Second Quarter Net Income of $0.30 Per
Share
Second Quarter Normalized FFO of $0.70 Per
Share
Select Income REIT (Nasdaq: SIR) today announced financial
results for the quarter and six months ended June 30,
2017.
David Blackman, President and Chief Operating Officer of SIR,
made the following statement:
"During the second quarter of 2017, Select Income REIT entered
into new and renewal leases for approximately 202,000 square feet
and executed one rent reset in Hawaii on a 79,000 square foot
lease. We also issued $350 million of seven year senior unsecured
notes, which we used to pay down our revolving credit facility and
for general business purposes."
Results for the Quarter Ended June 30, 2017:
Net income attributed to SIR was $26.7 million, or $0.30 per
diluted share, for the quarter ended June 30, 2017, compared
to $30.8 million, or $0.34 per diluted share, for the same quarter
last year.
Normalized funds from operations, or Normalized FFO, attributed
to SIR for the quarter ended June 30, 2017 were $62.1 million,
or $0.70 per diluted share, compared to $64.2 million, or $0.72 per
diluted share, for the same quarter last year.
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
June 30, 2017 and 2016 appear later in this press release.
Results for the Six Months Ended June 30, 2017:
Net income attributed to SIR was $33.4 million, or $0.37 per
diluted share, for the six months ended June 30, 2017,
compared to $63.5 million, or $0.71 per diluted share, for the same
period last year. Net income attributed to SIR per diluted share
for the six months ended June 30, 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 resulted from a tenant
bankruptcy, as well as estimated business management incentive fees
of $8.8 million, or $0.10 per diluted share. The bankrupt tenant
formerly leased two properties from SIR, one of which is
substantially vacant and the second of which is occupied by a
subtenant with whom SIR is negotiating for a direct lease.
Normalized FFO attributed to SIR for the six months ended
June 30, 2017 were $114.5 million, or $1.28 per diluted share,
compared to $130.4 million, or $1.46 per diluted share, for the
same period last year. Normalized FFO for the six months ended
June 30, 2017 include a write-off of straight line rents
receivable of $12.5 million, or $0.14 per diluted share, related to
leases associated with the tenant bankruptcy discussed above.
Reconciliations of net income attributed to SIR determined in
accordance with GAAP to FFO attributed to SIR and to Normalized FFO
attributed to SIR for the six months ended June 30, 2017 and
2016 appear later in this press release.
Leasing, Occupancy and Same Property Results:
SIR entered into lease renewals for approximately 161,000 square
feet and new leases for approximately 41,000 square feet during the
quarter ended June 30, 2017, which resulted in combined
weighted average (by square feet) rental rates that were
approximately 2.6% lower than prior rents for the same space. The
weighted average (by square feet) lease term for these leases was
31.1 years. Commitments for tenant improvements, leasing costs and
concessions for these leases totaled approximately $2.5 million, or
approximately $0.40 per square foot per weighted average lease
year. During the quarter ended June 30, 2017, SIR also
completed one rent reset for a Hawaii lease of approximately 79,000
square feet of land at a rental rate that was approximately 48.9%
higher than the prior rental rate.
As of June 30, 2017, 95.9% of SIR’s total rentable square
feet was leased, compared to 95.9% as of March 31, 2017 and 96.8%
as of June 30, 2016. Occupancy for properties owned
continuously since April 1, 2016 also decreased to 95.9% at June
30, 2017 from 96.8% at June 30, 2016. Same property cash basis net
operating income, or Cash Basis NOI, decreased 0.5% for the quarter
ended June 30, 2017 compared to the quarter ended
June 30, 2016, primarily as a result of the decline in
occupancy during 2017, partially offset by contractual rent
increases for certain properties since April 1, 2016.
Reconciliations of net income determined in accordance with GAAP
to net operating income, or NOI, and Cash Basis NOI for the
quarters and six months ended June 30, 2017 and 2016 appear
later in this press release.
Recent Investment Activities:
As previously disclosed, on April 28, 2017, SIR acquired a
single tenant office property located in Norfolk, VA with 288,662
rentable square feet for a purchase price of $55.1 million,
excluding acquisition related costs. This property is 100% leased
and had a remaining lease term as of the acquisition date of
approximately 10.2 years.
As previously disclosed, on May 12, 2017, SIR acquired a single
tenant, net leased office property located in Houston, TX with
84,150 rentable square feet for a purchase price of $20.3 million,
excluding acquisition related costs. This property is 100% leased
and had a remaining lease term as of the acquisition date of
approximately 10.6 years.
On July 19, 2017, SIR acquired a single tenant, net leased
office property located in Indianapolis, IN with approximately
275,000 rentable square feet for a purchase price of $41.1 million,
excluding acquisition related costs. This property is 100% leased
and had a remaining lease term as of the acquisition date of
approximately 10.0 years.
Recent Disposition Activities:
On April 26, 2017, SIR entered an agreement to sell one mainland
office property with 287,037 rentable square feet for $18.0
million, excluding closing costs. This sale is currently expected
to occur by year end.
Recent Financing Activities:
On May 15, 2017, SIR issued $350.0 million aggregate principal
amount of 4.250% senior unsecured notes due 2024 in an underwritten
public offering. The net proceeds from this offering of $342.2
million after discounts and offering expenses were used to repay
amounts outstanding under SIR's revolving credit facility and for
general business purposes.
On July 3, 2017, SIR repaid at par, a $17.4 million 5.95%
mortgage note which was secured by two buildings located in
Carlsbad, CA. This mortgage was scheduled to mature on September 1,
2017.
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 second 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,
August 1, 2017. To access the replay, dial (412) 317-0088. The
replay pass code is 10110419.
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 second quarter
conference call are strictly prohibited without the prior written
consent of SIR.
Supplemental Data:
A copy of SIR’s Second 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 and a
reconciliation of those amounts to amounts determined according to
GAAP.
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:
- SIR HAS ENTERED AN AGREEMENT TO SELL
ONE MAINLAND OFFICE PROPERTY FOR $18.0 MILLION, EXCLUDING CLOSING
COSTS. THIS TRANSACTION IS SUBJECT TO CONDITIONS. THESE CONDITIONS
MAY NOT BE MET AND THIS TRANSACTION MAY NOT OCCUR, MAY BE DELAYED
OR THE TERMS MAY CHANGE.
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 June
30, Six Months Ended June 30, 2017
2016 2017 2016 Revenues: Rental
income $ 97,041 $ 96,615 $ 194,385 $ 194,475 Tenant reimbursements
and other income 18,829 18,289 37,779 37,661
Total revenues 115,870 114,904 232,164
232,136 Expenses: Real estate taxes 10,836 10,522
21,679 20,810 Other operating expenses 13,523 12,635 26,390 25,593
Depreciation and amortization 34,317 33,405 68,057 66,874
Acquisition related costs — — — 58 General and administrative (1)
8,181 7,374 23,069 14,350 Write-off of straight line rents
receivable, net (2) — — 12,517 — Loss on asset impairment (2) — —
4,047 — Loss on impairment of real estate assets 229 —
229 — Total expenses 67,086 63,936
155,988 127,685 Operating income 48,784
50,968 76,176 104,451 Dividend income 396 475 793 475
Interest expense (including net amortization of debt issuance
costs, premiums and discounts of $1,568, $1,376, $2,972 and $2,750,
respectively) (22,808 ) (20,584 ) (43,895 ) (41,193 ) Income before
income tax expense and equity in earnings of an investee 26,372
30,859 33,074 63,733 Income tax expense (85 ) (124 ) (187 ) (263 )
Equity in earnings of an investee 374 17 502
94 Net income 26,661 30,752 33,389 63,564 Net income
allocated to noncontrolling interest — — — (33
) Net income attributed to SIR $ 26,661 $ 30,752 $
33,389 $ 63,531 Weighted average common shares
outstanding - basic 89,338 89,292 89,334
89,289 Weighted average common shares outstanding - diluted
89,362 89,315 89,356 89,306 Net
income attributed to SIR per common share - basic and diluted $
0.30 $ 0.34 $ 0.37 $ 0.71
(1) General and administrative expenses include estimated
business management incentive fee expense of $920 for the three
months ended June 30, 2017 and $8,766 for the six months ended
June 30, 2017.
(2) In March 2017, one of SIR's tenants filed for bankruptcy and
rejected two leases with SIR; one for a property located in
Huntsville, AL with approximately 1,400 rentable square feet and an
original lease term until August 2032; and one for a property in
Hanover, PA with approximately 502 rentable square feet and an
original lease term until September 2028. The Huntsville, AL
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, PA 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, PA property, which SIR expects
to retain and, therefore, has offset the amount of the security
deposit against its lease rejection damages. During the three
months ended March 31, 2017, 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 June
30, Six Months Ended June 30, 2017 2016 2017
2016 Net income attributed to SIR $
26,661 $ 30,752 $ 33,389 $ 63,531 Plus: depreciation and
amortization 34,317 33,405 68,057 66,874 Plus: loss on impairment
of real estate assets 229 — 229 — Plus: net income allocated to
noncontrolling interest — — — 33 Less: FFO allocated to
noncontrolling interest — — — (77 ) FFO
attributed to SIR 61,207 64,157 101,675 130,361 Plus: acquisition
related costs — — — 58 Plus: estimated business management
incentive fees (2) 920 — 8,766 — Plus: loss on asset impairment (3)
— — 4,047 — Normalized FFO attributed
to SIR $ 62,127 $ 64,157 $ 114,488 $ 130,419
Weighted average common shares outstanding - basic
89,338 89,292 89,334 89,289 Weighted
average common shares outstanding - diluted 89,362 89,315
89,356 89,306 FFO attributed to SIR per
common share - basic $ 0.69 $ 0.72 $ 1.14 $
1.46 FFO attributed to SIR per common share - diluted $ 0.68
$ 0.72 $ 1.14 $ 1.46 Normalized FFO
attributed to SIR per common share - basic and diluted $ 0.70
$ 0.72 $ 1.28 $ 1.46 Distributions
declared per common share $ 0.51 $ 0.50 $ 1.02
$ 1.00
(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 known at the end of the calendar year and
SIR excludes acquisition related costs expensed under GAAP, 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 $920 for the three months ended
June 30, 2017 and $8,766 for the six months ended
June 30, 2017.
(3) During the three months ended March 31, 2017, SIR recorded a
$4,047 loss on asset impairment for unamortized lease intangibles
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 June 30,
Six Months Ended June 30, 2017
2016 2017 2016
Calculation of NOI
and Cash Basis NOI: Rental income $ 97,041 $ 96,615 $ 194,385 $
194,475 Tenant reimbursements and other income 18,829 18,289 37,779
37,661 Real estate taxes (10,836 ) (10,522 ) (21,679 ) (20,810 )
Other operating expenses (13,523 ) (12,635 ) (26,390 ) (25,593 )
NOI 91,511 91,747 184,095 185,733 Non-cash straight line rent
adjustments included in rental income (2) (5,389 ) (6,269 ) (10,780
) (12,571 ) Lease value amortization included in rental income (2)
(527 ) (419 ) (961 ) (855 ) Lease termination fees included in
rental income (2) (101 ) — (101 ) — Non-cash amortization included
in other operating expenses (3) (213 ) (213 ) (426 ) (426 ) Cash
Basis NOI $ 85,281 $ 84,846 $ 171,827 $
171,881
Reconciliation of Net Income to NOI and
Cash Basis NOI: Net income $ 26,661 $ 30,752 $ 33,389 $ 63,564
Equity in earnings of an investee (374 ) (17 ) $ (502 ) (94 )
Income tax expense 85 124 187 263
Income before income tax expense and equity in earnings of an
investee 26,372 30,859 33,074 63,733 Interest expense 22,808 20,584
43,895 41,193 Dividend income (396 ) (475 ) (793 ) (475 ) Operating
income 48,784 50,968 76,176 104,451 Loss on impairment of
real estate assets 229 — 229 — Loss on asset impairment (4) — —
4,047 — Write-off of straight line rents receivable, net (4) — —
12,517 — General and administrative 8,181 7,374 23,069 14,350
Acquisition related costs — — — 58 Depreciation and amortization
34,317 33,405 68,057 66,874 NOI 91,511
91,747 184,095 185,733 Non-cash straight line rent adjustments
included in rental income (2) (5,389 ) (6,269 ) (10,780 ) (12,571 )
Lease value amortization included in rental income (2) (527 ) (419
) (961 ) (855 ) Lease termination fees included in rental income
(2) (101 ) — (101 ) — Non-cash amortization included in other
operating expenses (3) (213 ) (213 ) (426 ) (426 ) Cash Basis NOI $
85,281 $ 84,846 $ 171,827 $ 171,881
(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) During the three months ended March 31, 2017, 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 related
to a lease associated with this 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 June 30,
Six Months Ended June 30, 2017
2016 2017 2016
Reconciliation of NOI
to Same Property NOI (2)(3): Rental income $
97,041 $ 96,615 $ 194,385 $ 194,475 Tenant reimbursements and other
income 18,829 18,289 37,779 37,661 Real estate taxes (10,836 )
(10,522 ) (21,679 ) (20,810 ) Other operating expenses (13,523 )
(12,635 ) (26,390 ) (25,593 ) NOI 91,511 91,747 184,095 185,733
Less: NOI of properties not included in same property results
(1,739 ) — (2,121 ) — Same property NOI $ 89,772
$ 91,747 $ 181,974 $ 185,733
Calculation of Same Property Cash Basis NOI
(2)(3): Same property NOI $ 89,772 $ 91,747 $ 181,974
$ 185,733 Less: Non-cash straight line rent adjustments included in
rental income (4) (4,495 ) (6,269 ) (9,743 ) (12,571 ) Lease value
amortization included in rental income (4) (536 ) (419 ) (979 )
(855 ) Lease termination fees included in rental income (4) (101 )
— (101 ) — Non-cash amortization included in other operating
expenses (5) (213 ) (213 ) (426 ) (426 ) Same property Cash Basis
NOI $ 84,427 $ 84,846 $ 170,725 $ 171,881
(1) See footnote (1) on page 7 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 June 30, 2017, same property
NOI and same property Cash Basis NOI are based on properties SIR
owned as of June 30, 2017, and which it owned continuously
since April 1, 2016.
(3) For the six months ended June 30, 2017, same property
NOI and same property Cash Basis NOI are based on properties SIR
owned as of June 30, 2017, and which it owned continuously
since January 1, 2016.
(4) 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.
(5) 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)
June 30,
December 31, 2017 2016
ASSETS
Real estate properties: Land $ 1,035,579 $ 1,038,686 Buildings and
improvements 3,132,584 3,103,734 4,168,163 4,142,420
Accumulated depreciation (275,434 ) (242,628 ) 3,892,729 3,899,792
Properties held for sale 23,089 — Acquired real estate leases, net
496,792 506,298 Cash and cash equivalents 21,683 22,127 Restricted
cash 69 44 Rents receivable, including straight line rents of
$111,821 and $117,008, respectively, net of allowance for doubtful
accounts of $895 and $873, respectively 114,430 124,089 Deferred
leasing costs, net 11,380 10,051 Other assets, net 113,418
77,281 Total assets $ 4,673,590 $ 4,639,682
LIABILITIES AND
SHAREHOLDERS' EQUITY
Unsecured revolving credit facility $ 67,000 $ 327,000 Unsecured
term loan, net 348,622 348,373 Senior unsecured notes, net
1,774,769 1,430,300 Mortgage notes payable, net 245,235 245,643
Accounts payable and other liabilities 95,353 101,605 Assumed real
estate lease obligations, net 73,200 77,622 Rents collected in
advance 16,436 18,815 Security deposits 8,332 11,887 Due to related
persons 13,389 4,475 Total liabilities 2,642,336
2,565,720 Commitments and contingencies
Shareholders' equity: Common shares of beneficial interest, $.01
par value: 125,000,000 shares authorized; 89,442,647 and 89,427,869
shares issued and outstanding, respectively 894 894 Additional paid
in capital 2,180,054 2,179,669 Cumulative net income 474,696
441,307 Cumulative other comprehensive income 35,206 20,472
Cumulative common distributions (659,596 ) (568,380 ) Total
shareholders' equity 2,031,254 2,073,962 Total
liabilities and shareholders' equity $ 4,673,590 $ 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/20170725005518/en/
Select Income REITChristopher Ranjitkar, 617-796-8320Director,
Investor Relations
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