Equity Commonwealth(EQC) - 2025 Q4 - Annual Report

Part I Item 1. Business EQC, a former REIT, dissolved on June 13, 2025, transferring assets to EQC Liquidating Trust, which subsequently dissolved on September 30, 2025, after liquidating assets and donating remaining funds - EQC, a Maryland REIT, and its Operating Trust dissolved on June 13, 202515 - EQC completed over $7.6 billion in dispositions from 2014 to 2020, leading to a Board decision on July 30, 2024, to liquidate assets18 19 - EQC Liquidating Trust (EQC LT) was formed on June 13, 2025, to liquidate EQC's affairs and dissolved on September 30, 2025, after donating remaining $150,000 to charities21 22 24 - As of September 30, 2025, the Liquidating Trust owned no properties and had no employees, having disposed of 168 properties and three land parcels totaling 45.8 million square feet for $7.2 billion since 201427 28 Item 1A. Risk Factors No applicable risk factors are believed to exist due to the dissolution of EQC Liquidating Trust on September 30, 2025 - No applicable risk factors are believed to exist due to EQC LT's dissolution on September 30, 202530 Item 1B. Unresolved Staff Comments There are no unresolved staff comments - No unresolved staff comments31 Item 1C. Cybersecurity EQC and EQC LT maintained a cybersecurity program with prevention, identification, and mitigation measures, overseen by the Audit Committee and Trustees, with no material impact from threats - EQC and EQC LT maintained a cybersecurity program including reputable hardware/software, periodic testing, third-party penetration testing, vendor verification, and employee training32 33 34 - Processes for cyber incident assessment and response integrated third-party digital forensics, legal providers, and law enforcement35 - No material effects from cybersecurity threats were believed to have impacted the Company's business strategy, operations, or financial condition37 - The cybersecurity program was managed by the IT department, overseen by EQC's Audit Committee and EQC LT's Trustees38 40 Item 2. Properties As of September 30, 2025, the registrant did not own any properties - As of September 30, 2025, the company did not own any properties41 Item 3. Legal Proceedings The registrant was not involved in any material litigation, nor was any threatened, that would have a material adverse effect - No material litigation was ongoing or threatened against the company42 Item 4. Mine Safety Disclosures Mine Safety Disclosures are not applicable to the registrant - Mine Safety Disclosures are not applicable43 Part II Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Equity Commonwealth's common shares ceased trading on the NYSE on April 21, 2025, with significant liquidating distributions totaling $2.17 billion to common shareholders and $123.3 million to preferred shareholders - Equity Commonwealth's common shares ceased trading on the NYSE on April 21, 2025, and Liquidating Trust units were not transferable or publicly traded45 46 Common Share and Unit Distributions | Distribution Type | Date Announced | Payment Date | Amount Per Share | Aggregate Amount (Millions) | | :---------------- | :------------- | :----------- | :--------------- | :----------------------- | | Initial Liquidating Cash | Nov 15, 2024 | Dec 6, 2024 | $19.00 | $2,000.0 | | Final Liquidating Cash | Apr 1, 2025 | Apr 22, 2025 | $1.60 | $172.4 | | Catch-up Cash (2022/2021 awards) | Feb 2025 | Feb 2025 | N/A | $12.5 | | Catch-up Cash (2023/2024 awards) | Mar 2025 | Mar 2025 | N/A | $17.5 | - A payment of $123.3 million was made to Series D Preferred Shareholders on December 3, 2024, covering liquidation preference and accrued dividends52 - A $150.0 million share repurchase program authorized in June 2024 expired on June 30, 2025, without any common shares repurchased53 Item 6. [Reserved] This item is reserved and not applicable - Item 6 is reserved and not applicable55 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses EQC's financial condition, operations, liquidity, and cash flows for the year ended September 30, 2025, highlighting the shift to liquidation basis accounting and the completion of its wind-down - EQC's Board decided on July 30, 2024, to liquidate assets, a decision approved by shareholders on November 12, 202460 61 - As of September 30, 2025, the company had no remaining assets or debt, having completed its liquidation and dissolved the Liquidating Trust63 66 - The company adopted liquidation basis accounting as of November 1, 2024, adjusting assets to estimated net realizable value and making current year results incomparable to prior periods65 75 Cash Flows (Ten Months Ended October 31, 2024) | Activity | Net Cash Flow (Millions) | | :----------------------- | :----------------------- | | Operating Activities | $99.1 | | Investing Activities | $13.9 | | Financing Activities | $(11.1) | Item 7A. Quantitative and Qualitative Disclosures About Market Risk The registrant does not believe it had any significant exposure to market risks from interest rate changes - No significant exposure to market risks from interest rate changes80 Item 8. Financial Statements and Supplementary Data Financial statements and supplementary data are included in Item 15 of this Annual Report on Form 10-K - Financial statements and supplementary data are located in Item 1581 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There were no changes in or disagreements with accountants on accounting and financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure82 Item 9A. Controls and Procedures The registrant's disclosure controls and procedures were effective as of September 30, 2025, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were effective as of September 30, 202583 - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 202584 - Management assessed internal control over financial reporting as effective as of September 30, 2025, based on the COSO 2013 framework86 Item 9B. Other Information No Rule 10b5-1 trading arrangements were adopted or terminated, and unaudited pro forma financial statements are presented, adjusted for the sale of 1225 Seventeenth Street - No Rule 10b5-1 trading arrangements were adopted or terminated by trustees or officers during the three months ended September 30, 202587 - The company sold 1225 Seventeenth Street for a gross sale price of $132.5 million, with net proceeds of $124.4 million, closing on February 25, 202589 Pro Forma Consolidated Statement of Net Assets (December 31, 2024, in thousands) | Item | Historical ($) | Transaction Adjustment ($) | Pro Forma ($) | | :---------------------------------------------------- | :--------- | :--------------------- | :-------- | | Real estate | $132,500 | $(132,500) | $— | | Cash and cash equivalents | $160,511 | $123,592 | $284,103 | | Total assets | $293,624 | $(8,908) | $284,716 | | Liabilities for estimated costs in excess of estimated receipts during liquidation | $100,019 | $(6,028) | $93,991 | | Total liabilities | $114,769 | $(6,028) | $108,741 | | Net assets in liquidation attributable to Equity Commonwealth common shareholders | $178,605 | $(2,876) | $175,729 | | Net assets in liquidation | $178,855 | $(2,880) | $175,975 | Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the registrant - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable99 Part III Item 10. Directors, Executive Officers and Corporate Governance This section lists EQC and EQC LT trustees and executive officers, detailing EQC LT's governance structure, including the adoption of EQC's Code of Business Conduct and Ethics Trustees of EQC Liquidating Trust (as of September 30, 2025) | Name | Position With the Company | Age as of September 30, 2025 | | :---------------- | :------------------------ | :--------------------------- | | David A. Helfand | Trustee | 61 | | Peter Linneman | Trustee | 74 | | William H. (Bill) Griffiths | Trustee | 52 | | David S. Weinberg | Trustee | 57 | | Orrin S. Shifrin | Trustee | 58 | - The five trustees of EQC LT were EQC's four named executive officers and the Lead Independent Trustee, overseeing EQC LT affairs106 - EQC LT did not have a separate audit committee, but Peter Linneman qualified as an audit committee financial expert115 - EQC LT adopted EQC's Code of Business Conduct and Ethics to the extent applicable116 Item 11. Executive Compensation This section details executive compensation for EQC's named executive officers and EQC LT trustees for fiscal year 2025, including base salaries, bonuses, and accelerated vesting of equity awards due to a change in control Summary Compensation Table for 2025 Fiscal Year | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) | | :-------------------------------------------------------- | :--- | :---------- | :---------- | :--------------- | :------------------------- | :----------- | | David A. Helfand Chair of the Board, President and Chief Executive Officer | 2025 | 1,017,640 | 5,838,049 | — | 13,299,371 | 20,155,060 | | | 2024 | 988,000 | 2,156,969 | 4,485,138 | 8,000 | 7,638,107 | | William H. (Bill) Griffiths Executive Vice President, Chief Financial Officer and Treasurer | 2025 | 642,720 | 1,740,198 | — | 5,532,298 | 7,915,216 | | | 2024 | 624,000 | 908,198 | 1,013,730 | 8,000 | 2,553,928 | | David S. Weinberg Executive Vice President and Chief Operating Officer | 2025 | 724,064 | 2,841,381 | — | 7,130,356 | 10,695,801 | | | 2024 | 702,975 | 1,023,142 | 2,215,396 | 8,000 | 3,949,513 | | Orrin S. Shifrin Executive Vice President, General Counsel and Secretary | 2025 | 637,177 | 2,009,670 | — | 5,778,246 | 8,425,093 | | | 2024 | 618,618 | 900,364 | 1,351,615 | 8,000 | 2,878,597 | - Annual base salaries for named executive officers increased by 3% for fiscal year 2025121 - All outstanding unvested equity awards vested on an accelerated basis on February 25, 2025, due to a change in control from asset sales129 132 133 - Named executive officers received severance benefits and prorated bonus payments upon qualifying termination of employment in September 2025134 135 138 Trustee Compensation Table for Fiscal Year 2025 | Name | Company Fees Earned or Paid in Cash ($) | Liquidating Trust Fees Earned or Paid in Cash ($) | Equity Awards ($) | All Other Compensation ($) | Total ($) | | :---------------- | :-------------------------------------- | :------------------------------------------------ | :---------------- | :------------------------- | :-------- | | Ellen-Blair Chube | 55,000 | — | — | — | 55,000 | | Martin Edelman | 48,750 | — | — | — | 48,750 | | Peter Linneman | 77,500 | 127,500 | — | — | 205,000 | | Mary Jane Robertson | 47,500 | — | — | — | 47,500 | | Gerald Spector | 43,125 | — | — | — | 43,125 | | James Star | 46,250 | — | — | — | 46,250 | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters The Liquidating Trust did not have any equity compensation plans or voting securities - The Liquidating Trust did not have any equity compensation plans or voting securities145 Item 13. Certain Relationships and Related Transactions, and Director Independence EQC LT adopted EQC's policies for related person transactions, including a corporate headquarters lease with an EGI-associated entity that terminated on September 30, 2025, and details indemnification provisions for trustees and officers - EQC LT adopted EQC's Code of Business Conduct and Ethics and other policies for reviewing related person transactions146 147 - The company leased office space at Two North Riverside Plaza, owned by an EGI-associated entity, with the lease terminating early on September 30, 2025, with a termination fee148 150 151 - Indemnification provisions for trustees and officers are consistent with Maryland REIT law, Maryland General Corporation Law, and the EQC LT Liquidating Trust Agreement152 153 157 Item 14. Principal Accountant Fees and Services Ernst & Young LLP served as the independent registered public accounting firm for 2025 and 2024, with all audit and non-audit services pre-approved by the Audit Committee - Ernst & Young LLP served as the independent registered public accounting firm for 2025 and 2024158 Principal Accountant Fees and Services | Category | 2025 ($) | 2024 ($) | | :---------------- | :-------- | :---------- | | Audit fees | 301,500 | 1,052,135 | | Audit related fees| — | — | | Tax fees | — | — | | Subtotal | 301,500 | 1,052,135 | | All other fees* | — | 3,600 | | Total fees | 301,500 | 1,055,735 | - The Audit Committee had pre-approval policies for audit and non-audit services, and all services provided by Ernst & Young LLP in 2025 and 2024 were approved159 161 Part IV Item 15. Exhibits and Financial Statement Schedules This section lists consolidated financial statements, schedules, and exhibits, including the Liquidating Trust Agreement and Change in Control Agreements - The report includes Consolidated Statements of Net Assets, Changes in Net Assets, Operations, Equity, Cash Flows, and related notes163 - Key exhibits filed include the Liquidating Trust Agreement, Change in Control Agreements, and various certifications164 Item 16. Form 10-K Summary This item is not applicable - Form 10-K Summary is not applicable165 Signatures Signatures The Annual Report on Form 10-K was signed by David A. Helfand as Trustee and by all five Trustees of EQC Liquidating Trust on October 21, 2025 - The report was signed by David A. Helfand as Trustee on October 21, 2025168 - All five Trustees of EQC Liquidating Trust signed the report on October 21, 2025169 Financial Statements Report of Independent Registered Public Accounting Firm Ernst & Young LLP issued an unqualified opinion on EQC Liquidating Trust's consolidated financial statements, noting the adoption of liquidation basis accounting and no critical audit matters - Ernst & Young LLP provided an unqualified opinion on the consolidated financial statements171 - The company changed its accounting basis from going-concern to liquidation for periods subsequent to October 31, 2024, following shareholder approval on November 12, 2024172 - No critical audit matters were identified176 Consolidated Statements of Net Assets (Liquidation Basis) The Consolidated Statements of Net Assets (Liquidation Basis) show EQC Liquidating Trust had no assets or liabilities as of September 30, 2025, contrasting with $132.5 million in real estate and $160.5 million in cash as of December 31, 2024 Consolidated Statements of Net Assets (Liquidation Basis, amounts in thousands) | Item | September 30, 2025 ($) | December 31, 2024 ($) | | :------------------------------------------------------------------ | :--------------------- | :-------------------- | | ASSETS | | | | Real estate | — | 132,500 | | Cash and cash equivalents | — | 160,511 | | Rents receivable and other assets | — | 613 | | Total assets | — | 293,624 | | LIABILITIES | | | | Liabilities for estimated costs in excess of estimated receipts during liquidation | — | 100,019 | | Accounts payable and accrued expenses | — | 10,908 | | Distributions payable | — | 3,842 | | Total liabilities | — | 114,769 | | Net assets in liquidation attributable to Equity Commonwealth common shareholders | — | 178,605 | | Net assets in liquidation attributable to noncontrolling interest | — | 250 | | Net assets in liquidation | — | 178,855 | Consolidated Statements of Changes in Net Assets (Liquidation Basis) The Consolidated Statements of Changes in Net Assets show a significant decrease due to liquidation, with net assets falling from $178.9 million to zero by September 30, 2025, and from $2.245 billion to $178.9 million by December 31, 2024 Consolidated Statements of Changes in Net Assets (Liquidation Basis, amounts in thousands) | Item | Year Ended September 30, 2025 ($) | For the Period from November 1, 2024 to December 31, 2024 ($) | | :---------------------------------------- | :-------------------------------- | :------------------------------------------------------------ | | Net assets in liquidation, beginning of period | 178,855 | 2,245,273 | | Changes in net assets in liquidation: | | |\ | Remeasurement of liabilities, net | (6,369) | (23,764) | | Net decrease in liquidation value | (6,369) | (23,764) | | Liquidating distributions | (172,486) | (2,042,654) |\ | Changes in net assets in liquidation | (178,855) | (2,066,418) | | Net assets in liquidation, end of period | — | 178,855 | Consolidated Statements of Operations (Going Concern Basis) For the ten months ended October 31, 2024, EQC reported $48.0 million in total revenues and $115.3 million in expenses, resulting in $31.7 million net income and $0.22 basic and diluted EPS Consolidated Statements of Operations (Going Concern Basis, Ten Months Ended October 31, 2024, amounts in thousands, except per share data) | Item | Amount ($) | | :---------------------------------------------------------------- | :--------- | | Revenues: | | | Rental revenue | 43,616 | | Other revenue | 4,359 | | Total revenues | 47,975 | | Expenses: | | | Operating expenses | 22,542 | | Depreciation and amortization | 13,384 | | General and administrative | 30,089 | | Loss on asset impairment | 49,250 | | Total expenses | 115,265 | | Interest and other income, net | 98,634 | | Gain on sale of properties, net | 857 | | Income before income taxes | 32,201 | | Income tax expense | (486) | | Net income | 31,715 | | Net income attributable to noncontrolling interest | (63) | | Net income attributable to Equity Commonwealth | 31,652 | | Preferred distributions | (7,988) | | Net income attributable to Equity Commonwealth common shareholders| 23,664 | | Weighted average common shares outstanding — basic | 107,373 | | Weighted average common shares outstanding — diluted | 108,320 | | Earnings per common share attributable to Equity Commonwealth common shareholders: |\ | Basic | 0.22 | | Diluted | 0.22 | Consolidated Statements of Equity (Going Concern Basis) For the ten months ended October 31, 2024, Equity Commonwealth's total equity increased from $2.390 billion to $2.421 billion, driven by $31.7 million net income and $9.1 million share-based compensation Consolidated Statements of Equity (Going Concern Basis, Ten Months Ended October 31, 2024, amounts in thousands, except share data) | Item | Balance at December 31, 2023 ($) | Net income ($) | Share-based compensation ($) | Distributions ($) | Balance at October 31, 2024 ($) | | :---------------------------------------- | :------------------------------- | :------------- | :--------------------------- | :---------------- | :------------------------------ | | Equity Commonwealth Shareholders Total | 2,390,113 | 31,652 | 9,102 | (7,045) | 2,420,829 | | Number of Common Shares | 106,847,438 | — | 564,297 | — | 107,334,031 | | Number of Series D Preferred Shares | 4,915,196 | — | — | — | 4,915,196 | Consolidated Statements of Cash Flows (Going Concern Basis) For the ten months ended October 31, 2024, EQC generated $99.1 million from operations and $13.9 million from investing, with a $11.1 million net cash outflow from financing, increasing cash and cash equivalents by $101.9 million to $2.262 billion Consolidated Statements of Cash Flows (Going Concern Basis, Ten Months Ended October 31, 2024, amounts in thousands) | Cash Flow Activity | Amount ($) | | :----------------------------- | :--------- | | Net cash provided by operating activities | 99,130 | | Net cash provided by investing activities | 13,923 | | Net cash used in financing activities | (11,133) | | Increase in cash and cash equivalents | 101,920 | | Cash and cash equivalents at end of period| 2,262,455 | - Financing activities included $3.056 million for common share repurchase, $2.036 million in common shareholder distributions, and $5.991 million to preferred shareholders191 Notes to Consolidated Financial Statements These notes detail EQC Liquidating Trust's organization, Plan of Sale, accounting policies, dissolution, asset transfers, and specific financial items within the context of the company's wind-down - EQC Liquidating Trust (EQC LT) was formed on June 13, 2025, to liquidate EQC's assets and dissolved on September 30, 2025, after completing its mandate200 202 - The company adopted liquidation basis accounting as of November 1, 2024, adjusting assets to estimated net realizable value and accruing expected costs and revenues through liquidation211 212 - Since 2014, EQC disposed of 168 properties and three land parcels for $7.2 billion, retired $3.4 billion of debt, repurchased $652.1 million of common shares, and paid $4.0 billion in distributions64 - Cumulative cash liquidating distributions to common shareholders totaled $2.2 billion ($20.60 per common share), including $19.00 per share in December 2024 and $1.60 per share in April 2025247 258 Note 1. Organization EQC, a Maryland REIT, dissolved on June 13, 2025, transferring assets to EQC Liquidating Trust, which subsequently dissolved on September 30, 2025 - Equity Commonwealth (EQC), a Maryland REIT, dissolved on June 13, 2025, transferring assets to EQC Liquidating Trust (EQC LT), which dissolved on September 30, 2025196 200 202 - EQC's common shares were delisted from the NYSE on April 21, 2025, following a final cash liquidating distribution of $1.60 per common share198 199 Note 2. Plan of Sale Shareholders approved the Plan of Sale and Dissolution on November 12, 2024, leading to EQC's asset transfer to EQC Liquidating Trust on June 13, 2025, and its subsequent dissolution on September 30, 2025 - Shareholders approved the Plan of Sale and Dissolution on November 12, 2024, authorizing property sales, wind-down, and net proceeds distribution204 206 207 - On June 13, 2025, EQC transferred assets and liabilities to EQC Liquidating Trust, which distributed units and dissolved on September 30, 2025208 Note 3. Summary of Significant Accounting Policies The company adopted liquidation basis accounting as of November 1, 2024, adjusting assets to estimated net realizable value, accruing liquidation costs, and recording a $49.3 million asset impairment loss for the ten months ended October 31, 2024 - The company adopted liquidation basis accounting as of November 1, 2024, adjusting assets to estimated net realizable value and carrying liabilities at contractual or estimated settlement amounts211 - Under liquidation basis, the company accrues estimated costs and revenues through liquidation, classified as a liability for estimated costs in excess of estimated receipts212 233 234 - Real estate properties were adjusted to estimated net realizable value as of November 1, 2024, and are no longer depreciated under liquidation basis219 - For the ten months ended October 31, 2024, a loss on asset impairment of $49.3 million was recorded under the going concern basis227 Note 4. Liabilities for Estimated Costs in Excess of Estimated Receipts During Liquidation This note details liabilities for estimated costs exceeding receipts during liquidation, which are subject to significant variability due to uncertainties in winding down operations - The company estimated costs in excess of estimated receipts during liquidation, which can vary significantly due to uncertainties in discharging liabilities and winding down operations244 Change in Liabilities for Estimated Costs in Excess of Estimated Receipts During Liquidation (Year Ended September 30, 2025, in thousands) | Item | December 31, 2024 ($) | Cash Payments (Receipts) ($) | Remeasurement of Assets and Liabilities ($) | September 30, 2025 ($) | | :---------------------------------------- | :-------------------- | :--------------------------- | :------------------------------------------ | :--------------------- | | Estimated net inflows from real estate | 1,125 | (1,671) | 546 | — | | Estimated inflows from interest income | 3,493 | (4,203) | 710 | — | | Liquidation transaction costs | (41,819) | 42,587 | (768) | — | | General and administrative expenses | (30,993) | 35,687 | (4,694) | — | | Liquidating catch-up distributions on unearned equity awards | (23,764) | 25,664 | (1,900) | — | | Capital expenditures and tenant lease obligations | (8,061) | 8,065 | (4) | — | | Total liabilities for estimated costs in excess of estimated receipts during liquidation | (100,019) | 106,129 | (6,110) | — | Note 5. Net Assets In Liquidation As of December 31, 2024, net assets in liquidation were $178.9 million, with cumulative cash liquidating distributions to common shareholders totaling $2.2 billion ($20.60 per common share) - As of December 31, 2024, net assets in liquidation were $178.9 million, with 107,335,177 common shares outstanding, and cumulative cash liquidating distributions totaled $2.2 billion ($20.60 per common share)247 Note 6. Real Estate Properties This note details real estate property activity, including no acquisitions, $0.1 million in 2025 and $12.3 million in 2024 property improvements, and $224.5 million in gross property dispositions - No acquisitions were made in 2025 or 2024, with property improvements totaling $0.1 million in 2025 and $12.3 million in 2024248 Property Dispositions (amounts in thousands) | Property | Date Sold | Number of Properties | Number of Buildings | Square Footage | Gross Sale Price ($) | | :-------------------- | :------------- | :------------------- | :------------------ | :------------- | :------------------- | | Bridgepoint Square | October 2024 | 1 | 5 | 440,007 | 31,500 | | 206 East 9th Street | November 2024 | 1 | 1 | 175,510 | 33,000 | | 1250 H Street, NW | November 2024 | 1 | 1 | 196,490 | 27,500 | | 1225 Seventeenth Street | February 2025 | 1 | 1 | 709,402 | 132,500 | | Total | | 4 | 8 | 1,521,409 | 224,500 | Rental Revenue (Ten Months Ended October 31, 2024, in thousands) | Item | Amount ($) | | :------------------ | :--------- | | Lease payments | 28,468 | | Variable lease payments | 15,148 | | Rental revenue | 43,616 | Note 7. Shareholders' Equity This note details shareholder equity changes, including no common share repurchases, $2.0 billion in liquidating distributions, accelerated equity award vesting, and a $123.3 million preferred shareholder payment - No common shares were repurchased in 2025 or 2024 under the $150.0 million share repurchase program, which expired on June 30, 2025253 254 - Common shareholders received aggregate cash liquidating distributions of $2.0 billion ($19.00 per share) in December 2024 and $172.4 million ($1.60 per share) in April 2025, totaling $20.60 per common share256 258 - A change in control on February 25, 2025, triggered accelerated vesting of all unvested equity awards and one-time catch-up cash distributions totaling $17.5 million for 2023/2024 awards and $12.5 million for 2021/2022 awards259 260 - Series D Preferred Shareholders received a $123.3 million liquidation preference payment on December 3, 2024, after which their shares had no further claim to assets262 263 Note 8. Noncontrolling Interest Noncontrolling interest represented OP Units, classified as permanent equity, which were distributed as units of beneficial interests by EQC LT on June 13, 2025, leading to the cancellation of all outstanding EQC common shares and OP Units - Noncontrolling interest represented OP Units not beneficially owned by the Company, classified as permanent equity due to similar economic characteristics and redemption rights267 - On June 13, 2025, EQC LT distributed units of beneficial interests to common shareholders and OP Unitholders, and all outstanding EQC common shares and OP Units were cancelled268 Changes in Common Shares and Units (January 1, 2025, to June 13, 2025) | Item | Common Shares | OP Units and LTIP Units | Total | | :---------------------------------------- | :------------ | :---------------------- | :-------- | | Outstanding at January 1, 2025 | 107,335,177 | 148,103 | 107,483,280 |\ | Repurchase and surrender of shares | (510,000) | — | (510,000) | | OP Unit redemption | 52,549 | (52,549) | — | | Share-based compensation grants and vesting, net of forfeitures | 873,406 | 59,024 | 932,430 | | Outstanding at June 13, 2025 | 107,751,132 | 154,578 | 107,905,710 |\ | Noncontrolling ownership interest in the Operating Trust | | | 0.14 % | Note 9. Income Taxes Prior to its dissolution on June 13, 2025, EQC qualified as a REIT, and EQC LT, as a grantor trust, is not an income tax payer; a $29 million federal NOL carryforward at December 31, 2024, was not utilized - Prior to its dissolution on June 13, 2025, EQC qualified as a REIT, and EQC LT, as a grantor trust, is not an income tax payer271 272 Income Tax Provision (Ten Months Ended October 31, 2024, in thousands) | Item | Amount ($) | | :---------------- | :--------- | | Current: | | | State and local | (486) | | Income tax (expense) | (486) | - At December 31, 2024, the company had a federal net operating loss (NOL) carryforward of $29 million, which was not used prior to the REIT's dissolution273 Note 10. Share-Based Compensation The Equity Commonwealth 2015 Omnibus Incentive Plan terminated on March 18, 2025, with a change in control on February 25, 2025, accelerating vesting of all equity awards, resulting in $9.1 million compensation expense - The Equity Commonwealth 2015 Omnibus Incentive Plan, allowing for various awards, terminated on March 18, 2025274 276 278 - A change in control on February 25, 2025, resulted in accelerated vesting of all outstanding unvested equity awards, leaving no outstanding awards at fiscal year-end282 283 290 - In December 2024, the company terminated its Form S-8 Registration Statements, leading to cash-based settlements for performance-based awards in January 2025286 - During the ten months ended October 31, 2024, $9.1 million of compensation expense was recorded for equity plans, including $0.4 million from accelerated vesting due to staffing reductions293 Note 11. Fair Value of Assets and Liabilities Properties held for sale incurred $49.3 million in impairment charges for the ten months ended October 31, 2024, reducing their carrying value, while financial instrument fair values were not materially different from carrying values at December 31, 2024 - Properties held for sale resulted in impairment charges of $49.3 million for the ten months ended October 31, 2024, reducing their carrying value from $136.9 million to $87.6 million294 - The fair value of financial instruments at December 31, 2024, was not materially different from their carrying values295 Note 12. Earnings Per Common Share For the ten months ended October 31, 2024, basic and diluted earnings per common share were $0.22, with anti-dilutive securities excluded from diluted EPS calculation Earnings Per Common Share (Ten Months Ended October 31, 2024, amounts in thousands except per share amounts) | Item | Amount ($) | | :---------------------------------------------------------------- | :--------- | | Numerator for net income per share - basic | 23,664 | | Numerator for net income per share - diluted | 23,664 | | Weighted average number of common shares outstanding - basic | 107,373 | | Weighted average number of common shares outstanding - diluted | 108,320 | | Net income per common share attributable to Equity Commonwealth common shareholders: |\ | Basic | 0.22 | | Diluted | 0.22 | - Anti-dilutive securities, including Series D preferred shares and certain OP/LTIP Units, were excluded from diluted EPS calculation298 Note 13. Segment Information The company had one reportable segment, ownership and operation of office properties, which generated 100% of revenues for the ten months ended October 31, 2024 - The company had one reportable segment: ownership and operation of office properties, which generated 100% of revenues for the ten months ended October 31, 2024301 Note 14. Related Person Transactions The company leased office space from an EGI-associated entity, recognizing $0.3 million in expenses for the ten months ended October 31, 2024, with the lease terminating early on September 30, 2025 - The company leased office space at Two North Riverside Plaza, owned by an EGI-associated entity, recognizing $0.3 million in expenses for this lease during the ten months ended October 31, 2024304 308 - The Two North Office Lease was extended multiple times but terminated early on September 30, 2025, with a termination fee306 307 Note 15. Subsequent Events There were no subsequent events to report - There were no subsequent events to report309 Schedule III—Real Estate and Accumulated Depreciation Schedule III analyzes real estate properties and accumulated depreciation, showing a decrease from $411.9 million at December 31, 2023, to zero by September 30, 2025, due to disposals, impairment, and liquidation adjustments Analysis of Real Estate Properties and Accumulated Depreciation (amounts in thousands) | Item | Real Estate Properties ($) | Accumulated Depreciation ($) | | :---------------------------------------- | :------------------------- | :--------------------------- | | Balance at December 31, 2023 (Going Concern Basis) | 411,887 | 180,535 | | Additions | 12,273 | 7,538 | | Loss on asset impairment | (32,960) | — | | Disposals | (209,861) | (118,255) | | Net liquidation adjustment | (48,839) | (69,818) | | Balance at December 31, 2024 (Liquidation Basis) | 132,500 | — | | Disposals | (132,500) | — | | Balance at September 30, 2025 (Liquidation Basis) | — | — |