	VA	1	55,719	15.3	%	11,250			5,519		273
111 East Kilbourn Avenue	Milwaukee	WI	1	373,669	81.1	%	60,500			44,577		8,169
Total Q1 Dispositions			3	856,831	72.7	%	$	122,615		$	79,461	$	13,432
633 Ahua Street	Honolulu	HI	1	93,141	81.5	%	$	29,000		$	12,545	$	1,808
1525 Locust Street	Philadelphia	PA	1	98,009	95.4	%	17,700			7,024		2,337
Downtown Austin Portfolio	Austin	TX	2	115,540	89.9	%	32,600			10,835		3,094
Lakewood on the Park	Austin	TX	1	180,558	84.1	%	37,100			22,371		3,516
Leased Land (Vineyards)	Gonzalez	CA	1	—	—	%	48,450			28,957		2,965
9110 East Nichols Avenue	Centennial	CO	1	143,958	99.8	%	17,200			13,711		2,433
Movie Theaters	Multiple	Multi.	6	551,960	100.0	%	109,100			62,082		7,751
Total Q2 Dispositions			13	1,183,166	94.7	%	$	291,150		$	157,525	$	23,904
111 River Street	Hoboken	NJ	1	566,215	100.0	%	$	235,000	(2)	$	115,428	$	23,440
South Carolina Industrial Portfolio	Multiple	SC	3	803,687	100.0	%	30,000			20,871		2,952
Sky Park Centre	San Diego	CA	1	63,485	100.0	%	13,700			6,385		1,429
Raintree Industrial Park	Solon	OH	1	563,182	81.2	%	11,500			11,259		2,066
8701 N Mopac	Austin	TX	1	121,901	79.1	%	21,500			11,907		2,290
Midwest Portfolio	Multiple	Multi.	4	3,064,224	86.5	%	416,900		(3)	355,125		58,987
Total Q3 Dispositions			11	5,182,694	89.5	%	$	728,600		$	520,975	$	91,164
7800 Shoal Creek Boulevard	Austin	TX	1	151,917	99.7	%	$	29,210		$	12,952	$	3,699
1200 Lakeside Drive	Bannockburn	IL	1	260,084	100.0	%	65,270			56,207		4,537
6200 Glenn Carlson Drive	St. Cloud	MN	1	338,000	100.0	%	23,050			13,337		2,196
Total Q4 Dispositions			3	750,001	99.9	%	$	117,530		$	82,496	$	10,432
Total Disposed Year-to-Date			30	7,972,692	89.4	%	$	1,259,895		$	840,457	$	138,932

The dispositions above resulted in a net gain on sale of properties of $25.7 million and $250.9 million for the three months and year ended December 31, 2016, respectively.

(1	)	As of the quarter-ended preceding each sale.
(2	)	Property sale represented a leasehold interest. Proceeds from the sale of 111 River Street, after credits for contractual lease costs, were $210.8 million.
(3	)	Proceeds from the sale of the Midwest Portfolio, after credits for rent abatements and contractual lease costs, were $376.2 million.

16

TOP PROPERTIES BY ANNUALIZED RENTAL REVENUE

As of December 31, 2016

(sorted by annualized rental revenue, dollars in thousands)

Property		City	State	No. of Buildings		Sq. Feet		% Leased			Annualized Rental Revenue			Undepreciated Book Value		Net Book Value		Year Acquired	Weighted Average Year Built or Substantially Renovated (1)
1	600 West Chicago Avenue	Chicago	IL	2		1,511,887		98.6		%	$	49,406		$	395,444	$	349,605	2011	2001
2	1500 Market Street	Philadelphia	PA	1		1,759,193		92.4		%	39,245			304,546		215,829		2002	1974
3	1735 Market Street	Philadelphia	PA	1		1,290,678		74.4		%	27,106			302,533		184,128		1998	1990
4	1225 Seventeenth Street	Denver	CO	1		672,443		90.5		%	23,822			156,803		130,813		2009	1982
5	1600 Market Street	Philadelphia	PA	1		826,789		86.8		%	20,744			135,851		76,416		1998	1983
6	333 108th Avenue NE	Bellevue	WA	1		440,565		100.0		%	20,455			153,219		127,431		2009	2008
7	6600 North Military Trail	Boca Raton	FL	3		639,825		100.0		%	16,990			145,808		126,337		2011	2008
8	8750 Bryn Mawr Avenue	Chicago	IL	2		637,230		95.8		%	16,164			93,605		79,194		2010	2005
9	111 Market Place (2)	Baltimore	MD	1		589,380		95.4		%	12,583			71,555		44,199		2003	1990
10	Bridgepoint Square	Austin	TX	5		440,007		92.8		%	12,385			91,332		51,624		1997	1995
11	Foster Plaza	Pittsburgh	PA	8		727,365		83.4		%	11,869			76,256		54,703		2005	1993
12	Research Park	Austin	TX	4		1,110,007		98.0		%	11,709			93,444		61,149		1998	1976
13	109 Brookline Avenue	Boston	MA	1		285,556		99.7		%	10,826			47,536		27,340		1995	1915
14	East Eisenhower Parkway	Ann Arbor	MI	2		421,349		92.4		%	10,569			56,376		48,187		2010	2006
15	1601 Dry Creek Drive	Longmont	CO	1		552,865		97.0		%	8,865			34,550		24,538		2004	1982
	Subtotal (15 properties)			34		11,905,139		92.1		%	$	292,738		$	2,158,858	$	1,601,493
	All other properties (18 properties)			30		4,148,209		88.2		%	81,812			698,032		500,142
	Total (33 properties)			64		16,053,348		91.1		%	$	374,550		$	2,856,890	$	2,101,635
	Same Property NOI & Cash Basis NOI Composition			Q4 2016 NOI		% of NOI		Q4 2016 Cash Basis NOI			% of Cash Basis NOI
	Top 15 Properties			$	46,211	77.6	%	$	41,449		75.6		%
	All other properties (18 properties)			13,376		22.4	%	13,388			24.4		%
	Total (33 properties)			$	59,587	100.0	%	$	54,837		100.0		%

(1)	Weighted based on square feet.
(2)	On January 31, 2017, we sold 111 Market Place for $60.1 million.

17

LEASING SUMMARY

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

	As of and for the Three Months Ended
	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Properties (1)	33			37			45			60			65
Total square feet (1)(2)	16,053			16,710			20,675			23,037			23,952
Percentage leased	91.1		%	91.2		%	90.3		%	91.4		%	91.4		%
Total Leases
Square feet	1,411			237			802			1,853			984
Lease term (years)	10.3			7.4			8.4			7.8			6.7
Starting cash rent	$	16.98		$	27.28		$	25.73		$	29.48		$	24.57
Percent change in cash rent (3)	7.3		%	(5.8)		%	(3.7)		%	(1.3)		%	5.6		%
Percent change in GAAP rent (3)	20.2		%	9.0		%	6.9		%	11.2		%	15.5		%
Total TI & LC per square foot (4)	$	32.52		$	47.05		$	48.85		$	25.44		$	38.44
Total TI & LC per sq. ft. per year of lease term (4)	$	3.16		$	6.38		$	5.84		$	3.27		$	5.74
Renewal Leases
Square feet	1,190			46			307			1,569			585
Lease term (years)	9.6			4.9			5.5			7.4			4.0
Starting cash rent	$	13.89		$	37.77		$	23.56		$	28.92		$	23.58
Percent change in cash rent (3)	3.9		%	14.6		%	(1.0)		%	0.3		%	5.4		%
Percent change in GAAP rent (3)	16.2		%	24.1		%	9.3		%	13.2		%	15.3		%
Total TI & LC per square foot (4)	$	21.14		$	24.13		$	18.68		$	17.33		$	15.13
Total TI & LC per sq. ft. per year of lease term (4)	$	2.19		$	4.92		$	3.42		$	2.33		$	3.81
New Leases
Square feet	221			191			495			284			399
Lease term (years)	13.8			8.0			10.2			9.7			10.7
Starting cash rent	$	33.60		$	24.76		$	27.08		$	32.55		$	26.03
Percent change in cash rent (3)	15.8		%	(12.6)		%	(5.4)		%	(8.9)		%	6.4		%
Percent change in GAAP rent (3)	30.9		%	3.4		%	5.5		%	1.9		%	16.3		%
Total TI & LC per square foot (4)	$	93.82		$	52.57		$	67.56		$	69.13		$	72.68
Total TI & LC per sq. ft. per year of lease term (4)	$	6.79		$	6.59		$	6.64		$	7.15		$	6.78

The above leasing summary is based on leases executed during the periods indicated.
(1)	Excludes properties classified as held for sale. As of December 31, 2016, land parcels are excluded from the property count.
(2)	Changes in total square footage result from remeasurement and property dispositions and reclassifications.
(3)	Percent change in GAAP and cash rent is a comparison of current rent (rent before deducting any initial period free rent), including tenant expense reimbursements, if any, to the rent, including tenant expense reimbursements, if any, last received for the same space on a GAAP and cash basis, respectively. New leasing in suites vacant longer than 2 years was excluded from the calculation.
(4)	Includes tenant improvements (TI) and leasing commissions (LC).

18

SAME PROPERTY LEASING SUMMARY

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

	As of and for the Three Months Ended
	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Properties	33			33			33			33			33
Total square feet (1)	16,053			16,008			16,008			16,008			15,933
Percentage leased	91.1		%	90.8		%	90.9		%	91.7		%	91.8		%
Total Leases
Square feet	1,411			237			432			1,083			766
Lease term (years)	10.3			7.4			7.1			5.0			7.2
Starting cash rent	$	16.98		$	27.28		$	28.85		$	39.01		$	26.65
Percent change in cash rent (2)	7.3		%	(5.8)		%	1.2		%	(2.5)		%	6.1		%
Percent change in GAAP rent (2)	20.2		%	9.0		%	10.3		%	6.9		%	16.4		%
Total TI & LC per square foot (3)	$	32.52		$	47.05		$	42.31		$	26.38		$	44.49
Total TI & LC per sq. ft. per year of lease term (3)	$	3.16		$	6.38		$	5.94		$	5.28		$	6.20
Renewal Leases
Square feet	1,190			46			224			839			419
Lease term (years)	9.6			4.9			5.7			3.4			3.8
Starting cash rent	$	13.89		$	37.77		$	25.47		$	40.47		$	26.52
Percent change in cash rent (2)	3.9		%	14.6		%	(0.6)		%	(0.3)		%	5.7		%
Percent change in GAAP rent (2)	16.2		%	24.1		%	10.6		%	9.0		%	15.5		%
Total TI & LC per square foot (3)	$	21.14		$	24.13		$	21.10		$	11.30		$	16.28
Total TI & LC per sq. ft. per year of lease term (3)	$	2.19		$	4.92		$	3.68		$	3.32		$	4.32
New Leases
Square feet	221			191			208			244			347
Lease term (years)	13.8			8.0			8.6			10.4			11.3
Starting cash rent	$	33.60		$	24.76		$	32.49		$	33.98		$	26.80
Percent change in cash rent (2)	15.8		%	(12.6)		%	3.3		%	(11.4)		%	7.0		%
Percent change in GAAP rent (2)	30.9		%	3.4		%	10.0		%	(1.0)		%	18.9		%
Total TI & LC per square foot (3)	$	93.82		$	52.57		$	65.15		$	78.25		$	78.53
Total TI & LC per sq. ft. per year of lease term (3)	$	6.79		$	6.59		$	7.56		$	7.49		$	6.96

The above leasing summary is based on leases executed during the periods indicated.
(1)	Changes in total square footage result from remeasurement.
(2)	Percent change in GAAP and cash rent is a comparison of current rent (rent before deducting any initial period free rent), including tenant expense reimbursements, if any, to the rent, including tenant expense reimbursements, if any, last received for the same space on a GAAP and cash basis, respectively. New leasing in suites vacant longer than 2 years was excluded from the calculation.
(3)	Includes tenant improvements (TI) and leasing commissions (LC).

19

CAPITAL SUMMARY

EXPENDITURES & LEASING COMMITMENTS

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

CAPITAL SUMMARY	Three Months Ended
EXPENDITURES	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
Tenant improvements	$	15,636	$	20,411	$	19,537	$	25,391	$	20,874
Leasing costs	11,663		2,292		10,609		9,765		9,858
Building improvements (1)	6,571		8,942		7,713		6,541		8,151
Total capital expenditures	$	33,870	$	31,645	$	37,859	$	41,697	$	38,883
Average square feet during period (2)	16,382		19,454		22,637		23,590		24,605
Building improvements per average total sq. ft. during period	$	0.40	$	0.46	$	0.34	$	0.28	$	0.33

CAPITAL SUMMARY	Three Months Ended
LEASING COMMITMENTS	December 31, 2016
	New Leases		Renewals		Total
Rentable square feet leased during the period	221		1,190		1,411
Total TI & LC (3)	$	20,734	$	25,157	$	45,891
Total TI & LC per rentable square foot (3)	$	93.82	$	21.14	$	32.52
Weighted average lease term by square foot (years)	13.8		9.6		10.3
Total TI & LC per rentable square foot per year (3)	$	6.79	$	2.19	$	3.16

(1)	Tenant-funded capital expenditures are excluded.
(2)	Average square feet during each period includes properties held for sale at the end of each period.
(3)	Includes tenant improvements (TI) and leasing commissions (LC).

20

TENANTS REPRESENTING 1.5% OR MORE OF ANNUALIZED RENTAL REVENUE

As of December 31, 2016

(square feet in thousands)

	Tenant	Square Feet	% of Total Sq. Ft. (1)		% of Annualized Rental Revenue		Weighted Average Remaining Lease Term
1	Expedia, Inc.	427	2.9	%	5.3	%	3.0
2	Office Depot, Inc.	640	4.4	%	4.5	%	6.8
3	PNC Financial Services Group	368	2.5	%	3.2	%	4.4
4	Groupon, Inc. (2)	376	2.6	%	3.2	%	9.1
5	Flextronics International Ltd.	1,051	7.2	%	2.9	%	13.0
6	Ballard Spahr LLP	217	1.5	%	2.1	%	13.1
7	RE/MAX Holdings, Inc.	248	1.7	%	2.0	%	11.3
8	University of Pennsylvania Health System	267	1.8	%	1.9	%	8.8
9	Exelon Corporation (3)	183	1.3	%	1.8	%	1.4
10	Towers Watson & Co	251	1.7	%	1.7	%	3.3
11	Georgetown University	240	1.6	%	1.7	%	2.8
12	M&T Bank	211	1.4	%	1.7	%	1.7
13	Echo Global Logistics, Inc.	226	1.5	%	1.6	%	10.8
14	Wm. Wrigley Jr. Company	150	1.0	%	1.5	%	5.1
15	West Corporation	336	2.3	%	1.5	%	12.1
	Total	5,191	35.4	%	36.6	%	8.3

(1)	Square footage is pursuant to existing leases as of December 31, 2016 and includes (i) space being fitted out for occupancy and (ii) space which is leased but is not occupied or is being offered for sublease.
(2)	Groupon, Inc. statistics include 207,536 square feet that are sublet from Bankers Life and Casualty Company.
(3)	Exelon Corporation is a tenant at 111 Market Place, which was sold on January 31, 2017.

21

SAME PROPERTY LEASE EXPIRATION SCHEDULE

As of December 31, 2016

(dollars and sq. ft. in thousands)

Total Properties
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		% of Annualized Rental Revenue Expiring		Cumulative % of Annualized Rental Revenue Expiring
2017	82	874	6.0	%	6.0	%	$	23,534	6.3	%	6.3	%
2018	83	973	6.6	%	12.6	%	27,088		7.2	%	13.5	%
2019	90	1,302	8.9	%	21.5	%	32,861		8.8	%	22.3	%
2020	82	2,250	15.4	%	36.9	%	52,829		14.1	%	36.4	%
2021	73	1,640	11.2	%	48.1	%	46,641		12.5	%	48.9	%
2022	38	755	5.2	%	53.3	%	26,735		7.1	%	56.0	%
2023	48	1,629	11.1	%	64.4	%	47,795		12.8	%	68.8	%
2024	19	304	2.1	%	66.5	%	9,753		2.6	%	71.4	%
2025	18	741	5.1	%	71.6	%	20,105		5.4	%	76.8	%
2026	13	677	4.6	%	76.2	%	22,272		5.9	%	82.7	%
Thereafter	62	3,487	23.8	%	100.0	%	64,937		17.3	%	100.0	%
Total	608	14,632	100.0	%			$	374,550	100.0	%
Weighted average remaining
lease term (in years)		6.5					6.0

(1) Square footage is pursuant to existing leases as of December 31, 2016 and includes (i) space being fitted out for occupancy and (ii) space which is leased but is not occupied or is being offered for sublease.

22

PROPERTY DETAIL ⁽¹⁾ 

As of December 31, 2016

(sorted by geographic location, dollars in thousands)

Office Properties

	Property	City and State		No. of Bldgs.	Sq. Feet	% Leased		Annualized Rental Revenue		Undepreciated Book Value		Net Book Value		Year Acquired	Weighted Average Year Built or Substantially Renovated (2)
1	Parkshore Plaza	Folsom	CA	4	271,072	68.0	%	$	4,190	$	45,439	$	38,744	2011	1999
2	1225 Seventeenth Street	Denver	CO	1	672,443	90.5	%	23,822		156,803		130,813		2009	1982
3	5073, 5075, & 5085 S. Syracuse Street	Denver	CO	1	248,493	100.0	%	7,379		63,610		53,795		2010	2007
4	1601 Dry Creek Drive	Longmont	CO	1	552,865	97.0	%	8,865		34,550		24,538		2004	1982
5	1250 H Street, NW	Washington	DC	1	196,489	94.2	%	8,016		72,608		44,224		1998	1992
6	Georgetown-Green and Harris Buildings	Washington	DC	2	240,475	100.0	%	6,514		60,023		53,423		2009	2006
7	802 Delaware Avenue	Wilmington	DE	1	240,780	100.0	%	4,280		43,496		19,279		1998	1986
8	6600 North Military Trail	Boca Raton	FL	3	639,825	100.0	%	16,990		145,808		126,337		2011	2008
9	600 West Chicago Avenue	Chicago	IL	2	1,511,887	98.6	%	49,406		395,444		349,605		2011	2001
10	8750 Bryn Mawr Avenue	Chicago	IL	2	637,230	95.8	%	16,164		93,605		79,194		2010	2005
11	109 Brookline Avenue	Boston	MA	1	285,556	99.7	%	10,826		47,536		27,340		1995	1915
12	111 Market Place (3)	Baltimore	MD	1	589,380	95.4	%	12,583		71,555		44,199		2003	1990
13	25 S. Charles Street	Baltimore	MD	1	359,254	94.2	%	8,717		38,504		24,864		2004	1972
14	820 W. Diamond	Gaithersburg	MD	1	134,933	88.7	%	2,948		33,660		20,883		1997	1995
15	Danac Stiles Business Park	Rockville	MD	3	276,637	86.1	%	7,078		65,718		44,799		2004	2002
16	East Eisenhower Parkway	Ann Arbor	MI	2	421,349	92.4	%	10,569		56,376		48,187		2010	2006
17	4700 Belleview Avenue	Kansas City	MO	1	80,615	69.0	%	1,064		7,225		5,939		2008	1986
18	Cherrington Corporate Center	Moon Township	PA	7	454,700	61.4	%	6,019		71,964		49,470		1998; 1999	1997
19	1500 Market Street	Philadelphia	PA	1	1,759,193	92.4	%	39,245		304,546		215,829		2002	1974
20	1600 Market Street	Philadelphia	PA	1	826,789	86.8	%	20,744		135,851		76,416		1998	1983
21	1735 Market Street	Philadelphia	PA	1	1,290,678	74.4	%	27,106		302,533		184,128		1998	1990
22	Foster Plaza	Pittsburgh	PA	8	727,365	83.4	%	11,869		76,256		54,703		2005	1993
23	206 East 9th Street	Austin	TX	1	175,510	94.0	%	6,356		49,197		44,318		2012	1984
24	4515 Seton Center Parkway	Austin	TX	1	117,265	98.9	%	3,650		23,130		13,381		1999	1996
25	4516 Seton Center Parkway	Austin	TX	1	120,559	92.3	%	2,645		24,257		13,760		1999	1998
26	Bridgepoint Square	Austin	TX	5	440,007	92.8	%	12,385		91,332		51,624		1997	1995
27	Research Park	Austin	TX	4	1,110,007	98.0	%	11,709		93,444		61,149		1998	1976
28	333 108th Avenue NE	Bellevue	WA	1	440,565	100.0	%	20,455		153,219		127,431		2009	2008
29	600 108th Avenue NE	Bellevue	WA	1	256,830	97.4	%	7,725		50,596		37,138		2004	2016
Subtotal Office Properties				60	15,078,751	91.1	%	$	369,319	$	2,808,285	$	2,065,510	2004	1990
Industrial/Flex Properties & Land
30	97 Newberry Road	East Windsor	CT	1	289,386	100.0	%	$	1,816	$	15,350	$	12,175	2006	1989
31	33 Stiles Lane	North Haven	CT	1	175,301	52.0	%	639		9,793		7,440		2006	2002
32	2250 Pilot Knob Road	Mendota Heights	MN	1	87,183	100.0	%	867		6,530		3,634		1998	1995
33	411 Farwell Avenue	South St. Paul	MN	1	422,727	100.0	%	1,909		16,357		12,301		2004	1970
Subtotal Industrial/Flex				4	974,597	91.4	%	$	5,231	$	48,030	$	35,550	2004	1984
	625 Crane Street	Aurora	IL	—	—	—	%	$	—	$	—	$	—	2007	—
	Cabot Business Park Land	Mansfield	MA	—	—	—	%	—		575		575		2003	—
Subtotal Land				—	—	—	%	$	—	$	575	$	575	2005	—
Total Portfolio				64	16,053,348	91.1	%	$	374,550	$	2,856,890	$	2,101,635	2004	1990

(1	)	Excludes properties disposed prior to January 1, 2017.
(2	)	Weighted based on square feet.
(3	)	On January 31, 2017, we sold 111 Market Place for $60.1 million.

23

DISPOSED PROPERTY DETAIL ⁽¹⁾ 

(dollars in thousands)

	Property	City and State/Country		No. of Bldgs.	Sq. Feet	% Leased		Annualized Rental Revenue		Undepreciated Book Value		Net Book Value		Year Acquired (2)	Weighted Average Year Built or Substantially Renovated (2)
1	Executive Park	Atlanta	GA	9	427,443	72.8	%	$	4,990	$	44,224	$	29,365	2004; 2007	1972
2	3330 N Washington Boulevard	Arlington	VA	1	55,719	15.3	%	273		8,823		5,519		1998	1987
3	111 East Kilbourn Avenue	Milwaukee	WI	1	373,669	81.1	%	8,169		55,105		44,577		2008	1988
	Q1 2016 Dispositions			11	856,831	72.7	%	$	13,432	$	108,152	$	79,461	2006	1980
4	633 Ahua Street	Honolulu	HI	1	93,141	81.5	%	$	1,808	$	16,401	$	12,545	2003	2006
5	1525 Locust Street	Philadelphia	PA	1	98,009	95.4	%	2,337		11,208		7,024		1999	1987
6	Lakewood on the Park	Austin	TX	2	180,558	84.1	%	3,516		36,872		22,371		1998	1998
7	812 San Antonio Street	Austin	TX	1	59,321	90.1	%	1,662		8,684		5,587		1999	1987
8	1601 Rio Grande Street	Austin	TX	1	56,219	89.6	%	1,432		8,302		5,248		1999	1985
	Subtotal Downtown Austin Portfolio			2	115,540	89.9	%	3,094		16,986		10,835		1999	1986
9	Leased Land	Gonzalez	CA	7	—	—	%	2,965		31,968		28,957		2010	—
10	9110 East Nichols Avenue	Centennial	CO	1	143,958	99.8	%	2,433		20,326		13,711		2001	1984
11	785 Schilinger Road South	Mobile	AL	1	72,000	100.0	%	1,318		11,269		9,218		2007	1998
12	401 Vine Street	Delmont	PA	1	53,980	100.0	%	—		7,117		5,952		2007	1999
13	633 Frazier Drive	Franklin	TN	1	150,000	100.0	%	2,402		18,980		16,187		2007	1999
14	9840 Gateway Boulevard North	El Paso	TX	1	72,000	100.0	%	1,163		11,432		9,376		2007	1999
15	3003 South Expressway 281	Hidalgo	TX	1	150,000	100.0	%	2,015		17,004		13,714		2007	1999
16	1331 North Center Parkway	Kennewick	WA	1	53,980	100.0	%	853		9,187		7,635		2007	1999
	Subtotal Movie Theaters			6	551,960	100.0	%	7,751		74,989		62,082		2007	1999
	Q2 2016 Dispositions			20	1,183,166	94.7	%	$	23,904	$	208,750	$	157,525	2003	1995
17	111 River Street (3)	Hoboken	NJ	1	566,215	100.0	%	$	23,440	$	138,241	$	115,428	2009	2002
18	128 Crews Drive	Columbia	SC	1	185,600	100.0	%	639		3,747		3,205		2007	2011
19	111 Southchase Boulevard	Fountain Inn	SC	1	168,087	100.0	%	829		6,164		4,564		2007	1987
20	1043 Global Avenue	Graniteville	SC	1	450,000	100.0	%	1,484		16,886		13,102		2007	1998
	Subtotal South Carolina Portfolio			3	803,687	100.0	%	2,952		26,797		20,871		2007	1999
21	Sky Park Centre	San Diego	CA	2	63,485	100.0	%	1,429		9,833		6,385		2002	1986
22	Raintree Industrial Park	Solon	OH	12	563,182	81.2	%	2,066		12,318		11,259		2004	1975
23	8701 N Mopac	Austin	TX	1	121,901	79.1	%	2,290		18,814		11,907		1999	1982
24	101-115 W. Washington Street	Indianapolis	IN	1	634,058	93.9	%	13,221		76,529		51,082		2005	1977
25	111 Monument Circle	Indianapolis	IN	2	1,121,764	86.6	%	19,066		150,354		134,916		2012	1990
26	North Point Office Complex	Cleveland	OH	2	873,335	80.0	%	15,616		125,128		100,912		2008	1988
27	100 East Wisconsin Avenue	Milwaukee	WI	1	435,067	88.2	%	11,084		81,056		68,215		2010	1989
	Subtotal Midwest Portfolio			6	3,064,224	86.5	%	58,987		433,067		355,125		2009	1987
	Q3 2016 Dispositions			25	5,182,694	89.5	%	$	91,164	$	639,070	$	520,975	2008	1989
28	7800 Shoal Creek Boulevard	Austin	TX	4	151,917	99.7	%	$	3,699	$	21,272	$	12,952	1999	1974
29	1200 Lakeside Drive	Bannockburn	IL	1	260,084	100.0	%	4,537		70,408		56,207		2005	1999
30	6200 Glenn Carlson Drive	St. Cloud	MN	1	338,000	100.0	%	2,196		15,753		13,337		2009	2013
	Q4 2016 Dispositions			6	750,001	99.9	%	$	10,432	$	107,433	$	82,496	2006	2000
Total Disposed Year-to-Date				62	7,972,692	89.4	%	$	138,932	$	1,063,405	$	840,457	2007	1990

(1	)	Statistics for disposed properties are presented as of or for the quarter-ended preceding each sale.
(2	)	Weighted based on square feet.
(3	)	Property sale represented a leasehold interest.

24

COMMON & POTENTIAL COMMON SHARES

(share amounts in thousands)

	Three Months Ended		Year Ended
	December 31,		December 31,
Weighted Average Share Calculation	2016	2015	2016	2015
Weighted average EQC common shares outstanding	124,136	125,574	124,578	127,828
Weighted average restricted shares outstanding	885	776	896	793
Weighted average common shares outstanding - basic - GAAP EPS, FFO, Normalized FFO	125,021	126,350	125,474	128,621
Weighted average number of dilutive RSUs(1)	1,027	1,143	1,294	816
Weighted average common shares outstanding - diluted - GAAP EPS, FFO & Normalized FFO	126,048	127,493	126,768	129,437

Rollforward of Share Count to December 31, 2016	Series D Preferred Shares(2)	Series E Preferred Shares(3)		EQC Common Shares(4)
Outstanding on December 31, 2015	4,915	11,000		126,350
Issuance of restricted shares, net of forfeitures	—	—		136
Repurchase of common shares	—	—		(2,492	)
Redemption of Series E preferred shares	—	(11,000	)	—
Outstanding on December 31, 2016	4,915	—		123,994
Series D preferred shares convertible into common shares on December 31, 2016(2)				2,363
Common shares issuable from RSUs as measured on December 31, 2016(1)				1,027
Potential common shares as measured on December 31, 2016				127,384

(1	)	As of December 31, 2016, we had granted RSUs to certain employees, officers, and the Chairman of the Board of Trustees.  The RSUs are equity awards that contain both service and market-based vesting components.  None of the RSUs have vested. If the market-based vesting component was measured as of December 31, 2016, and 2015, 1,027 and 1,143 common shares would be issued to the RSU holders, respectively. Using a weighted average basis, 1,027 and 1,143 common shares are reflected in diluted earnings per common share, diluted FFO per common share, and diluted Normalized FFO per common share for the three months ended December 31, 2016 and 2015, respectively, and 1,294 and 816 common shares are reflected in these measures for the year ended December 31, 2016 and 2015 respectively.
(2	)	As of December 31, 2016, we had 4,915 series D preferred shares outstanding that were convertible into 2,363 of our common shares. The series D preferred shares are anti-dilutive for GAAP EPS, FFO per common share and Normalized FFO per common share for all periods presented.
(3	)	On May 15, 2016, we redeemed all of our 11,000,000 outstanding series E preferred shares at a price of $25.00 per share, plus any accrued and unpaid dividends. The redemption payment occurred on May 16, 2016 (the first business day following the redemption date).
(4	)	EQC common shares include unvested restricted shares.

25

DEFINITIONS

Annualized Rental Revenue

Annualized Rental Revenue is annualized contractual rents from our tenants pursuant to leases which have commenced as of December 31, 2016, plus estimated recurring expense reimbursements; includes triple net lease rents and 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.

Consolidated Income Available for Debt Service

Consolidated income available for debt service is earnings from operations excluding interest expense, depreciation and amortization, taxes, and certain items that we view as nonrecurring or impacting comparability from period to period, determined together with debt service on a pro forma basis for the four consecutive fiscal quarters most recently ended.

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

We calculate EBITDA as net income (loss) excluding 1) interest expense, 2) income tax expense, and 3) depreciation and amortization. Our calculation of Adjusted EBITDA differs from our calculation of EBITDA because we exclude certain items that we view as nonrecurring or impacting comparability from period to period. EBITDA and Adjusted EBITDA are supplemental non-GAAP financial measures.

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

Annualized Adjusted EBITDA

Annualized Adjusted EBITDA is Adjusted EBITDA for the three months ended December 31, 2016 multiplied by four.

Enterprise Value

Enterprise value is net debt plus the market value of our preferred shares plus the market value of our common shares.

Funds from Operations (FFO) Attributable to EQC Common Shareholders and Normalized FFO Attributable to EQC Common Shareholders

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (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, net income attributable to Equity Commonwealth common shareholders, operating income 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, net income attributable to Equity Commonwealth common shareholders, operating income 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

26

DEFINITIONS

flow to fund all of our needs.  These measures should be considered in conjunction with net income, net income attributable to Equity Commonwealth common shareholders, operating income 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 are primarily costs such as leasing commissions ("LC"'s) and related legal expenses.

Net Debt

Net debt is total debt minus cash and cash equivalents.

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, 2015 through December 31, 2016. The year-to-date same property versions of these measures include the results of properties continuously owned from January 1, 2015 through December 31, 2016. Land parcels and 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 because they 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, net income attributable to Equity Commonwealth common shareholders, operating income 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, net income attributable to Equity Commonwealth common shareholders, operating income 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, impairment write-downs, and currency adjustments, 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).

Percentage Leased

Percentage leased includes: 1) space being fitted out for occupancy pursuant to existing leases and 2) space which is leased but not occupied or is being offered for sublease by tenants.

Same Properties

Our quarter-to-date same property portfolio is comprised of those properties continuously owned from October 1, 2015 through December 31, 2016. Our year-to-date same property portfolio is comprised of those properties continuously owned from January 1, 2015 through December 31, 2016. Land parcels and 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.

Total Debt

Total debt is the aggregate balance of the following line items on our condensed consolidated balance sheets: revolving credit facility, senior unsecured debt, net, and mortgage notes payable, net.

Undepreciated Book Value

27

DEFINITIONS

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

28