484,000 Square Feet Leased at 20.9% Rental
Rate Increases
Select Income REIT (Nasdaq: SIR) today announced financial
results for the quarter ended March 31, 2017.
David Blackman, President and Chief Operating
Officer of SIR, made the following statement:
"Select Income REIT’s solid leasing momentum
continued in the first quarter of 2017. We executed 484,000 square
feet of new and renewal leases for weighted average rents that were
over 20% higher than previous rents for the same space, for 10
years of weighted average lease term, and with leasing concessions
and capital commitments of $0.23 per square foot per lease
year. We also acquired land to expand a building for an existing
tenant and entered agreements to acquire two additional
properties."
Results for the Quarter Ended March 31, 2017:
Net income attributed to SIR was $6.7 million, or $0.08 per
diluted share, for the quarter ended March 31, 2017, compared
to $32.8 million, or $0.37 per diluted share, for the same quarter
last year. Net income attributed to SIR per diluted share for the
quarter ended March 31, 2017 includes a write-off of straight line
rents receivable of $12.5 million, or $0.14 per diluted share, and
a loss on asset impairment of $4.0 million, or $0.05 per diluted
share, both of which are related to leases associated with a tenant
bankruptcy at two properties, as well as estimated business
management incentive fees of $7.8 million, or $0.09 per diluted
share.
Normalized funds from operations, or Normalized FFO, attributed
to SIR for the quarter ended March 31, 2017 were $52.4
million, or $0.59 per diluted share, compared to $66.3 million, or
$0.74 per diluted share, for the same quarter last year. Normalized
FFO for the quarter ended March 31, 2017 includes a write-off of
straight line rents receivable of $12.5 million, or $0.14 per
diluted share, related to leases associated with a tenant
bankruptcy at two properties.
Reconciliations of net income attributed to SIR determined in
accordance with U.S. generally accepted accounting principles, or
GAAP, to funds from operations, or FFO, attributed to SIR and to
Normalized FFO attributed to SIR for the quarters ended
March 31, 2017 and 2016 appear later in this press
release.
Leasing, Occupancy and Same Property Results:
SIR entered into lease renewals for approximately 250,000 square
feet and new leases for approximately 234,000 square feet,
including a 35,000 square foot expansion to be constructed at an
existing property, during the quarter ended March 31, 2017,
which resulted in combined weighted average (by square feet) rental
rates that were approximately 20.9% higher than prior rents for the
same space. The weighted average (by square feet) lease terms for
these leases was 10.0 years. Commitments for tenant improvements,
leasing costs and concessions for these leases totaled
approximately $1.1 million, or approximately $0.23 per square foot
per weighted average lease year.
As of March 31, 2017, 95.9% of SIR’s total rentable square
feet was leased, compared to 96.8% as of December 31, 2016 and
97.8% as of March 31, 2016. Occupancy for properties owned
continuously since January 1, 2016 decreased to 95.9% at
March 31, 2017 from 97.8% at March 31, 2016. Same
property cash basis net operating income, or Cash Basis NOI,
decreased 0.8% for the quarter ended March 31, 2017 compared
to the quarter ended March 31, 2016, primarily as a result of
the decline in occupancy during 2017, partially offset by
contractual rent increases for certain properties since January 1,
2016.
In March 2017, one of SIR's tenants filed for bankruptcy and
rejected two leases; one for a property located in Huntsville, AL
with approximately 1.4 million rentable square feet and an original
lease term until August 2032; and one for a property in Hanover, PA
with approximately 502,000 rentable square feet and an original
lease term until September 2028. The Huntsville property is
occupied by a subtenant that continues to pay rent to SIR in an
amount equal to the rent under the rejected lease. SIR is holding a
security deposit of $3.7 million with respect to the Hanover
property, which SIR expects to retain. During the quarter ended
March 31, 2017, SIR recorded a non-cash charge of $12.5 million to
write off straight line rents receivable (net of the $3.7 million
security deposit) related to leases with the former tenant at both
properties plus an impairment charge of $4.0 million related to the
write-off of lease intangibles at the Hanover property.
Reconciliations of net income determined in accordance with GAAP
to net operating income, or NOI, and Cash Basis NOI for the
quarters ended March 31, 2017 and 2016 appear later in this
press release.
Recent Investment Activities:
As previously disclosed, on January 13, 2017, SIR acquired a
land parcel adjacent to one of its properties located in McAlester,
OK for a purchase price of $225,500, excluding acquisition related
costs. The land parcel will be used to expand the building on SIR's
adjacent property for an existing tenant by approximately 35,000
rentable square feet. In conjunction with the expansion, SIR is
extending the tenant's lease to a term of approximately 11.0
years.
On March 15, 2017, SIR entered an agreement to acquire a single
tenant office property located in Norfolk, VA with approximately
289,000 rentable square feet for a purchase price of $57.0 million,
excluding acquisition related costs and closing adjustments. This
property is 100% leased.
On April 5, 2017, SIR entered an agreement to acquire a single
tenant, net leased office property located in Houston, TX with
approximately 84,000 rentable square feet for a purchase price of
$20.3 million, excluding acquisition related costs. This property
is 100% leased.
Conference Call:
At 10:00 a.m. Eastern Time this morning, President and
Chief Operating Officer, David Blackman, and Chief Financial
Officer and Treasurer, John Popeo, will host a conference call to
discuss SIR’s first quarter 2017 financial results.
The conference call telephone number is (877) 328-4494.
Participants calling from outside the United States and Canada
should dial (412) 317-5433. No pass code is necessary to access the
call from either number. Participants should dial in about 15
minutes prior to the scheduled start of the call. A replay of the
conference call will be available through 11:59 p.m. on
Tuesday, May 2, 2017. To access the replay, dial (412) 317-0088.
The replay pass code is 10104359.
A live audio webcast of the conference call will also be
available in a listen-only mode on SIR's website, which is located
at www.sirreit.com. Participants wanting to access the webcast
should visit SIR's website about five minutes before the call. The
archived webcast will be available for replay on SIR's website
following the call for about one week. The transcription,
recording and retransmission in any way of SIR’s first quarter
conference call are strictly prohibited without the prior written
consent of SIR.
Supplemental Data:
A copy of SIR’s First Quarter 2017 Supplemental Operating and
Financial Data is available for download at SIR’s website,
www.sirreit.com. SIR’s website is not incorporated as part of this
press release.
Select Income REIT is a real estate investment trust, or REIT,
which owns properties that are primarily net leased to single
tenants. SIR is managed by the operating subsidiary of The RMR
Group Inc. (Nasdaq: RMR), an alternative asset management company
that is headquartered in Newton, MA.
Please see the pages attached hereto for a more detailed
statement of SIR’s operating results and financial condition and
for an explanation of SIR’s calculation of NOI, Cash Basis NOI, FFO
attributed to SIR and Normalized FFO attributed to SIR.
WARNING CONCERNING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD
LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO,
WHENEVER SIR USES WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”,
“INTEND”, “PLAN”, “ESTIMATE”, “WILL”, “MAY” AND NEGATIVES OR
DERIVATIVES OF THESE OR SIMILAR EXPRESSIONS, SIR IS MAKING FORWARD
LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON
SIR’S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING
STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR.
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN
OR IMPLIED BY SIR’S FORWARD LOOKING STATEMENTS AS A RESULT OF
VARIOUS FACTORS. FOR EXAMPLE:
- MR. BLACKMAN'S STATEMENT IN THIS PRESS
RELEASE THAT SIR EXPERIENCED SOLID LEASING MOMENTUM DURING THE
FIRST QUARTER OF 2017 MAY IMPLY THAT SIR WILL CONTINUE TO
EXPERIENCE IMPROVING PROPERTY LEASING CONDITIONS. HOWEVER, SIR'S
ABILITY TO LEASE ITS PROPERTIES DEPENDS IN LARGE MEASURE ON MARKET
CONDITIONS IN THE AREAS WHERE SIR'S PROPERTIES ARE LOCATED WHEN
SUCH PROPERTIES BECOME AVAILABLE FOR LEASE. LEASING MARKET
CONDITIONS ARE GENERALLY BEYOND SIR'S CONTROL. IN THE FUTURE, SIR
MAY EXPERIENCE INCREASING VACANCIES OR LOWER RENTS AT SIR'S OWNED
PROPERTIES,
- THIS PRESS RELEASE STATES THAT SIR
INTENDS TO USE THE LAND PARCEL IT ACQUIRED IN MCALESTER, OK TO
EXPAND THE BUILDING ON SIR'S ADJACENT PROPERTY FOR AN EXISTING
TENANT. HOWEVER, THE EXPANSION OF THE BUILDING MAY NOT OCCUR, MAY
BE DELAYED OR THE TERMS OF THE LEASE EXTENSION MAY CHANGE,
- THIS PRESS RELEASE STATES THAT SIR HAS
ENTERED TWO AGREEMENTS TO ACQUIRE PROPERTIES FOR AN AGGREGATE OF
$77.3 MILLION, EXCLUDING ACQUISITION RELATED COSTS AND CLOSING
ADJUSTMENTS. THESE TRANSACTIONS ARE SUBJECT TO CLOSING CONDITIONS.
THESE CONDITIONS MAY NOT BE SATISFIED AND THESE TRANSACTIONS MAY
NOT OCCUR, MAY BE DELAYED OR THE PRICES AND TERMS MAY CHANGE,
AND
- THIS PRESS RELEASE STATES THAT A TENANT
OF TWO OF SIR'S PROPERTIES HAS FILED FOR BANKRUPTCY AND REJECTED
ITS TWO LEASES WITH SIR. ALTHOUGH SIR HOLDS A SECURITY DEPOSIT OF
$3.7 MILLION FROM THIS TENANT, SIR'S ABILITY TO APPLY THAT SECURITY
DEPOSIT MAY BE SUBJECT TO BANKRUPTCY COURT APPROVAL. IN ADDITION,
SIR WOULD NOT RECEIVE ANY ADDITIONAL CASH PAYMENT WHEN IT APPLIES
THE SECURITY DEPOSIT. ALTHOUGH THE SUBTENANT AT ONE OF THE TWO
PROPERTIES CONTINUES TO PAY RENT TO SIR IN AN AMOUNT EQUAL TO THE
RENT UNDER THE FORMER TENANT'S LEASE, THE SUBTENANT HAS CERTAIN
RIGHTS TO TERMINATE ITS SUBLEASE, INCLUDING UPON ONE YEAR'S ADVANCE
NOTICE. SIR IS IN DISCUSSIONS WITH THIS SUBTENANT TO CONVERT ITS
SUBLEASE TO A DIRECT LEASE WITH SIR. SIR CAN PROVIDE NO ASSURANCE
THAT IT WILL BE SUCCESSFUL IN REACHING AGREEMENT WITH THIS
SUBTENANT OR THAT THE TERMS OF ANY AGREEMENT WITH THE SUBTENANT
WILL BE SIMILAR TO THE TERMS OF THE REJECTED LEASE WITH THE
BANKRUPT FORMER TENANT, INCLUDING THE AMOUNT OF RENT UNDER ANY SUCH
AGREEMENT,
THE INFORMATION CONTAINED IN SIR’S FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER “RISK FACTORS” IN
SIR’S PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE SIR’S ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE STATED IN OR IMPLIED BY SIR’S FORWARD LOOKING
STATEMENTS. SIR’S FILINGS WITH THE SEC ARE AVAILABLE ON ITS WEBSITE
AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING
STATEMENTS.
EXCEPT AS REQUIRED BY LAW, SIR DOES NOT INTEND TO UPDATE OR
CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE.
Select Income REIT
Condensed Consolidated Statements of
Income
(amounts in thousands, except per share
data)
(unaudited)
Three Months Ended March 31, 2017 2016
Revenues: Rental income $ 97,344 $ 97,860 Tenant reimbursements and
other income 18,950 19,372 Total revenues 116,294
117,232 Expenses: Real estate taxes 10,843
10,288 Other operating expenses 12,867 12,958 Depreciation and
amortization 33,740 33,469 Acquisition related costs — 58 General
and administrative (1) 14,888 6,976 Write-off of straight line
rents receivable, net (2) 12,517 — Loss on asset impairment (2)
4,047 — Total expenses 88,902 63,749
Operating income 27,392 53,483 Dividend income 397 —
Interest expense (including net
amortization of debt issuance costs, premiums and discountsof
$1,404 and $1,374, respectively)
(21,087 ) (20,609 ) Income before income tax expense and equity in
earnings of an investee 6,702 32,874 Income tax expense (102 ) (139
) Equity in earnings of an investee 128 77 Net income
6,728 32,812 Net income allocated to noncontrolling interest —
(33 ) Net income attributed to SIR $ 6,728 $ 32,779
Weighted average common shares outstanding - basic
89,331 89,286 Weighted average common shares
outstanding - diluted 89,348 89,295 Net income
attributed to SIR per common share - basic and diluted $ 0.08
$ 0.37
(1) General and administrative expenses include estimated
business management incentive fee expense of $7,846 for the three
months ended March 31, 2017.
(2) In March 2017, one of SIR's tenants filed for bankruptcy and
rejected two leases; one for a property located in Huntsville, AL
with approximately 1.4 million rentable square feet and an original
lease term until August 2032; and one for a property in Hanover, PA
with approximately 502,000 rentable square feet and an original
lease term until September 2028. The Huntsville property is
occupied by a subtenant that continues to pay rent to SIR in an
amount equal to the rent under the rejected lease. The sublease
term runs concurrently with the former tenant’s original lease
term, subject to certain termination rights by the subtenant. SIR
expects that the lost rents plus carrying costs, such as real
estate taxes, insurance, security and other operating costs, from a
fully vacant Hanover property may total approximately $3,800 per
year. SIR is holding a security deposit of $3,739 from the tenant
with respect to the Hanover property, which SIR expects to retain
and, therefore, has offset the amount of the security deposit
against its lease rejection damages. SIR recorded a non-cash charge
of $12,517 to write off straight line rents receivable (net of the
$3,739 security deposit) related to leases with the former tenant
at both properties plus an impairment charge of $4,047 related to
the write off of lease intangibles related to the property located
in Hanover, PA.
Select Income REIT
Funds from Operations Attributed to SIR
and Normalized Funds from Operations Attributed to SIR
(1)
(amounts in thousands, except per share
data)
(unaudited)
Three Months Ended March 31, 2017 2016
Net income attributed to SIR $ 6,728 $ 32,779 Plus: depreciation
and amortization 33,740 33,469 Plus: net income allocated to
noncontrolling interest — 33 Less: FFO allocated to noncontrolling
interest — (77 ) FFO attributed to SIR 40,468 66,204 Plus:
acquisition related costs — 58 Plus: estimated business management
incentive fees (2) 7,846 — Plus: loss on asset impairment (3) 4,047
— Normalized FFO attributed to SIR $ 52,361 $
66,262 Weighted average common shares outstanding -
basic 89,331 89,286 Weighted average common shares
outstanding - diluted 89,348 89,295 FFO
attributed to SIR per share - basic and diluted $ 0.45 $
0.74 Normalized FFO attributed to SIR per share - basic and
diluted $ 0.59 $ 0.74 Distributions declared per
share $ 0.51 $ 0.50
(1) SIR calculates FFO attributed to SIR and Normalized FFO
attributed to SIR as shown above. FFO attributed to SIR is
calculated on the basis defined by The National Association of Real
Estate Investment Trusts, or NAREIT, which is net income,
calculated in accordance with GAAP, plus real estate depreciation
and amortization, loss on impairment of real estate assets and the
difference between net income and FFO allocated to noncontrolling
interest, as well as certain other adjustments currently not
applicable to SIR. SIR’s calculation of Normalized FFO attributed
to SIR differs from NAREIT’s definition of FFO because SIR includes
business management incentive fees, if any, only in the fourth
quarter versus the quarter when they are recognized as expense in
accordance with GAAP due to their quarterly volatility not
necessarily being indicative of SIR’s core operating performance
and the uncertainty as to whether any such business management
incentive fees will be payable when all contingencies for
determining such fees are determined at the end of the calendar
year, and SIR excludes acquisition related costs, loss on asset
impairment and Normalized FFO from noncontrolling interest, net of
FFO, if any. SIR considers FFO attributed to SIR and Normalized FFO
attributed to SIR to be appropriate supplemental measures of
operating performance for a REIT, along with net income, net income
attributed to a REIT and operating income. SIR believes that FFO
attributed to SIR and Normalized FFO attributed to SIR provide
useful information to investors because by excluding the effects of
certain historical amounts, such as depreciation expense, FFO
attributed to SIR and Normalized FFO attributed to SIR may
facilitate a comparison of its operating performance between
periods and with other REITs. FFO attributed to SIR and Normalized
FFO attributed to SIR are among the factors considered by SIR’s
Board of Trustees when determining the amount of distributions to
SIR’s shareholders. Other factors include, but are not limited to,
requirements to maintain SIR’s qualification for taxation as a
REIT, limitations in SIR’s credit agreement and public debt
covenants, the availability to SIR of debt and equity capital,
SIR’s expectation of its future capital requirements and operating
performance and SIR’s expected needs and availability of cash to
pay its obligations. FFO attributed to SIR and Normalized FFO
attributed to SIR do not represent cash generated by operating
activities in accordance with GAAP and should not be considered as
alternatives to net income, net income attributed to SIR or
operating income as an indicator of SIR’s operating performance or
as a measure of SIR’s liquidity. These measures should be
considered in conjunction with net income, net income attributed to
SIR and operating income as presented in SIR’s condensed
consolidated statements of income. Other real estate companies and
REITs may calculate FFO and Normalized FFO differently than SIR
does.
(2) Incentive fees under SIR’s business management agreement
with The RMR Group 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 expenses in
SIR’s condensed consolidated statements of income. In calculating
net income in accordance with GAAP, SIR recognizes estimated
business management incentive fee expense, if any, in the first,
second and third quarters. Although SIR recognizes this expense, if
any, in the first, second and third quarters for purposes of
calculating net income, SIR does not include such expense in the
calculation of Normalized FFO attributed to SIR until the fourth
quarter, when the amount of the business management incentive fee
expense for the calendar year, if any, is determined. Normalized
FFO attributed to SIR excludes estimated business management
incentive fee expense of $7,846 for the three months ended March
31, 2017.
(3) SIR recorded a $4,047 loss on asset impairment for
unamortized lease intangibles during the three months ended March
31, 2017 related to a lease associated with a tenant bankruptcy at
a property located in Hanover, PA.
Select Income REIT
Calculation and Reconciliation of
Property Net Operating Income and Cash Basis Net Operating
Income (1)
(dollars in thousands)
(unaudited)
Three Months Ended March 31, 2017 2016
Calculation of NOI and Cash Basis NOI: Rental income $
97,344 $ 97,860 Tenant reimbursements and other income 18,950
19,372 Real estate taxes (10,843 ) (10,288 ) Other operating
expenses (12,867 ) (12,958 ) NOI 92,584 93,986 Non-cash straight
line rent adjustments included in rental income (2) (5,391 ) (6,302
) Lease value amortization included in rental income (2) (434 )
(436 ) Non-cash amortization included in other operating expenses
(3) (213 ) (213 ) Cash Basis NOI $ 86,546 $ 87,035
Reconciliation of Net Income to NOI and Cash Basis
NOI: Net income $ 6,728 $ 32,812 Equity in earnings of an
investee (128 ) (77 ) Income tax expense 102 139
Income before income tax expense and equity in earnings of an
investee 6,702 32,874 Interest expense 21,087 20,609 Dividend
income (397 ) — Operating income 27,392 53,483 Loss
on asset impairment (4) 4,047 — Write-off of straight line rents
receivable, net (4) 12,517 — General and administrative 14,888
6,976 Acquisition related costs — 58 Depreciation and amortization
33,740 33,469 NOI 92,584 93,986 Non-cash
straight line rent adjustments included in rental income (2) (5,391
) (6,302 ) Lease value amortization included in rental income (2)
(434 ) (436 ) Non-cash amortization included in other operating
expenses (3) (213 ) (213 ) Cash Basis NOI $ 86,546 $ 87,035
(1) The calculations of NOI and Cash Basis NOI exclude certain
components of net income in order to provide results that are more
closely related to SIR’s property level results of operations. SIR
calculates NOI and Cash Basis NOI as shown above. SIR defines NOI
as income from its rental of real estate less its property
operating expenses. NOI excludes amortization of capitalized tenant
improvement costs and leasing commissions because SIR records those
amounts as depreciation and amortization. SIR defines Cash Basis
NOI as NOI excluding non-cash straight line rent adjustments, lease
value amortization, lease termination fees, if any, and non-cash
amortization included in other operating expenses. SIR considers
NOI and Cash Basis NOI to be appropriate supplemental measures to
net income because they may help both investors and management to
understand the operations of SIR’s properties. SIR uses NOI and
Cash Basis NOI to evaluate individual and company wide property
level performance, and SIR believes that NOI and Cash Basis NOI
provide useful information to investors regarding its results of
operations because they reflect only those income and expense items
that are generated and incurred at the property level and may
facilitate comparisons of SIR’s operating performance between
periods and with other REITs. NOI and Cash Basis NOI 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 attributed to SIR or operating income as an indicator of
SIR’s operating performance or as a measure of SIR’s liquidity.
These measures should be considered in conjunction with net income,
net income attributed to SIR and operating income as presented in
SIR’s condensed consolidated statements of income. Other real
estate companies and REITs may calculate NOI and Cash Basis NOI
differently than SIR does.
(2) SIR reports rental income on a straight line basis over the
terms of the respective leases; accordingly, rental income includes
non-cash straight line rent adjustments. Rental income also
includes non-cash amortization of intangible lease assets and
liabilities and lease termination fees, if any.
(3) SIR recorded a liability for the amount by which the
estimated fair value for accounting purposes exceeded the price SIR
paid for its investment in RMR common stock in June 2015. A
portion of this liability is being amortized on a straight line
basis through December 31, 2035 as a reduction to property
management fees, which are included in other operating
expenses.
(4) SIR recorded a $12,517 non-cash write-off of straight line
rents receivable related to leases associated with a tenant
bankruptcy at two properties located in Huntsville, AL and Hanover,
PA and a $4,047 loss on asset impairment for unamortized lease
intangibles during the three months ended March 31, 2017 related to
a lease associated with a tenant bankruptcy at the property located
in Hanover, PA.
Select Income REIT
Reconciliation of Net Operating Income
to Same Property Net Operating Income and Calculation of
Same
Property Cash Basis Net Operating
Income (1)
(amounts in thousands)
(unaudited)
Three Months Ended March 31, 2017 2016
Reconciliation of NOI to Same Property NOI
(2): Rental income $ 97,344 $ 97,860 Tenant
reimbursements and other income 18,950 19,372 Real estate taxes
(10,843 ) (10,288 ) Other operating expenses (12,867 ) (12,958 )
NOI 92,584 93,986 Less: NOI of properties not included in same
property results (383 ) — Same property NOI $ 92,201
$ 93,986
Calculation of Same Property Cash
Basis NOI (2): Same property NOI $ 92,201 $
93,986 Less: Non-cash straight line rent adjustments included in
rental income (3) (5,248 ) (6,302 ) Lease value amortization
included in rental income (3) (443 ) (436 ) Non-cash amortization
included in other operating expenses (4) (213 ) (213 ) Same
property Cash Basis NOI $ 86,297 $ 87,035
(1) See footnote (1) on page 8 of this press release
for the definitions of NOI and Cash Basis NOI, a description of why
SIR believes they are appropriate supplemental measures and a
description of how SIR uses these measures.
(2) For the three months ended March 31, 2017, same
property NOI and same property Cash Basis NOI are based on
properties SIR owned as of March 31, 2017, and which it owned
continuously since January 1, 2016.
(3) SIR reports rental income on a straight line basis over the
terms of the respective leases; accordingly, rental income includes
non-cash straight line rent adjustments. Rental income also
includes non-cash amortization of intangible lease assets and
liabilities and lease termination fees, if any.
(4) SIR recorded a liability for the amount by which the
estimated fair value for accounting purposes exceeded the price SIR
paid for its investment in RMR common stock in June 2015. A
portion of this liability is being amortized on a straight line
basis through December 31, 2035 as a reduction to property
management fees, which are included in other operating
expenses.
Select Income REIT
Condensed Consolidated Balance
Sheets
(amounts in thousands, except share
data)
(unaudited)
March 31, December 31, 2017 2016
ASSETS
Real estate properties: Land $ 1,038,963 $ 1,038,686 Buildings and
improvements 3,105,382 3,103,734 4,144,345 4,142,420
Accumulated depreciation (262,400 ) (242,628 ) 3,881,945 3,899,792
Acquired real estate leases, net 486,932 506,298 Cash and cash
equivalents 18,101 22,127 Restricted cash 44 44
Rents receivable, including straight line
rents of $106,433 and $117,008, respectively, netof allowance for
doubtful accounts of $809 and $873, respectively
111,688 124,089 Deferred leasing costs, net 11,094 10,051 Other
assets, net 104,261 77,281 Total assets $ 4,614,065
$ 4,639,682
LIABILITIES AND
SHAREHOLDERS' EQUITY
Unsecured revolving credit facility $ 342,000 $ 327,000 Unsecured
term loan, net 348,497 348,373 Senior unsecured notes, net
1,431,368 1,430,300 Mortgage notes payable, net 245,418 245,643
Accounts payable and other liabilities 80,931 101,605 Assumed real
estate lease obligations, net 75,411 77,622 Rents collected in
advance 18,678 18,815 Security deposits 8,341 11,887 Due to related
persons 12,218 4,475 Total liabilities 2,562,862
2,565,720 Commitments and contingencies
Shareholders' equity:
Common shares of beneficial interest, $.01
par value: 125,000,000 shares authorized;89,427,869 shares issued
and outstanding
894 894 Additional paid in capital 2,179,669 2,179,669 Cumulative
net income 448,035 441,307 Cumulative other comprehensive income
36,593 20,472 Cumulative common distributions (613,988 ) (568,380 )
Total shareholders' equity 2,051,203 2,073,962 Total
liabilities and shareholders' equity $ 4,614,065 $ 4,639,682
A Maryland Real Estate Investment Trust with
transferable shares of beneficial interest listed on the Nasdaq.No
shareholder, Trustee or officer is personally liable for any act or
obligation of the Trust.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170425005614/en/
Select Income REITChristopher Ranjitkar, 617-796-8320Director,
Investor Relations
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