Shareholders' Equity

12 Months Ended

Dec. 31, 2021

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Share Issuances:

See Note 10 for information regarding equity issuances related to share-based compensation.

Common Share Repurchases:

On August 24, 2015, our Board of Trustees approved a common share repurchase program. On March 13, 2019, our Board of Trustees authorized the repurchase of up to $150.0 million of our outstanding common shares over the twelve month period following the date of authorization. In March 2020, this share repurchase authorization, of which $129.2 million was not utilized, expired. On March 10, 2020, our Board of Trustees authorized the repurchase of up to an additional $150.0 million of our outstanding common shares over the twelve month period following the date of authorization. In March 2021, this share repurchase authorization, none of which was utilized, expired. On March 1, 2021, our Board of Trustees authorized the repurchase of up to an additional $150.0 million of our outstanding common shares through June 30, 2022, and on December 14, 2021, our Board of Trustees authorized the repurchase of up to an additional $150.0 million of our outstanding common shares through December 31, 2022.

During the year ended December 31, 2021, we repurchased and retired 6,735,810 of our common shares under the 2021 authorizations at a weighted average price of $25.85 per share, for a total investment of $174.1 million. During the year ended December 31, 2020, we repurchased and retired 711,000 of our common shares under the March 2019 authorization at a weighted average price of $29.31 per share, for a total investment of $20.8 million. During the year ended December 31, 2019, we did not repurchase any common shares under our common share repurchase program. The share repurchases in 2020 and 2019 discussed in this paragraph were completed prior to the special, one-time cash distributions in each of those years, which were in the amount of $3.50 and $3.50 per common share/unit paid on October 20, 2020 and October 23, 2019, respectively. As of December 31, 2021, we have $125.9 million of remaining authorization available under our share repurchase program.

During the years ended December 31, 2021, 2020 and 2019, certain of our employees and former employees surrendered 245,560, 184,068 and 168,327 common shares owned by them, respectively, to satisfy their statutory tax withholding obligations in connection with the vesting of such common shares pursuant to our equity compensation plans.

Common Share and Unit Distributions:

On September 16, 2020 our Board of Trustees declared a special, one-time cash distribution of $3.50 per common share/unit to shareholders/unitholders of record on October 1, 2020. On October 20, 2020, we paid this distribution to such shareholders/unitholders in the aggregate amount of $426.7 million. In February 2021, the number of earned awards for recipients of the Company’s restricted stock units granted in 2018 was determined. Pursuant to the terms of such awards, we paid a one-time catch-up cash distribution to these recipients in the aggregate amount of $6.0 million for distributions to common shareholders and unitholders declared by our Board of Trustees during such awards' performance measurement period.

On September 24, 2019, our Board of Trustees declared a special, one-time cash distribution of $3.50 per common share/unit to shareholders/unitholders of record on October 7, 2019. On October 23, 2019, we paid this distribution to such shareholders/unitholders in the aggregate amount of $427.7 million. In February 2020, the number of earned awards for recipients of the Company’s restricted stock units and market-based LTIP Units granted in 2017 was determined. Pursuant to the terms of such awards, we paid a one-time catch-up cash distribution to these recipients in the aggregate amount of $2.9 million for distributions to common shareholders and unitholders declared by our Board of Trustees during such awards' performance measurement period.

The following characterizes distributions paid per common share for the years ended December 31, 2021, 2020, and 2019:

	Year Ended December 31,
	2021		2020		2019
Ordinary income	—	%	0.15	%	50.30	%
Return of capital	—	%	—	%	—	%
Capital gain(1)	—	%	82.60	%	46.90	%
Unrecaptured Section 1250 gain	—	%	17.25	%	2.80	%
	—	%	100.00	%	100.00	%

(1)The 2020 capital gain distribution amounts are comprised entirely of long-term capital gain determined under Section 1231 of the Code, which amounts are excluded from Section 1061 of the Code. Accordingly, for purposes of Section 1061 of the Code and the Treasury Regulations thereunder, the Company makes the following disclosures that the "One Year Amounts Disclosure" and the "Three Year Amounts Disclosure" are $0.

Series D Preferred Shares:

Each of our 4,915,196 series D cumulative convertible preferred shares accrue dividends of $1.625, or 6.50% per annum of the liquidation amount, payable in equal quarterly payments. Our series D preferred shares are convertible, at the holder's option, into our common shares at a conversion rate of 0.6585 common shares per series D preferred share, which is equivalent to a conversion price of $37.97 per common share, or 3,236,657 additional common shares at December 31, 2021. The conversion rate changed from 0.5813 to 0.6585 common shares per series D preferred share effective October 2, 2020 as a result of the common share distribution declared by our Board of Trustees in 2020. The conversion rate changed from 0.5215 to 0.5813 common shares per series D preferred share effective October 8, 2019 as a result of the common share distribution declared by our Board of Trustees in 2019.

If our common shares trade at or above the then applicable conversion price, we may, at our option, convert some or all of the series D preferred shares into common shares at the then applicable conversion rate. If a fundamental change occurs, which generally will be deemed to occur upon a change in control or a termination of trading of our common shares (or other equity securities into which our series D preferred shares are then convertible), holders of our series D preferred shares will have a special right to convert their series D preferred shares into a number of our common shares per $25.00 liquidation preference, plus accrued and unpaid distributions, divided by 98% of the average closing market price of our common shares for a specified period before such event is effective, unless we exercise our right to repurchase these series D preferred shares for cash, at a purchase price equal to 100% of their liquidation preference, plus accrued and unpaid distributions. The issuance of a large number of common shares as a result of the exercise of this conversion right after a fundamental change may have a dilutive effect on net income attributable to Equity Commonwealth common shareholders per share for future periods. As of December 31, 2021, we had 4,915,196 outstanding series D preferred shares that were convertible into 3,236,657 of our common shares.

Preferred Share Distributions:

Under our governing documents and Maryland law, distributions to our shareholders are to be authorized and declared by our Board of Trustees. In 2021, our Board of Trustees declared distributions on our series D preferred shares to date as follows:

Declaration Date	Record Date	Payment Date	Dividend Per Share
January 11, 2021	January 28, 2021	February 16, 2021	$	0.40625
April 9, 2021	April 29, 2021	May 17, 2021	$	0.40625
July 6, 2021	July 30, 2021	August 16, 2021	$	0.40625
October 7, 2021	October 29, 2021	November 15, 2021	$	0.40625

The following characterizes distributions paid per preferred share for the years ended December 31, 2021, 2020, and 2019:

	Year Ended December 31,
	2021		2020		2019
Ordinary income	—	%	0.15	%	50.30	%
Return of capital	100.00	%	—	%	—	%
Capital gain(1)	—	%	82.60	%	46.90	%
Unrecaptured Section 1250 gain	—	%	17.25	%	2.80	%
	100.0	%	100.0	%	100.00	%

(1)The 2020 capital gain distribution amounts are comprised entirely of long-term capital gain determined under Section 1231 of the Code, which amounts are excluded from Section 1061 of the Code. Accordingly, for purposes of Section 1061 of the Code and the Treasury Regulations thereunder, the Company makes the following disclosures that the "One Year Amounts Disclosure" and the "Three Year Amounts Disclosure" are $0.