Investor Presentaiton
OFFICE PROPERTIES
INCOME TRUST
CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO(1)
(dollars in thousands, except per share data)
9/30/2019
6/30/2019
For the Three Months Ended
3/31/2019 12/31/2018
9/30/2018
For the Nine Months Ended
9/30/2019
9/30/2018
Net income (loss) available for common shareholders
Add (less): Depreciation and amortization:
Consolidated properties
Unconsolidated joint venture properties
(3,939) $ (64,774) $ 34,019
$
(57,695) $
(449) $
(34,694) $ 35,440
74,939
73,913
77,521
33,044
42,569
1,397
1,410
1,751
1,920
1,913
226,373
4,558
129,444
6,283
FFO attributable to SIR investment
1,859
19,012
49,914
Loss on impairment of real estate
8,521
2,380
3,204
2,830
14,105
5,800
Equity in earnings of SIR included in discontinued operations
(515)
(9,253)
(23,843)
(Gain) loss on sale of real estate
(11,463)
17
(22,092)
(3,332)
-
(33,538)
(17,329)
(Gain) loss on equity securities, net (2)
66,135
(22,128)
48,229
(17,425)
44,007
(40,677)
FFO available for common shareholders
69,455
79,081
72,275
26,340
36,367
220,811
145,032
Add (less): Acquisition and transaction related costs (3)
98
584
10,695
3,813
682
3,813
Loss on early extinguishment of debt
284
71
414
709
769
Normalized FFO attributable to SIR investment
FFO attributable to SIR investment
Net gain on issuance of shares by SIR included in discontinued operations
Estimated business management incentive fees (4)
Loss on sale of SIR shares included in discontinued operations (5)
1,524
(1,859)
15,584
42,482
(19,012)
(49,914)
(16,973)
(21)
16,236
(29)
16,973
18,665
Normalized FFO available for common shareholders
$
69,739 $
79,250
$
73,273
$ 39,101 $ 52,967
$ 222,262 $ 158,357
Weighted average common shares outstanding (basic)
Weighted average common shares outstanding (diluted)
48,073
48,049
48,031
48,073
48,049
48,046
25,027
25,027
24,768
24,768
48,051
48,051
24,764
24,769
Per common share amounts:
Net income (loss) available for common shareholders (basic and diluted)
FFO available for common shareholders (basic and diluted)
$
(0.08)
$
1.44 $
1.45 $
(1.35) $
1.65 $
1.65 $
0.71
1.50
1.53 $
$
(2.31) $
(0.02) $
1.05
1.56 $
$
1.47 $
(0.72) $
4.60 $
1.43
5.86
2.14 $
4.63 $
6.39
1)
2)
3)
4)
5)
Normalized FFO available for common shareholders (basic and diluted)
See Definitions of Certain Non-GAAP Financial Measures on page 22 for the definitions of FFO available for common shareholders and Normalized FFO available for common shareholders, a description of why we believe they are
appropriate supplemental measures and a description of how we use these measures.
(Gain) loss on equity securities, net represents the adjustment required to adjust the carrying value of our investment in RMR Inc. common stock to its fair value as of the end of the period. On July 1, 2019, we sold our investment in
RMR Inc. common stock.
Acquisition and transaction related costs consists of costs incurred in connection with the Merger.
Incentive fees under our business management agreement with RMR LLC are payable after the end of each calendar year, are calculated based on common share total return, as defined, and are included in general and administrative
expense in our consolidated statements of income. In calculating net income (loss) available for common shareholders in accordance with GAAP, we recognize estimated business management incentive fee expense, if any, in the first,
second and third quarters. Although we recognize this expense, if any, in the first, second and third quarters for purposes of calculating net income (loss) available for common shareholders, we do not include such expense in the
calculation of Normalized FFO available for common shareholders until the fourth quarter, when the amount of the business management incentive fee expense for the calendar year, if any, is determined. No business management
incentive fee was payable under our business management agreement for 2018. As successor to SIR as a result of the Merger, we assumed the obligation to pay SIR's business management incentive fee for 2018. SIR's business
management incentive fee for 2018 of $25,817 was paid by us in January 2019. Pursuant to GAAP, the business management incentive fee that SIR incurred for 2018 was not recorded in our consolidated statement of income (loss) for
the year ended December 31, 2018, but that amount was included in our consolidated balance sheet as of December 31, 2018 within due to related persons.
On October 9, 2018, we sold our investment in SIR at a loss.
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