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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. 24
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