Attached files
| file | filename |
|---|---|
| 8-K - 8-K - OFFICE PROPERTIES INCOME TRUST | a8-kcoverpage_123117.htm |
| EX-99.1 - EXHIBIT 99.1 - OFFICE PROPERTIES INCOME TRUST | gov_123117xexhibitx991.htm |
Fourth Quarter 2016
Supplemental Operating and Financial Data
All amounts in this report are unaudited.
Government Properties Income Trust Exhibit 99.2Exhibit 99.2Exhibit 99.2
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
TABLE OF CONTENT
S
2
TABLE OF CONTENTS
PAGE
CORPORATE INFORMATION
Company Profile 6
Investor Information 7
Research Coverage 8
FINANCIALS
Key Financial Data 10
Consolidated Balance Sheets 11
Consolidated Statements of Income (Loss) 12
Consolidated Statements of Cash Flows 13
Debt Summary 14
Debt Maturity Schedule 15
Leverage Ratios, Coverage Ratios and Public Debt Covenants 16
Summary of Capital Expenditures 17
Property Acquisition and Disposition Information Since January 1, 2017 18
Investment In Unconsolidated Joint Ventures 19
Calculation of Consolidated Property Net Operating Income (NOI) and Consolidated Property Cash Basis NOI 20
Calculation of Same Property NOI and Cash Basis NOI 21
Calculation of EBITDA and Adjusted EBITDA 22
Calculation of Funds from Operations (FFO) and Normalized FFO Available for Common Shareholders 23
Definitions of Certain Non-GAAP Financial Measures 24
PORTFOLIO INFORMATION
Portfolio Summary 26
Summary Consolidated and Same Property Results 27
Occupancy and Leasing Summary 29
Leasing Analysis by Tenant Type 30
Tenant List 31
Lease Expiration Schedule 32
EXHIBIT A
Consolidated Property Detail 34
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
W
ARNING CONCERNING FO
RW
ARD LOOKING S
TA
TEMENT
S
3
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESENTATION OF SUPPLEMENTAL OPERATING AND FINANCIAL DATA 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 WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE”, “WILL”, “MAY” AND NEGATIVES OR DERIVATIVES OF
THESE OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD
LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:
• OUR ACQUISITIONS AND SALES OF PROPERTIES,
• OUR ABILITY TO COMPETE FOR ACQUISITIONS AND TENANCIES EFFECTIVELY,
• THE LIKELIHOOD THAT OUR TENANTS WILL PAY RENT OR BE NEGATIVELY AFFECTED BY CYCLICAL ECONOMIC CONDITIONS OR GOVERNMENT BUDGET CONSTRAINTS,
• THE LIKELIHOOD THAT OUR TENANTS WILL RENEW OR EXTEND THEIR LEASES AND NOT EXERCISE EARLY TERMINATION OPTIONS PURSUANT TO THEIR LEASES OR THAT WE WILL OBTAIN REPLACEMENT TENANTS,
• THE LIKELIHOOD THAT OUR RENTS WILL INCREASE WHEN WE RENEW OR EXTEND OUR LEASES OR ENTER NEW LEASES,
• OUR ABILITY TO PAY DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO SUSTAIN THE AMOUNT OF SUCH DISTRIBUTIONS,
• OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP INTEREST IN SELECT INCOME REIT, OR SIR,
• OUR POLICIES AND PLANS REGARDING INVESTMENTS, FINANCINGS AND DISPOSITIONS,
• THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY,
• OUR EXPECTATION THAT THERE WILL BE OPPORTUNITIES FOR US TO ACQUIRE, AND THAT WE WILL ACQUIRE, ADDITIONAL PROPERTIES IN THE METROPOLITAN WASHINGTON, D.C. MARKET AREA OR ELSEWHERE, INCLUDING
PROPERTIES THAT ARE MAJORITY LEASED TO GOVERNMENT TENANTS, GOVERNMENT CONTRACTOR TENANTS OR OTHER PRIVATE TENANTS,
• OUR EXPECTATIONS REGARDING DEMAND FOR LEASED SPACE BY THE U.S. GOVERNMENT AND STATE AND LOCAL GOVERNMENTS,
• OUR ABILITY TO RAISE DEBT OR EQUITY CAPITAL,
• OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,
• OUR ABILITY TO APPROPRIATELY BALANCE OUR USE OF DEBT AND EQUITY CAPITAL,
• OUR CREDIT RATINGS,
• OUR EXPECTED BENEFITS FROM OUR ACQUISITION OF FIRST POTOMAC REALTY TRUST, OR FPO, AND SUCH ACQUISITION, THE FPO TRANSACTION,
• OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP INTEREST IN AND OTHER RELATIONSHIPS WITH THE RMR GROUP INC., OR RMR INC.,
• OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP INTEREST IN AND OTHER RELATIONSHIPS WITH AFFILIATES INSURANCE COMPANY, OR AIC, AND FROM OUR PARTICIPATION IN INSURANCE PROGRAMS ARRANGED BY
AIC,
• THE CREDIT QUALITIES OF OUR TENANTS,
• OUR QUALIFICATION FOR TAXATION AS A REAL ESTATE INVESTMENT TRUST, OR REIT, AND
• OTHER MATTERS.
OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR FORWARD LOOKING STATEMENTS AND UPON OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION, FUNDS FROM OPERATIONS, OR FFO, AVAILABLE FOR COMMON SHAREHOLDERS, NORMALIZED FUNDS FROM
OPERATIONS, OR NORMALIZED FFO, AVAILABLE FOR COMMON SHAREHOLDERS, CONSOLIDATED PROPERTY NET OPERATING INCOME, OR NOI, CONSOLIDATED PROPERTY CASH BASIS NOI, EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTIZATION, OR EBITDA, EBITDA AS ADJUSTED, OR ADJUSTED EBITDA, CASH FLOWS, LIQUIDITY AND PROSPECTS INCLUDE, BUT ARE NOT LIMITED TO:
• THE IMPACT OF CONDITIONS AND CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR TENANTS,
• COMPETITION WITHIN THE REAL ESTATE INDUSTRY, PARTICULARLY IN THOSE MARKETS IN WHICH OUR PROPERTIES ARE LOCATED AND WITH RESPECT TO GOVERNMENT TENANCIES,
• THE IMPACT OF CHANGES IN THE REAL ESTATE NEEDS AND FINANCIAL CONDITIONS OF THE U.S. GOVERNMENT AND STATE AND LOCAL GOVERNMENTS,
• COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS,
• ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR RELATED PARTIES, INCLUDING OUR MANAGING TRUSTEE, THE RMR GROUP LLC, OR RMR LLC, RMR INC., SIR, AIC AND OTHERS AFFILIATED WITH THEM,
• LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY FOR TAXATION AS A REIT FOR U.S. FEDERAL INCOME TAX PURPOSES, AND
• ACTS OF TERRORISM, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND OUR CONTROL.
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017W
ARNING CONCERNING FO
RW
ARD LOOKING S
TA
TEMENTS (continued
)
4
FOR EXAMPLE:
• OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON OUR INDEBTEDNESS DEPENDS UPON A NUMBER OF FACTORS, INCLUDING
OUR FUTURE EARNINGS, THE CAPITAL COSTS WE INCUR TO LEASE OUR PROPERTIES, OUR WORKING CAPITAL REQUIREMENTS AND OUR RECEIPT OF DISTRIBUTIONS FROM SIR. WE MAY BE UNABLE TO PAY OUR
DEBT OBLIGATIONS OR TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS ON OUR COMMON SHARES AND FUTURE DISTRIBUTIONS MAY BE REDUCED OR ELIMINATED,
• OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES AND LEASE THEM FOR RENTS, LESS THEIR
PROPERTY OPERATING COSTS, THAT EXCEED OUR CAPITAL COSTS. WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES,
ACQUISITION FINANCING OR LEASE TERMS FOR NEW PROPERTIES,
• SOME OF OUR TENANTS MAY NOT RENEW EXPIRING LEASES, AND WE MAY BE UNABLE TO OBTAIN NEW TENANTS TO MAINTAIN OR INCREASE THE HISTORICAL OCCUPANCY RATES OF, OR RENTS FROM, OUR
PROPERTIES,
• SOME GOVERNMENT TENANTS MAY EXERCISE THEIR RIGHTS TO VACATE THEIR SPACE BEFORE THE STATED EXPIRATION OF THEIR LEASES AND WE MAY BE UNABLE TO OBTAIN NEW TENANTS TO MAINTAIN
THE HISTORICAL OCCUPANCY RATES OF, OR RENTS FROM, OUR PROPERTIES,
• RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE BECAUSE OF CHANGING MARKET CONDITIONS OR OTHERWISE,
• CONTINGENCIES IN OUR ACQUISITION AND SALE AGREEMENTS MAY NOT BE SATISFIED AND OUR PENDING ACQUISITIONS AND SALES MAY NOT OCCUR, MAY BE DELAYED OR THE TERMS OF SUCH TRANSACTIONS MAY CHANGE,
• WE MAY FAIL TO SELL PROPERTIES THAT WE IDENTIFY FOR SALE OR WE MAY REALIZE LOSSES ON ANY SUCH SALES OR IN CONNECTION WITH DECISIONS TO PURSUE SELLING CERTAIN OF OUR PROPERTIES,
• CONTINUED AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND OTHER CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO
SATISFY,
• ACTUAL COSTS UNDER OUR REVOLVING CREDIT FACILITY OR OTHER FLOATING RATE DEBT WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF FEES AND EXPENSES ASSOCIATED WITH SUCH DEBT,
• THE INTEREST RATES PAYABLE UNDER OUR FLOATING RATE DEBT OBLIGATIONS DEPEND UPON OUR CREDIT RATINGS. BOTH MOODY'S INVESTORS SERVICE, OR MOODY'S, AND STANDARD & POOR'S RATINGS SERVICES, OR S&P,
HAVE RECENTLY UPDATED OUR RATING OUTLOOK TO NEGATIVE, WHICH MAY IMPLY THAT OUR CREDIT RATINGS MAY BE DOWNGRADED. IF OUR CREDIT RATINGS ARE DOWNGRADED, OUR BORROWING COSTS WILL INCREASE,
• OUR ABILITY TO ACCESS DEBT CAPITAL AND THE COST OF OUR DEBT CAPITAL WILL DEPEND IN PART ON OUR CREDIT RATINGS. IF OUR CREDIT RATINGS ARE DOWNGRADED, WE MAY NOT BE ABLE TO ACCESS DEBT CAPITAL OR
THE DEBT CAPITAL WE CAN ACCESS MAY BE EXPENSIVE,
• WE MAY BE UNABLE TO REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE,
• THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOANS MAY BE INCREASED TO UP TO $2.5 BILLION ON A COMBINED BASIS IN CERTAIN CIRCUMSTANCES; HOWEVER, INCREASING THE
MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOANS IS SUBJECT TO OUR OBTAINING ADDITIONAL COMMITMENTS FROM LENDERS, WHICH MAY NOT OCCUR,
• WE HAVE THE OPTION TO EXTEND THE MATURITY DATE OF OUR REVOLVING CREDIT FACILITY UPON PAYMENT OF A FEE AND MEETING OTHER CONDITIONS; HOWEVER, THE APPLICABLE CONDITIONS MAY NOT BE MET,
• THE BUSINESS AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN US AND RMR LLC HAVE CONTINUING 20 YEAR TERMS. HOWEVER, THOSE AGREEMENTS PERMIT EARLY TERMINATION IN CERTAIN CIRCUMSTANCES.
ACCORDINGLY, WE CANNOT BE SURE THAT THESE AGREEMENTS WILL REMAIN IN EFFECT FOR CONTINUING 20 YEAR TERMS,
• WE BELIEVE THAT OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING RMR LLC, RMR INC., SIR, AIC AND OTHERS AFFILIATED WITH THEM MAY BENEFIT US AND PROVIDE US WITH COMPETITIVE ADVANTAGES IN
OPERATING AND GROWING OUR BUSINESS. HOWEVER, THE ADVANTAGES WE BELIEVE WE MAY REALIZE FROM THESE RELATIONSHIPS MAY NOT MATERIALIZE,
• WE MAY FAIL TO EXECUTE SUCCESSFULLY ON THE EXPANDED BUSINESS STRATEGY OR INCREASED SCALE RESULTING FROM THE FPO TRANSACTION AND THEREFORE MAY NOT REALIZE THE BENEFITS WE EXPECT FROM THE
FPO TRANSACTION,
• SIR MAY REDUCE THE AMOUNT OF ITS DISTRIBUTIONS TO ITS SHAREHOLDERS, INCLUDING US,
• RMR INC. MAY REDUCE THE AMOUNT OF ITS DISTRIBUTIONS TO ITS SHAREHOLDERS, INCLUDING US,
• WE MAY BE UNABLE TO SELL OUR SIR COMMON SHARES FOR AN AMOUNT EQUAL TO OUR CARRYING VALUE OF THOSE SHARES AND ANY SUCH SALE MAY BE AT A DISCOUNT TO MARKET PRICE BECAUSE OF THE LARGE SIZE OF
OUR SIR HOLDINGS OR OTHERWISE; WE MAY REALIZE A LOSS ON OUR INVESTMENT IN OUR SIR SHARES, AND
• AS OF DECEMBER 31, 2017, WE HAVE ESTIMATED UNSPENT LEASING RELATED OBLIGATIONS OF $31.3 MILLION. OUR UNSPENT LEASING RELATED OBLIGATIONS MAY COST MORE OR LESS AND MAY TAKE LONGER TO COMPLETE
THAN WE CURRENTLY EXPECT, AND WE MAY INCUR INCREASED AMOUNTS FOR THESE AND SIMILAR PURPOSES IN THE FUTURE.
CURRENTLY UNEXPECTED RESULTS COULD OCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH ARE BEYOND OUR CONTROL, SUCH AS CHANGES IN GOVERNMENT TENANTS’ NEEDS FOR LEASED SPACE, ACTS OF
TERRORISM, NATURAL DISASTERS OR CHANGES IN CAPITAL MARKETS OR THE ECONOMY GENERALLY.
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION "RISK FACTORS" IN OUR PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES
OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING STATEMENTS. OUR FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017CORPORATE INFORMATION 5
One Memphis Place, Memphis, TN
Square Feet: 204,694
Primary Agency Occupant: U.S. Courts
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
COM
PAN
Y PROFIL
E
6
COMPANY PROFILE
The Company:
Government Properties Income Trust, or GOV, we or us, is a real estate investment trust, or REIT, which
primarily owns properties located throughout the United States that are majority leased to the U.S.
Government and other government tenants and office properties in the metropolitan Washington, D.C. market
area that are leased to government and private sector tenants. The majority of our properties are office
buildings. As of December 31, 2017, we also own 24.9 million common shares, or approximately 27.8% of
the then outstanding common shares, of Select Income REIT (Nasdaq: SIR), or SIR, a REIT which owns
properties that are primarily leased to single tenants. We have been investment grade rated since 2010,
and we are included in the S&P Small Cap 600 Index, the Russell 2000® index and the MSCI US REIT
index.
Management:
GOV is managed by The RMR Group LLC, the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR).
RMR is an alternative asset management company that was founded in 1986 to manage real estate
companies and related businesses. RMR primarily provides management services to four publicly owned
equity REITs and three real estate related operating businesses. In addition to managing GOV, RMR manages
Hospitality Properties Trust, a REIT that owns hotels and travel centers, Senior Housing Properties Trust, a
REIT that primarily owns healthcare, senior living and medical office buildings, SIR, a REIT that owns
properties that are primarily leased to single tenants, and Industrial Logistics Properties Trust, a REIT that
owns and leases industrial and logistics properties. RMR also provides management services to
TravelCenters of America LLC, a publicly traded operator of travel centers along the U.S. Interstate Highway
System, convenience stores and restaurants, Five Star Senior Living Inc., a publicly traded operator of senior
living communities, and Sonesta International Hotels Corporation, a privately owned franchisor and operator
of hotels and cruise ships. RMR also manages publicly traded securities of real estate companies, a publicly
traded mortgage REIT and private commercial real estate debt funds through wholly owned SEC registered
investment advisory subsidiaries. As of December 31, 2017, RMR had $30.0 billion of real estate assets
under management and the combined RMR managed companies had approximately $11 billion of annual
revenues, over 1,400 properties and approximately 52,000 employees. We believe that being managed by
RMR is a competitive advantage for GOV because of RMR’s depth of management and experience in the
real estate industry. We also believe RMR provides management services to us at costs that are lower than
we would have to pay for similar quality services.
Corporate Headquarters:
Two Newton Place
255 Washington Street, Suite 300
Newton, MA 02458-1634
(t) (617) 219-1440
(f) (617) 219-1441
Stock Exchange Listing:
Nasdaq
Trading Symbols:
Common Shares: GOV
Senior Unsecured Notes due 2046: GOVNI
Issuer Ratings:
Moody’s: Baa3
Standard & Poor’s: BBB-
(1) Excludes two properties (three buildings) owned by
unconsolidated joint ventures.
(2) See page 23 for the calculation of Normalized FFO available for
common shareholders and a reconciliation of net loss available
for common shareholders determined in accordance with U.S.
generally accepted accounting principles, or GAAP, to this amount.
Total consolidated properties (1) 108 (167 buildings)
Total sq. ft. (1) 17,499
Percent leased (1) 94.2%
Q4 2017 total rental income $ 107,170
Q4 2017 net loss available for common
shareholders $ (18,266)
Q4 2017 Normalized FFO available for
common shareholders (2) $ 49,184
Key data (as of 12/31/2017):
(dollars and sq. ft. in 000s)
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
INVES
TOR INFORM
ATIO
N
7
INVESTOR INFORMATION
Board of Trustees
Barbara D. Gilmore John L. Harrington Elena Poptodorova
Independent Trustee Independent Trustee Independent Trustee
Adam D. Portnoy Jeffrey P. Somers
Managing Trustee Independent Trustee
Senior Management
David M. Blackman Mark L. Kleifges
President and Chief Operating Officer Chief Financial Officer and Treasurer
Contact Information
Investor Relations Inquiries
Government Properties Income Trust Financial inquiries should be directed to Mark L. Kleifges,
Two Newton Place Chief Financial Officer and Treasurer, at (617) 219-1440
255 Washington Street, Suite 300 or mkleifges@rmrgroup.com.
Newton, MA 02458-1634
(t) (617) 219-1440 Investor and media inquiries should be directed to
(f) (617) 796-8267 Christopher Ranjitkar, Director, Investor Relations, at (617) 219-1473 or
(e-mail) info@govreit.com cranjitkar@rmrgroup.com.
(website) www.govreit.com
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
RESEARCH COVERAG
E
8
RESEARCH COVERAGE
Equity Research Coverage
Rating Agencies
Moody’s Investors Service Standard & Poor’s
Lori Marks Sarah Sherman
Lori.marks@moodys.com sarah.sherman@standardandpoors.com
(212) 553-1653 (212) 438-3550
GOV is followed by the analysts and its credit is rated by the rating agencies listed above. Please note that any opinions, estimates
or forecasts regarding GOV’s performance made by these analysts or agencies do not represent opinions, forecasts or predictions
of GOV or its management. GOV does not by its reference above imply its endorsement of or concurrence with any information,
conclusions or recommendations provided by any of these analysts or agencies.
Bank of America Merrill Lynch Research D.A. Davidson & Co.
James Feldman James Lykins
James.Feldman@baml.com jlykins@dadco.com
(646) 855-5808 503-603-3041
FBR & Co. Jeffries & Company, Inc.
Bryan Maher Jonathan Petersen
bmaher@fbr.com jpetersen@jefferies.com
(646) 885-5423 (212) 284-1705
JMP Securities Morgan Stanley
Mitch Germain Sumit Sharma
mgermain@jmpsecurities.com Sumit.Sharma@morganstanley.com
(212) 906-3546 (212) 761-7567
RBC Capital Markets
Mike Carroll
Michael.Carroll@rbccm.com
(440) 715-2649
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
FINANCIALS
9960 Maryland Drive, Richmond, VA
Square Feet: 173,932
Agency Occupant: The Commonwealth of Virginia
9
625 Indiana Avenue, Washington, DC
Square Feet: 160,897
Primary Agency Occupant: U.S. Courts 9
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
KE
Y FINANCIA
L D
AT
A
10
KEY FINANCIAL DATA
(dollar and share amounts in thousands, except per share data)
(1) Total gross assets is total assets plus accumulated depreciation.
(2) See page 20 for the calculation of consolidated property NOI and a reconciliation of net income (loss) available for common shareholders determined in accordance with GAAP to that amount.
(3) See page 22 for the calculation of Adjusted EBITDA and a reconciliation of net income (loss) determined in accordance with GAAP to that amount.
(4) See page 23 for the calculation of FFO available for common shareholders and Normalized FFO available for common shareholders and a reconciliation of net income (loss) available for common shareholders determined
in accordance with GAAP to those amounts.
(5) Annualized distribution yield is the annualized distribution paid during the period divided by the closing price of our common shares at the end of the period.
As of and for the Three Months Ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
Selected Balance Sheet Data:
Total gross assets (1) $ 4,045,413 $ 3,868,036 $ 2,685,114 $ 2,685,291 $ 2,681,870
Total assets $ 3,703,565 $ 3,536,967 $ 2,365,109 $ 2,377,050 $ 2,385,066
Total liabilities $ 2,353,026 $ 2,159,440 $ 1,456,430 $ 1,448,480 $ 1,450,062
Total shareholders' equity $ 1,330,043 $ 1,377,527 $ 908,679 $ 928,570 $ 935,004
Selected Income Statement Data:
Rental income $ 107,170 $ 70,179 $ 69,887 $ 69,296 $ 66,030
Net income (loss) available for common shareholders $ (18,266) $ 10,989 $ 11,677 $ 7,415 $ 12,065
Consolidated property NOI (2) $ 66,093 $ 41,042 $ 42,587 $ 42,521 $ 39,939
Adjusted EBITDA (3) $ 73,458 $ 51,916 $ 52,160 $ 51,893 $ 49,424
FFO available for common shareholders (4) $ 49,801 $ 40,357 $ 41,282 $ 37,713 $ 40,637
Normalized FFO available for common shareholders (4) $ 49,184 $ 39,602 $ 42,412 $ 39,899 $ 41,533
Per Share Data (basic and diluted):
Net income (loss) available for common shareholders $ (0.18) $ 0.11 $ 0.16 $ 0.10 $ 0.17
FFO available for common shareholders (4) $ 0.50 $ 0.42 $ 0.58 $ 0.53 $ 0.57
Normalized FFO available for common shareholders (4) $ 0.50 $ 0.41 $ 0.60 $ 0.56 $ 0.58
Dividends:
Annualized distributions paid per share during period $ 1.72 $ 1.72 $ 1.72 $ 1.72 $ 1.72
Annualized distribution yield (at end of period) (5) 9.3% 9.2% 9.4% 8.2% 9.0%
Normalized FFO available for common shareholders payout ratio (4) 86.0% 104.9% 71.7% 76.8% 74.1%
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CONSOLID
ATED BALANCE SHEET
S
11
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
As of December 31,
2017 2016
ASSETS
Real estate properties:
Land $ 627,108 $ 267,855
Buildings and improvements 2,348,613 1,620,905
Total real estate properties, gross 2,975,721 1,888,760
Accumulated depreciation (341,848) (296,804)
Total real estate properties, net 2,633,873 1,591,956
Equity investment in Select Income REIT 467,499 487,708
Investment in unconsolidated joint ventures 50,202 —
Assets of discontinued operations — 12,541
Acquired real estate leases, net 351,872 124,848
Cash and cash equivalents 16,569 29,941
Restricted cash 3,111 530
Rents receivable, net 61,429 48,458
Deferred leasing costs, net 22,977 21,079
Other assets, net 96,033 68,005
Total assets $ 3,703,565 $ 2,385,066
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unsecured revolving credit facility $ 570,000 $ 160,000
Unsecured term loans, net 547,852 547,171
Senior unsecured notes, net 944,140 646,844
Mortgage notes payable, net 183,100 27,837
Liabilities of discontinued operations — 45
Accounts payable and other liabilities 89,440 54,019
Due to related persons 4,859 3,520
Assumed real estate lease obligations, net 13,635 10,626
Total liabilities 2,353,026 1,450,062
Commitments and contingencies
Preferred units of limited partnership 20,496 —
Shareholders’ equity:
Common shares of beneficial interest, $.01 par value: 150,000,000 and 100,000,000 shares
authorized, respectively, 99,145,921 and 71,177,906 shares issued and outstanding, respectively 991 712
Additional paid in capital 1,968,217 1,473,533
Cumulative net income 108,144 96,329
Cumulative other comprehensive income 60,427 26,957
Cumulative common distributions (807,736) (662,527)
Total shareholders’ equity 1,330,043 935,004
Total liabilities and shareholders’ equity $ 3,703,565 $ 2,385,066
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CONSOLID
ATED S
TA
TEMENTS OF INCOME (LOSS)
12
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(dollars and share amounts in thousands, except per share data)
(1) We report 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 expense reimbursements, tax escalations, parking revenues,
service income and other fixed and variable charges paid to us by our tenants, as well as the net effect of non-cash amortization of intangible lease assets and liabilities.
(2) We recorded a liability for the amount by which the estimated fair value for accounting purposes exceeded the price we paid for our investment in RMR Inc. common stock in June 2015. This liability is being amortized on a straight line basis through
December 31, 2035 as an allocated reduction to business management fees and property management fees expense, which are included in general and administrative and other operating expenses, respectively.
Three Months Ended December 31, Year Ended December 31,
2017 2016 2017 2016
Rental income $ 107,170 $ 66,030 $ 316,532 $ 258,180
Expenses:
Real estate taxes 12,962 7,893 37,942 30,703
Utility expenses 6,812 3,939 20,998 17,269
Other operating expenses 21,303 14,259 65,349 54,290
Depreciation and amortization 47,639 18,440 109,588 73,153
Loss on impairment of real estate 9,260 — 9,490 —
Acquisition related costs — 828 — 1,191
General and administrative 6,532 3,547 18,847 14,897
Total expenses 104,508 48,906 262,214 191,503
Operating income 2,662 17,124 54,318 66,677
Dividend income 304 304 1,216 971
Interest income 119 95 1,962 158
Interest expense (including net amortization of debt premiums and discounts
and debt issuance costs of $814, $808, $3,420 and $2,832, respectively) (21,807) (12,774) (65,406) (45,060)
Gain (loss) on early extinguishment of debt — — (1,715) 104
Net gain (loss) on issuance of shares by Select Income REIT — (2) 72 86
Income (loss) from continuing operations before income taxes,
equity in earnings of investees and gain on sale of real estate (18,722) 4,747 (9,553) 22,936
Income tax expense (36) (38) (101) (101)
Equity in earnings of investees 767 7,516 21,571 35,518
Income (loss) from continuing operations (17,991) 12,225 11,917 58,353
Income (loss) from discontinued operations — (160) 173 (589)
Income (loss) before gain on sale of real estate (17,991) 12,065 12,090 57,764
Gain on sale of real estate — — — 79
Net income (loss) (17,991) 12,065 12,090 57,843
Preferred units of limited partnership distributions (275) — (275) —
Net income (loss) available for common shareholders $ (18,266) $ 12,065 $ 11,815 $ 57,843
Weighted average common shares outstanding (basic) 99,040 71,079 84,633 71,050
Weighted average common shares outstanding (diluted) 99,040 71,079 84,653 71,071
Per common share amounts (basic and diluted):
Income (loss) from continuing operations $ (0.18) $ 0.17 $ 0.14 $ 0.82
Income (loss) from discontinued operations $ — $ — $ — $ (0.01)
Net income (loss) available for common shareholders $ (0.18) $ 0.17 $ 0.14 $ 0.81
Additional Data:
General and administrative expenses / rental income 6.09% 5.37% 5.95% 5.77%
General and administrative expenses / total assets (at end of period) 0.18% 0.15% 0.51% 0.62%
Non-cash straight line rent adjustments (1) $ 2,467 $ 902 $ 5,582 $ 2,691
Lease value amortization included in rental income (1) $ (901) $ (355) $ (2,764) $ (1,457)
Non-cash amortization included in other operating expenses (2) $ 121 $ 121 $ 484 $ 484
Non-cash amortization included in general and administrative expenses (2) $ 151 $ 151 $ 603 $ 603
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CONSOLID
ATED S
TA
TEMENTS OF CASH FLOW
S
13
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
Year Ended December 31,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,090 $ 57,843
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation 52,427 42,489
Net amortization of debt premiums and discounts and debt issuance costs 3,420 2,832
Gain on sale of real estate — (79)
(Gain) loss on early extinguishment of debt 1,715 (104)
Straight line rental income (5,582) (2,691)
Amortization of acquired real estate leases 56,174 29,003
Amortization of deferred leasing costs 3,802 3,265
Other non-cash expenses, net 300 284
Loss on impairment of real estate 9,490 —
Increase in carrying value of property included in discontinued operations (619) —
Equity in earnings of investees (21,571) (35,518)
Net gain on issuance of shares by Select Income REIT (72) (86)
Distributions of earnings from Select Income REIT 18,640 32,425
Change in assets and liabilities:
Restricted cash (1,563) 492
Deferred leasing costs (5,017) (10,196)
Rents receivable (4,990) 1,670
Other assets 1,368 25
Accounts payable and accrued expenses 11,696 1,970
Due to related persons 1,339 634
Net cash provided by operating activities 133,047 124,258
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions and deposits (1,188,030) (200,331)
Real estate improvements (45,940) (32,999)
Distributions in excess of earnings from Select Income REIT 32,192 17,910
Distributions in excess of earnings from our unconsolidated joint ventures 482 —
Proceeds from sale of properties, net 15,083 263
Net cash used in investing activities (1,186,213) (215,157)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgage notes payable (11,909) (107,933)
Proceeds from issuance of senior notes, after discounts 297,954 300,235
Proceeds from issuance of common shares, net 493,866 —
Borrowings on unsecured revolving credit facility 645,000 399,000
Repayments on unsecured revolving credit facility (235,000) (356,000)
Payment of debt issuance costs (4,644) (544)
Repurchase of common shares (264) (337)
Distributions to common shareholders (145,209) (122,366)
Net cash provided by financing activities 1,039,794 112,055
Increase (decrease) in cash and cash equivalents (13,372) 21,156
Cash and cash equivalents at beginning of period 29,941 8,785
Cash and cash equivalents at end of period $ 16,569 $ 29,941
Supplemental cash flow information:
Interest paid $ 55,048 $ 41,139
Income taxes paid $ 117 $ 111
Non-cash investing activities:
Sale of real estate $ — $ 3,600
Mortgage note receivable related to sale of real estate $ — $ (3,600)
Working capital assumed $ (1,596) $ —
Non-cash financing activities:
Assumption of mortgage debt $ 167,548 $ —
Preferred units of limited partnership issued $ 20,221 $ —
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
DEBT SUMMA
RY
14
DEBT SUMMARY (1)
(dollars in thousands)
As of December 31, 2017
(1) The data presented exclude two mortgage notes with an aggregate principal balance of $82,000, which are secured by two properties (three buildings) owned by two unconsolidated joint ventures in which we own 50% and 51% interests. See page 19 for
additional information regarding these unconsolidated joint ventures and the related mortgage notes.
(2) Reflects the interest rate stated in, or determined pursuant to, the contract terms.
(3) Includes the effect of interest rate protection and mark to market accounting for certain mortgages and premiums or discounts on senior unsecured notes. Excludes upfront transaction costs.
(4) Principal balances exclude unamortized premiums, discounts and issuance costs related to these debts. Our total consolidated debt as of December 31, 2017, net of unamortized premiums and discounts and certain issuance costs totaling $18,055, was
$2,245,092.
(5) We are required to pay interest on borrowings under our $750,000 revolving credit facility at an annual rate of LIBOR plus a premium of 125 basis points. We also pay a facility fee of 25 basis points per annum on the total amount of lending commitments.
Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings. The coupon rate and interest rate listed above are as of December 31, 2017. Subject to meeting certain conditions and payment of a fee, we
may extend the maturity date to January 31, 2020.
(6) We are required to pay interest on the amounts outstanding under our $300,000 term loan at an annual rate of LIBOR plus a premium of 140 basis points, subject to adjustment based on changes to our credit ratings. The coupon rate and interest rate
listed above are as of December 31, 2017. Our $300,000 term loan is prepayable without penalty at any time.
(7) We are required to pay interest on the amounts outstanding under our $250,000 term loan at an annual rate of LIBOR plus a premium of 180 basis points, subject to adjustment based on changes to our credit ratings. The coupon rate and interest rate
listed above are as of December 31, 2017. Our $250,000 term loan is prepayable without penalty at any time.
(8) The maximum aggregate borrowing availability under the credit agreement governing our revolving credit facility and term loans may be increased to up to $2,500,000 on a combined basis in certain circumstances.
Coupon Interest Principal Maturity Due at Years to
Rate (2) Rate (3) Balance (4) Date Maturity Maturity
Unsecured Floating Rate Debt:
$750,000 unsecured revolving credit facility (5) (8) 2.739% 2.739% $ 570,000 1/31/2019 $ 570,000 1.1
$300,000 unsecured term loan (6) (8) 2.969% 2.969% 300,000 3/31/2020 300,000 2.2
$250,000 unsecured term loan (7) (8) 3.369% 3.369% 250,000 3/31/2022 250,000 4.2
Subtotal / weighted average 2.941% 2.941% 1,120,000 1,120,000 2.1
Unsecured Fixed Rate Debt:
Senior unsecured notes due 2019 3.750% 3.930% 350,000 8/15/2019 350,000 1.6
Senior unsecured notes due 2022 4.000% 4.000% 300,000 7/15/2022 300,000 4.5
Senior unsecured notes due 2046 5.875% 5.875% 310,000 5/1/2046 310,000 28.4
Subtotal / weighted average 4.514% 4.580% 960,000 960,000 11.2
Secured Fixed Rate Debt:
Mortgage debt - One building in Tampa, FL 7.000% 5.150% 8,221 3/1/2019 7,890 1.2
Mortgage debt - One building in Washington, DC 5.720% 3.690% 34,474 7/1/2020 32,462 2.5
Mortgage debt - One building in Chesapeake, VA 4.260% 4.190% 3,173 11/1/2020 2,635 2.8
Mortgage debt - One building in Lakewood, CO 8.150% 6.150% 4,045 3/1/2021 118 3.2
Mortgage debt - One building in Fairfax, VA 5.877% 5.877% 13,693 8/11/2021 12,702 3.6
Mortgage debt - One building in Washington, DC 4.220% 4.190% 27,870 7/1/2022 24,668 4.5
Mortgage debt - One building in Washington, DC 4.800% 4.190% 24,891 6/1/2023 22,584 5.4
Mortgage debt - One building in Washington, DC 4.050% 4.440% 66,780 9/1/2030 60,566 12.7
Subtotal / weighted average 4.855% 4.400% 183,147 163,625 7.0
Total / weighted average 3.763% 3.754% $ 2,263,147 $ 2,243,625 6.3
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
DEBT M
ATURIT
Y SCHEDUL
E
15
DEBT MATURITY SCHEDULE (1)
(dollars in thousands)
As of December 31, 2017
(1) The data presented exclude two mortgage notes with an aggregate principal balance of $82,000, which are secured by two properties (three buildings) owned by two unconsolidated joint
ventures in which we own 50% and 51% interests. See page 19 for additional information regarding these unconsolidated joint ventures and the related mortgage notes.
(2) Principal balances are the amounts actually payable pursuant to the applicable agreements. Our carrying values may differ from these amounts because of the effect of unamortized
premiums and discounts and certain issuance costs related to these debts.
(3) Our total consolidated debt as of December 31, 2017, net of unamortized premiums and discounts and certain issuance costs totaling $18,055, was $2,245,092.
(4) Represents amounts outstanding under our $750,000 revolving credit facility at December 31, 2017. Subject to meeting certain conditions and payment of a fee, we may extend the maturity
date of our revolving credit facility by one year to January 31, 2020.
(5) Represents the outstanding balance of our $300,000 term loan at December 31, 2017. We may prepay this term loan without penalty at any time.
(6) Represents the outstanding balance of our $250,000 term loan at December 31, 2017. We may prepay this term loan without penalty at any time.
Unsecured Unsecured Secured
Floating Fixed Rate Fixed Rate
Year Rate Debt (2) Debt (2) Debt (2) Total (3)
2018 $ — $ — $ 3,672 $ 3,672
2019 570,000 (4) 350,000 11,541 931,541
2020 300,000 (5) — 38,433 338,433
2021 — — 14,420 14,420
2022 250,000 (6) 300,000 25,518 575,518
2023 — — 22,783 22,783
2030 — — 66,780 66,780
2046 — 310,000 — 310,000
Total $ 1,120,000 $ 960,000 $ 183,147 $ 2,263,147
Percent of total debt 49.5% 42.4% 8.1% 100.0%
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
LEVERAGE R
ATIOS, COVERAGE R
ATIOS
AND PUBLIC DEBT COVENANT
S
16
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS
(1) Debt amounts are net of unamortized premiums, discounts and certain issuance costs. The amounts above exclude two mortgage notes with an aggregate principal balance of $82,000, which are secured by two properties
(three buildings) owned by two unconsolidated joint ventures in which we own 50% and 51% interests. See page 19 for more information regarding these joint ventures.
(2) Total gross assets is total assets plus accumulated depreciation.
(3) As of December 31, 2017, we owned 24,918,421 common shares of SIR. The closing price of SIR's common shares on The Nasdaq Stock Market LLC on December 31, 2017 was $25.13 per share.
(4) Total market capitalization is total consolidated debt plus the market value of our common shares at the end of each period.
(5) See page 22 for the calculation of Adjusted EBITDA and a reconciliation of net income (loss) determined in accordance with GAAP to this amount.
(6) Adjusted total assets and total unencumbered assets include original cost of real estate assets calculated in accordance with GAAP before impairment writedowns, if any, the lower of cost or market value of our investment
in SIR and exclude depreciation and amortization, accounts receivable and intangible assets.
(7) Consolidated income available for debt service is earnings from operations excluding interest expense, depreciation and amortization, loss on asset impairment, unrealized appreciation on assets held for sale, gains and
losses on early extinguishment of debt, gains and losses on sales of properties, gains or losses on equity issuance by SIR and equity earnings in SIR and including distributions received from SIR and our unconsolidated
joint ventures, if any, determined together with debt service for the period presented.
As of and for the Three Months Ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
Leverage Ratios:
Total consolidated debt (book value) (1) / total gross assets (2) 55.5% 53.8% 51.3% 51.5% 51.5%
Total consolidated debt (book value) (1) / total gross assets (2) with
SIR common shares at market value (3) 53.4% 52.4% 49.1% 48.6% 49.0%
Total consolidated debt (book value) (1) / total market capitalization (4) 55.0% 52.8% 51.4% 48.1% 50.4%
Consolidated secured debt (book value) (1) / total assets 4.9% 0.8% 1.1% 1.2% 1.2%
Variable rate debt (book value) (1) / total consolidated debt (book value) (1) 49.8% 53.4% 51.0% 51.2% 51.2%
Coverage Ratios:
Adjusted EBITDA (5) / interest expense 3.4x 3.2x 3.7x 3.8x 3.9x
Total consolidated debt (book value) (1) / Annualized Adjusted EBITDA (5) 7.6x 10.0x 6.6x 6.7x 7.0x
Public Debt Covenants:
Total debt / adjusted total assets (6) - allowable maximum 60.0% 52.8% 51.5% 47.9% 47.6% 48.2%
Secured debt / adjusted total assets (6) - allowable maximum 40.0% 4.2% 0.7% 0.9% 0.9% 1.0%
Consolidated income available for debt service (7) / debt service - required minimum 1.50x 3.4x 3.9x 4.0x 4.1x 4.2x
Total unencumbered assets (6) to unsecured debt - required minimum 150.0% 181.9% 193.7% 208.1% 209.4% 207.2%
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
SUMMA
RY
OF CAPI
TA
L EXPENDITURE
S
17
SUMMARY OF CAPITAL EXPENDITURES (1)
(dollars and sq. ft. in thousands, except per sq. ft. data)
(1) The data presented exclude capital expenditures of our two properties (three buildings) owned by our two unconsolidated joint ventures.
(2) Tenant improvements include capital expenditures used to improve tenants' space or amounts paid directly to tenants to improve their space.
(3) Leasing costs include leasing related costs, such as brokerage commissions and tenant inducements.
(4) Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.
(5) Development, redevelopment and other activities generally include (i) capital expenditures that are identified at the time of a property acquisition and incurred within a short
time period after acquiring the property, and (ii) capital expenditure projects that reposition a property or result in new sources of revenue.
(6) Rentable square footage is subject to changes when space is re-measured or re-configured for tenants.
For the Three Months Ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
Tenant improvements (2) $ 9,358 $ 3,213 $ 1,076 $ 2,403 $ 3,550
Leasing costs (3) 1,745 1,993 971 1,087 1,947
Building improvements (4) 6,552 2,640 4,465 1,778 2,570
Recurring capital expenditures 17,655 7,846 6,512 5,268 8,067
Development, redevelopment and other activities (5) 5,191 3,132 6,949 6,281 3,597
Total capital expenditures $ 22,846 $ 10,978 $ 13,461 $ 11,549 $ 11,664
Average sq. ft. during period (6) 17,443 11,516 11,514 11,477 11,196
Building improvements per average sq. ft. during period $ 0.38 $ 0.23 $ 0.39 $ 0.15 $ 0.23
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
PROPERT
Y
ACQUISITION
AND DISPOSITION INFORM
ATION SINCE JANUA
RY
1, 201
7
18
PROPERTY ACQUISITION AND DISPOSITION INFORMATION SINCE JANUARY 1, 2017
(dollars and sq. ft. in thousands, except per sq. ft. data)
Acquisitions: Weighted
Average
Purchase Remaining
Date Number of Number of Purchase Price (1) / Cap Lease Percent
Acquired City and State Properties Buildings Sq. Ft. Price (1) Sq. Ft. Rate (2) Term (3) Leased (4) Major Tenant
1/3/2017 Manassas, VA 1 1 69 $ 12,620 $ 183 8.6% 9.1 100.0% Prince William County
10/2/2017 Various (5) 35 72 6,028 1,370,888 227 7.0% 4.7 93.3% 422 tenants
Total / Weighted Average 36 73 6,097 $ 1,383,508 $ 227 7.0% 4.7 93.4%
(1) Represents the purchase price, including assumed debt, if any, and excludes acquisition costs, amounts necessary to adjust assumed liabilities to their fair values and purchase
price allocations to intangibles.
(2) Represents the ratio of (x) annual straight line rental income, excluding the impact of above and below market lease amortization, based on existing leases at the acquisition date,
less estimated annual property operating expenses as of the date of acquisition, excluding depreciation and amortization expense, to (y) the acquisition purchase price, including
the principal amount of assumed debt, if any, and excluding acquisition related costs.
(3) Average remaining lease term in years weighted based on rental income as of the date of acquisition.
(4) Percent leased as of the date of acquisition.
(5) On October 2, 2017, we acquired FPO including 35 office properties (72 buildings) located in Maryland, Washington, D.C. and Virginia, and two properties which are owned by two
unconsolidated joint ventures in which we acquired FPO's 50% and 51% interests. The purchase price presented for the FPO Transaction represents our total consideration paid
including transaction related costs.
Dispositions:
Date Number of Number of Sale
Sold City and State Properties Buildings Sq. Ft. Price (1)
8/31/2017 Falls Church, VA 1 1 165 $ 13,523
10/5/2017 Albuquerque, NM 1 1 29 2,000
2 2 194 $ 15,523
(1) Represents the gross contract sales price and excludes closing costs.
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
INVESTMENT IN UNCONSOLID
ATED JOINT VENTURE
S
19
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
(dollars in thousands)
(1) Lease term is weighted based on annualized rental income. Annualized rental income is calculated using the annualized contractual base rents from our tenants pursuant to our lease agreements as of December 31,
2017, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization.
(2) Includes the effect of interest rate protection and mark to market accounting.
(3) Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the part of the joint venture arrangement interests we do not own.
(4) Reflects our proportionate share of the principal debt balances based on our ownership percentage of the respective joint venture; none of the debt is recourse to us.
(5) The mortgage loan requires interest-only payments through December 2024, at which time the loan requires principal and interest payments through its maturity date.
(6) Reflects our proportionate share of operating results for the three months and year ended December 31, 2017 based on our ownership percentage of the respective joint ventures. We acquired our interests in these joint
ventures on October 2, 2017, when we completed the FPO Transaction.
(7) Includes depreciation and amortization and interest expense, net of other income.
(8) We report 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 expense reimbursements,
tax escalations, parking revenues, service income and other fixed and variable charges paid to us by our tenants, as well as the net effect of non-cash amortization of intangible lease assets and liabilities.
Unconsolidated Joint Ventures:
GOV
Ownership
GOV Investment
at December 31,
2017 Property Type
Number of
Buildings Location Square Feet
Percent Leased
at December 31,
2017
Weighted Average
Lease Term (1)
Prosperity Metro Plaza 51% $ 27,888 Office 2 Fairfax, VA 328,456 100.0% 4.4 years
1750 H Street, NW 50% 22,314 Office 1 Washington, DC 115,411 100.0% 3.3 years
Total / Weighted Average $ 50,202 3 443,867 100.0% 4.0 years
Outstanding Unconsolidated Debt:
GOV
Ownership Interest Rate (2)
Principal Balance
at December 31,
2017 (3)
Annualized Debt
Service Maturity Date
Balance at
Maturity (3)
GOV Share of
Current Principal
Balance (4)
Prosperity Metro Plaza (5) 51% 4.090% $ 50,000 $ 2,045 12/1/2029 $ 45,246 $ 25,500
1750 H Street, NW 50% 3.690% 32,000 1,181 8/1/2024 32,000 16,000
Total / Weighted Average 3.934% $ 82,000 $ 3,226 $ 77,246 $ 41,500
For the Three Months Ended December 31, 2017 For the Year Ended December 31, 2017
Results of Operations - Unconsolidated Joint Ventures: (6)
Prosperity Metro
Plaza
1750 H Street,
NW Total
Prosperity Metro
Plaza
1750 H Street,
NW Total
Equity in losses from affiliates $ (417) $ (204) $ (621) $ (417) $ (204) $ (621)
Other expenses, net (7) 1,786 827 2,613 1,786 827 2,613
NOI 1,369 623 1,992 1,369 623 1,992
Lease value amortization included in rental income (8) (18) (29) (47) (18) (29) (47)
Non-cash straight-line rent adjustments included in rental income (8) 13 34 47 13 34 47
Cash Basis NOI $ 1,364 $ 628 $ 1,992 $ 1,364 $ 628 $ 1,992
Distributions received $ — $ 482 $ 482 $ — $ 482 $ 482
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CALCUL
ATION OF CONSOLID
ATED PROPERT
Y NET OPER
ATING INCOME (NOI)
AN
D
CONSOLID
ATED PROPERT
Y CASH BASIS NOI
20
CALCULATION OF CONSOLIDATED PROPERTY NET OPERATING INCOME (NOI) AND CONSOLIDATED PROPERTY CASH BASIS NOI (1)
(dollars in thousands)
(1) See Definitions of Certain Non-GAAP Financial Measures on page 24 for the definitions of Consolidated Property NOI and Consolidated Property Cash Basis NOI, a description of why we believe they are appropriate supplemental measures and a description
of how we use these measures. The data presented exclude two properties (three buildings) owned by our two unconsolidated joint ventures.
(2) Excludes one property (one building) classified as discontinued operations which was sold on August 31, 2017.
(3) We report 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 expense reimbursements, tax escalations, parking revenues,
service income and other fixed and variable charges paid to us by our tenants, as well as the net effect of non-cash amortization of intangible lease assets and liabilities.
(4) We recorded a liability for the amount by which the estimated fair value for accounting purposes exceeded the price we paid for our investment in RMR Inc. 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 expense, which are included in property operating expenses.
For the Three Months Ended For the Year Ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016 12/31/2017 12/31/2016
Calculation of Consolidated Property NOI and Consolidated Property Cash Basis NOI (2):
Rental income (3) $ 107,170 $ 70,179 $ 69,887 $ 69,296 $ 66,030 $ 316,532 $ 258,180
Property operating expenses (41,077) (29,137) (27,300) (26,775) (26,091) (124,289) (102,262)
Consolidated Property NOI 66,093 41,042 42,587 42,521 39,939 192,243 155,918
Non-cash straight line rent adjustments included in rental income (3) (2,467) (711) (1,104) (1,300) (902) (5,582) (2,691)
Lease value amortization included in rental income (3) 901 619 617 627 355 2,764 1,457
Non-cash amortization included in property operating expenses (4) (121) (121) (121) (121) (121) (484) (484)
Consolidated Property Cash Basis NOI $ 64,406 $ 40,829 $ 41,979 $ 41,727 $ 39,271 $ 188,941 $ 154,200
Reconciliation of Net Income (Loss) Available for Common Shareholders to Consolidated Property NOI and Consolidated Property Cash Basis NOI:
Net income (loss) available for common shareholders $ (18,266) $ 10,989 $ 11,677 $ 7,415 $ 12,065 $ 11,815 $ 57,843
Preferred units of limited partnership distributions 275 — — — — 275 —
Net income (loss) (17,991) 10,989 11,677 7,415 12,065 12,090 57,843
Gain on sale of real estate — — — — — — (79)
Income (loss) before gain on sale of real estate (17,991) 10,989 11,677 7,415 12,065 12,090 57,764
Income (loss) from discontinued operations — (462) 145 144 160 (173) 589
Income (loss) from continuing operations (17,991) 10,527 11,822 7,559 12,225 11,917 58,353
Equity in earnings of investees (767) (9,484) (8,581) (2,739) (7,516) (21,571) (35,518)
Income tax expense 36 22 25 18 38 101 101
Net (gain) loss on issuance of shares by SIR — (51) (21) — 2 (72) (86)
(Gain) loss on early extinguishment of debt — 1,715 — — — 1,715 (104)
Interest expense 21,807 16,055 13,963 13,581 12,774 65,406 45,060
Interest income (119) (1,715) (67) (61) (95) (1,962) (158)
Dividend income (304) (304) (304) (304) (304) (1,216) (971)
Operating income 2,662 16,765 16,837 18,054 17,124 54,318 66,677
General and administrative 6,532 3,266 5,087 3,962 3,547 18,847 14,897
Acquisition related costs — — — — 828 — 1,191
Loss on impairment of real estate 9,260 230 — — — 9,490 —
Depreciation and amortization 47,639 20,781 20,663 20,505 18,440 109,588 73,153
Consolidated Property NOI 66,093 41,042 42,587 42,521 39,939 192,243 155,918
Non-cash amortization included in property operating expenses (4) (121) (121) (121) (121) (121) (484) (484)
Lease value amortization included in rental income (3) 901 619 617 627 355 2,764 1,457
Non-cash straight line rent adjustments included in rental income (3) (2,467) (711) (1,104) (1,300) (902) (5,582) (2,691)
Consolidated Property Cash Basis NOI $ 64,406 $ 40,829 $ 41,979 $ 41,727 $ 39,271 $ 188,941 $ 154,200
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CALCUL
ATION OF SAME PROPERT
Y NOI
AND CASH BASIS NOI
21
CALCULATION OF SAME PROPERTY NOI AND CASH BASIS NOI (1)
(dollars in thousands)
(1) See Definitions of Certain Non-GAAP Financial Measures on page 24 for the definitions of Consolidated Property NOI and Consolidated Property Cash Basis NOI, a description of
why we believe they are appropriate supplemental measures and a description of how we use these measures.
(2) Based on consolidated properties we owned as of December 31, 2017 and which we owned continuously since October 1, 2016.
(3) Based on consolidated properties we owned as of December 31, 2017 and which we owned continuously since January 1, 2016.
(4) Excludes one property (one building) classified as discontinued operations which was sold August 31, 2017.
(5) We report 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 expense reimbursements, tax escalations, parking revenues, service income and other fixed and variable charges paid to us by our tenants, as well as the net effect of
non-cash amortization of intangible lease assets and liabilities.
(6) We recorded a liability for the amount by which the estimated fair value for accounting purposes exceeded the price we paid for our investment in RMR Inc. 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 expense, which are included in
property operating expenses.
For the Three Months Ended (2) For the Year Ended (3)
12/31/2017 12/31/2016 12/31/2017 12/31/2016
Reconciliation of Consolidated Property NOI to Same Property NOI: (4)
Rental income $ 107,170 $ 66,030 $ 316,532 $ 258,180
Property operating expenses (41,077) (26,091) (124,289) (102,262)
Consolidated Property NOI 66,093 39,939 192,243 155,918
Less: NOI of properties not included in same property results (26,114) (331) (40,422) (4,995)
Same property NOI $ 39,979 $ 39,608 $ 151,821 $ 150,923
Calculation of Same Property Cash Basis NOI:
Same property NOI $ 39,979 $ 39,608 $ 151,821 $ 150,923
Add: Lease value amortization included in rental income (5) 377 354 1,678 1,496
Less: Non-cash straight line rent adjustments included in rental income (5) (142) (879) (2,464) (2,362)
Non-cash amortization included in property operating expenses (6) (121) (121) (483) (483)
Same property Cash Basis NOI $ 40,093 $ 38,962 $ 150,552 $ 149,574
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CALCUL
ATION OF EBITD
A
AND
ADJUSTED EBITD
A
22
CALCULATION OF EBITDA AND ADJUSTED EBITDA (1)
(dollars in thousands)
(1) See Definitions of Certain Non-GAAP Financial Measures on page 24 for the definitions of EBITDA and Adjusted EBITDA and a description of why we believe they are
appropriate supplemental measures.
(2) Amounts represent equity compensation awarded to our trustees, officers and certain other employees of RMR LLC.
(3) 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) 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), we do not include such expense in the calculation of Adjusted EBITDA until the fourth quarter, when the amount
of the business management incentive fee expense for the calendar year, if any, is determined.
For the Three Months Ended For the Year Ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016 12/31/2017 12/31/2016
Net income (loss) $ (17,991) $ 10,989 $ 11,677 $ 7,415 $ 12,065 $ 12,090 $ 57,843
Add: Interest expense 21,807 16,055 13,963 13,581 12,774 65,406 45,060
Income tax expense 36 22 25 18 38 101 101
Depreciation and amortization 47,639 20,781 20,663 20,505 18,440 109,588 73,153
EBITDA 51,491 47,847 46,328 41,519 43,317 187,185 176,157
Add (less): Acquisition related costs — — — — 828 — 1,191
General and administrative expense paid in common shares (2) 209 432 459 277 55 1,377 1,370
Estimated business management incentive fees (3) — (893) 893 — — — —
Increase in carrying value of property included in discontinued operations — (619) — — — (619) —
Loss on impairment of real estate 9,260 230 — — — 9,490 —
Distributions received from SIR 12,708 12,708 12,708 12,708 12,708 50,832 50,334
Distributions received from unconsolidated joint ventures 482 — — — — 482 —
(Gain) loss on early extinguishment of debt — 1,715 — — — 1,715 (104)
Equity in earnings of SIR (1,313) (9,453) (8,207) (2,611) (7,486) (21,584) (35,381)
Equity in losses of unconsolidated joint ventures 621 — — — — 621 —
Net (gain) loss on issuance of shares by SIR — (51) (21) — 2 (72) (86)
Gain on sale of real estate — — — — — — (79)
Adjusted EBITDA $ 73,458 $ 51,916 $ 52,160 $ 51,893 $ 49,424 $ 229,427 $ 193,402
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CALCUL
ATION OF FUNDS FROM OPER
ATIONS (FFO)
AND NORMALIZED FF
O
AV
AILABLE FOR COMMON SHAREHOLDER
S
23
CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO AVAILABLE FOR COMMON SHAREHOLDERS (1)
(amounts in thousands, except per share data)
(1) See Definitions of Certain Non-GAAP Financial Measures on page 24 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.
(2) 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.
For the Three Months Ended For the Year Ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016 12/31/2017 12/31/2016
Net income (loss) available for common shareholders $ (18,266) $ 10,989 $ 11,677 $ 7,415 $ 12,065 $ 11,815 $ 57,843
Add (less): Depreciation and amortization:
Consolidated properties 47,639 20,781 20,663 20,505 18,440 109,588 73,153
Unconsolidated joint venture properties 2,185 — — — — 2,185 —
FFO attributable to SIR investment 10,297 18,429 17,149 12,404 17,618 58,279 71,227
Loss on impairment of real estate 9,260 230 — — — 9,490 —
Equity in earnings of SIR (1,313) (9,453) (8,207) (2,611) (7,486) (21,584) (35,381)
Increase in carrying value of property included in discontinued operations — (619) — — — (619) —
Gain on sale of real estate — — — — — — (79)
FFO available for common shareholders 49,802 40,357 41,282 37,713 40,637 169,154 166,763
Add (less): Acquisition related costs — — — — 828 — 1,191
(Gain) loss on early extinguishment of debt — 1,715 — — — 1,715 (104)
Normalized FFO attributable to SIR investment 9,680 16,903 17,407 14,590 17,684 58,580 71,313
FFO attributable to SIR investment (10,297) (18,429) (17,149) (12,404) (17,618) (58,279) (71,227)
Net (gain) loss on issuance of shares by SIR — (51) (21) — 2 (72) (86)
Estimated business management incentive fees (2) — (893) 893 — — — —
Normalized FFO available for common shareholders $ 49,185 $ 39,602 $ 42,412 $ 39,899 $ 41,533 $ 171,098 $ 167,850
Weighted average common shares outstanding (basic) 99,040 96,883 71,088 71,079 71,079 84,633 71,050
Weighted average common shares outstanding (diluted) 99,040 96,958 71,119 71,094 71,079 84,653 71,071
Per common share amounts (basic and diluted):
Net income (loss) available for common shareholders $ (0.18) $ 0.11 $ 0.16 $ 0.10 $ 0.17 $ 0.14 $ 0.81
FFO available for common shareholders $ 0.50 $ 0.42 $ 0.58 $ 0.53 $ 0.57 $ 2.00 $ 2.35
Normalized FFO available for common shareholders $ 0.50 $ 0.41 $ 0.60 $ 0.56 $ 0.58 $ 2.02 $ 2.36
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
NON-GAA
P FINANCIA
L MEASURES DEFINITION
S
24
DEFINITIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
Definition of Consolidated Property NOI and Consolidated Property Cash Basis NOI
We calculate Consolidated Property NOI and Consolidated Property Cash Basis NOI as shown on page 20. The calculations of Consolidated Property NOI and Consolidated Property Cash Basis NOI exclude
certain components of net income (loss) available for common shareholders in order to provide results that are more closely related to our consolidated property level results of operations. We define Consolidated
Property NOI as consolidated income from our rental of real estate less consolidated property operating expenses. Consolidated Property NOI excludes amortization of capitalized tenant improvement costs and
leasing commissions that we record as depreciation and amortization. We define Consolidated Property Cash Basis NOI as Consolidated Property NOI excluding non-cash straight line rent adjustments, lease value
amortization and non-cash amortization included in other operating expenses. We consider Consolidated Property NOI and Consolidated Property Cash Basis NOI to be appropriate supplemental measures to net
income (loss) available for common shareholders because they may help both investors and management to understand the operations of our consolidated properties. We use Consolidated Property NOI and
Consolidated Property Cash Basis NOI to evaluate individual and company wide property level performance, and we believe that Consolidated Property NOI and Consolidated Property Cash Basis NOI provide
useful information to investors regarding our 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
our operating performance between periods and with other REITs. Consolidated Property NOI and Consolidated Property Cash Basis NOI do not represent cash generated by operating activities in accordance with
GAAP and should not be considered alternatives to net income (loss), net income (loss) available for common shareholders or operating income as indicators of our operating performance or as measures of our
liquidity. These measures should be considered in conjunction with net income (loss), net income (loss) available for common shareholders and operating income as presented in our Consolidated Statements of
Income (Loss). Other REITs and real estate companies may calculate Consolidated Property NOI and Consolidated Property Cash Basis NOI differently than we do. In addition, we present our proportionate share
of NOI and Cash Basis NOI from our unconsolidated joint ventures. We provide a reconciliation of NOI and Cash Basis NOI from unconsolidated joint ventures to equity in losses from affiliates on page 19.
Definition of EBITDA and Adjusted EBITDA
We calculate EBITDA and Adjusted EBITDA as shown on page 22. We consider EBITDA and Adjusted EBITDA to be appropriate supplemental measures of our operating performance, along with net income (loss)
and operating income. We believe that EBITDA and Adjusted EBITDA provide useful information to investors because by excluding the effects of certain historical amounts, such as interest, depreciation and
amortization expense, EBITDA and Adjusted EBITDA may facilitate a comparison of current operating performance with our past operating performance. EBITDA and Adjusted EBITDA do not represent cash
generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) or operating income as indicators of operating performance or as measures of GOV’s
liquidity. These measures should be considered in conjunction with net income (loss) and operating income as presented in our Consolidated Statements of Income (Loss). Other REITs and real estate companies
may calculate EBITDA and Adjusted EBITDA differently than we do.
Definition of FFO and Normalized FFO
We calculate FFO available for common shareholders and Normalized FFO available for common shareholders as shown on page 23. FFO available for common shareholders is calculated on the basis defined by
The National Association of Real Estate Investment Trusts, or Nareit, which is net income (loss) available for common shareholders calculated in accordance with GAAP, plus real estate depreciation and
amortization of consolidated properties and our proportionate share of the real estate depreciation and amortization of unconsolidated joint venture properties and the difference between FFO attributable to an
equity investment, equity in earnings of an equity investee but excluding impairment charges on and increases in the carrying value of real estate assets, any gain or loss on sale of real estate, as well as certain
other adjustments currently not applicable to us. Our calculation of Normalized FFO available for common shareholders differs from Nareit's definition of FFO available for common shareholders because we include
SIR's Normalized FFO attributable to our equity investment in SIR (net of FFO attributable to our equity investment in SIR), we include 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 our 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 we exclude acquisition related costs expensed under
GAAP, gains and losses on issuance of shares by SIR and gains and losses on early extinguishment of debt. We consider FFO available for common shareholders and Normalized FFO available for common
shareholders to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss), net income (loss) available for our common shareholders and operating income. We
believe that FFO available for common shareholders and Normalized FFO available for common shareholders provide useful information to investors because by excluding the effects of certain historical amounts,
such as depreciation expense, FFO available for common shareholders and Normalized FFO available for common shareholders may facilitate a comparison of our operating performance between periods and with
other REITs. FFO available for common shareholders and Normalized FFO available for common shareholders are among the factors considered by our Board of Trustees when determining the amount of
distributions to our shareholders. Other factors include, but are not limited to, requirements to maintain our qualification for taxation as a REIT, limitations in our credit agreement and public debt covenants, the
availability to us of debt and equity capital, our expectation of our future capital requirements and operating performance, our receipt of distributions from SIR and our expected needs for and availability of cash to
pay our obligations. FFO available for common shareholders and Normalized FFO available for common shareholders do not represent cash generated by operating activities in accordance with GAAP and should
not be considered alternatives to net income (loss), net income (loss) available for common shareholders or operating income as indicators of our operating performance or as measures of our liquidity. These
measures should be considered in conjunction with net income (loss), net income (loss) available for common shareholders and operating income as presented in our Consolidated Statements of Income (Loss).
Other real estate companies and REITs may calculate FFO available for common shareholders and Normalized FFO available for common shareholders differently than we do.
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
PORTFOLIO INFORMATION
25
Stevens Center, Richland, WA
Square Feet: 140,152
Agency Occupant: Department of Energy
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
PORTFOLIO SUMMA
RY
26
PORTFOLIO SUMMARY (1)
As of December 31, 2017
(1) The data presented exclude two properties (three buildings) owned by two unconsolidated joint ventures in which we own 50% and 51% interests. See page 19 for more information regarding
these joint ventures.
(2) Rentable square footage is subject to changes when space is re-measured or re-configured for tenants.
(3) Percent leased includes (i) space being fitted out for occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by
tenants, if any, as of the measurement date.
(4) See Page 20 for the calculation of Consolidated Property NOI and Consolidated Property Cash Basis NOI and a reconciliation of net income (loss) available for common shareholders determined
in accordance with GAAP to those amounts.
% of Total % Rental Income
% Consolidated
Property NOI
% Consolidated Property
Cash Basis NOI
Number of Number of Sq. Ft. Three Months Three Months Three Months
Properties Buildings Sq. Ft. (2) % Sq. Ft. % Leased (3) Leased Ended 12/31/2017 Ended 12/31/2017 (4) Ended 12/31/2017 (4)
Properties majority leased to the U.S. Government 49 64 7,818,597 44.7% 96.7% 45.9% 45.1% 46.1% 47.9%
Properties majority leased to state governments 21 28 3,119,690 17.8% 95.0% 18.0% 18.1% 16.5% 16.9%
Properties majority leased to other government tenants 3 3 446,478 2.6% 97.1% 2.6% 4.1% 4.4% 3.8%
Properties majority leased to government contractor tenants 2 4 463,019 2.6% 98.6% 2.8% 3.2% 3.3% 3.6%
Properties majority leased to other tenants 31 66 5,530,656 31.6% 91.6% 30.7% 29.4% 29.7% 27.8%
Other properties (currently vacant) 2 2 120,898 0.7% —% —% 0.1% —% —%
Total / Average 108 167 17,499,338 100.0% 94.2% 100.0% 100.0% 100.0% 100.0%
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
SUMMA
RY
CONSOLID
ATED
AND SAME PROPERT
Y RESU
LT
S
27
SUMMARY CONSOLIDATED AND SAME PROPERTY RESULTS – FOURTH QUARTER
(dollars and sq. ft. in thousands)
(1) Based on consolidated properties we owned as of December 31, 2017 and December 31, 2016, respectively, excluding one property (one building) classified as discontinued operations which was
sold on August 31, 2017.
(2) Based on consolidated properties we owned as of December 31, 2017 and which we owned continuously since October 1, 2016.
(3) Subject to changes when space is re-measured or re-configured for tenants.
(4) Percent leased includes (i) space being fitted out for occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by
tenants, if any, as of the measurement date.
(5) We report 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
expense reimbursements, tax escalations, parking revenues, service income and other fixed and variable charges paid to us by our tenants, as well as the net effect of non-cash amortization of
intangible lease assets and liabilities.
(6) See page 20 for the calculation of Consolidated Property NOI and Consolidated Property Cash Basis NOI and a reconciliation of net income (loss) available for common shareholders determined
in accordance with GAAP to those amounts and see page 21 for a calculation and reconciliation of same property NOI and same property Cash Basis NOI.
(7) Consolidated Property NOI margin is defined as Consolidated Property NOI as a percentage of rental income. Consolidated Property Cash Basis NOI margin is defined as Consolidated Property
Cash Basis NOI as a percentage of cash basis rental income. Cash basis rental income excludes non-cash straight line rent adjustments, non-cash amortization included in property operating
expenses and the net effect of non-cash amortization of intangible lease assets and liabilities.
Summary Consolidated Results (1) Summary Same Property Results (2)
For the Three Months Ended For the Three Months Ended
12/31/2017 12/31/2016 12/31/2017 12/31/2016
Consolidated properties (end of period) 108 73 70 70
Total sq. ft. (3) 17,499 11,443 10,910 10,921
Percent leased (4) 94.2% 95.1% 94.8% 95.2%
Rental income (5) $ 107,170 $ 66,030 $ 66,324 $ 65,589
Consolidated Property NOI (6) $ 66,093 $ 39,939 $ 39,979 $ 39,608
Consolidated Property Cash Basis NOI (6) $ 64,406 $ 39,271 $ 40,093 $ 38,962
Consolidated Property NOI % margin (7) 61.7% 60.5% 60.3% 60.4%
Consolidated Property Cash Basis NOI % margin (7) 61.0% 60.0% 60.2% 59.9%
Consolidated Property NOI % change 65.5% — 0.9% —
Consolidated Property Cash Basis NOI % change 64.0% — 2.9% —
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
SUMMA
RY
CONSOLID
ATED
AND SAME PROPERT
Y RESU
LT
S
28
SUMMARY CONSOLIDATED AND SAME PROPERTY RESULTS – YEAR
(dollars and sq. ft. in thousands)
(1) Based on consolidated properties we owned as of December 31, 2017 and December 31, 2016, respectively, excluding one property (one building) classified as discontinued operations which was
sold on August 31, 2017.
(2) Based on consolidated properties we owned as of December 31, 2017 and which we owned continuously since January 1, 2016.
(3) Subject to changes when space is re-measured or re-configured for tenants.
(4) Percent leased includes (i) space being fitted out for occupancy pursuant to our lease agreements, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by
tenants, if any, as of the measurement date.
(5) We report 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
expense reimbursements, tax escalations, parking revenues, service income and other fixed and variable charges paid to us by our tenants, as well as the net effect of non-cash amortization of
intangible lease assets and liabilities.
(6) See page 20 for the calculation of Consolidated Property NOI and Consolidated Property Cash Basis NOI and a reconciliation of net income (loss) available for common shareholders determined
in accordance with GAAP to those amounts and see page 21 for a calculation and reconciliation of same property NOI and same property Cash Basis NOI.
(7) Consolidated Property NOI margin is defined as Consolidated Property NOI as a percentage of rental income. Consolidated Property Cash Basis NOI margin is defined as Consolidated Property
Cash Basis NOI as a percentage of cash basis rental income. Cash basis rental income excludes non-cash straight line rent adjustments, non-cash amortization included in property operating
expenses and the net effect of non-cash amortization of intangible lease assets and liabilities.
Summary Consolidated Results (1) Summary Same Property Results (2)
For the Year Ended For the Year Ended
12/31/2017 12/31/2016 12/31/2017 12/31/2016
Consolidated properties (end of period) 108 73 69 69
Total sq. ft. (3) 17,499 11,443 10,572 10,583
Percent leased (4) 94.2% 95.1% 94.9% 95.4%
Rental income (5) $ 316,532 $ 258,180 $ 253,197 $ 249,429
Consolidated Property NOI (6) $ 192,243 $ 155,918 $ 151,821 $ 150,923
Consolidated Property Cash Basis NOI (6) $ 188,941 $ 154,200 $ 150,552 $ 149,574
Consolidated Property NOI % margin (7) 60.7% 60.4% 60.0% 60.5%
Consolidated Property Cash Basis NOI % margin (7) 60.2% 60.0% 59.6% 60.2%
Consolidated Property NOI % change 23.3% — 0.6% —
Consolidated Property Cash Basis NOI % change 22.5% — 0.7% —
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
OCCU
PANC
Y
AND LEASING SUMMA
RY
29
OCCUPANCY AND LEASING SUMMARY (1)
(dollars and sq. ft. in thousands, except per sq. ft. data)
(1) The data presented exclude one property (one building) classified as discontinued operations which was sold on August 31, 2017 and two properties (three buildings) owned by two unconsolidated joint ventures in which we own 50% and 51% interests.
See page 19 for more information regarding these joint ventures.
(2) Rentable square footage is subject to changes when space is re-measured or re-configured for tenants.
(3) Rentable square footage includes an expansion being constructed at an existing property we own prior to the commencement of the lease.
(4) Percent difference in prior rents charged for same space or, in the case of space acquired vacant, market rental rates for similar space in the building at the date of acquisition. Rents include estimated recurring expense reimbursements paid to us, exclude
lease value amortization and are net of lease concessions.
(5) Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent.
(6) Excludes the estimated aggregate cost of $19.8 million to redevelop and expand an existing property we own prior to the commencement of the lease.
The above leasing summary is based on leases entered during the periods indicated.
As of and for the Three Months Ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
Consolidated Properties (end of period) 108 74 74 74 73
Total sq. ft. (2) 17,499 11,517 11,516 11,512 11,443
Percentage leased 94.2% 95.0% 95.0% 95.1% 95.1%
Leasing Activity (sq. ft.) (3):
Government tenants 279 393 236 324 344
Non-government tenants 241 43 52 36 43
Total 520 436 288 360 387
% Change in GAAP Rent (4):
Government tenants 8.0% 0.2% 15.0% 4.5% 5.7%
Non-government tenants (4.0%) (11.1%) 6.6% 7.1% (19.1%)
Total 3.3% (0.6%) 13.5% 5.2% 4.3%
Leasing Cost and Concession Commitments (5)(6):
Government tenants $ 1,942 $ 6,629 $ 1,611 $ 879 $ 2,107
Non-government tenants 3,698 1,273 854 1,362 1,348
Total $ 5,640 $ 7,902 $ 2,465 $ 2,241 $ 3,455
Leasing Cost and Concession Commitments per Sq. Ft. (5)(6):
Government tenants $ 6.96 $ 16.86 $ 6.82 $ 2.71 $ 6.13
Non-government tenants $ 15.33 $ 29.64 $ 16.33 $ 37.87 $ 31.05
Total $ 10.84 $ 18.12 $ 8.55 $ 6.22 $ 8.93
Weighted Average Lease Term by Sq. Ft. (years):
Government tenants 5.5 8.5 8.1 10.9 3.1
Non-government tenants 4.7 7.2 3.2 7.1 5.2
Total 5.1 8.4 7.2 10.6 3.3
Leasing Cost and Concession Commitments per Sq. Ft. per Year (3)(5)(6):
Government tenants $ 1.25 $ 1.98 $ 0.85 $ 0.25 $ 2.00
Non-government tenants $ 3.29 $ 4.10 $ 5.09 $ 5.36 $ 6.02
Total $ 2.11 $ 2.16 $ 1.19 $ 0.59 $ 2.70
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
LEASING
ANA
LYSIS B
Y TENANT TYP
E
30
LEASING ANALYSIS BY TENANT TYPE (1)
(1) The data presented exclude two properties (three buildings) owned by two unconsolidated joint ventures in which we own 50% and 51% interests. See page 19 for more
information regarding these joint ventures.
(2) Rentable square footage leased is pursuant to leases existing as of the measurement date and includes (i) space being fitted out for occupancy, if any, and (ii) space which is
leased, but is not occupied or is being offered for sublease, if any, as of the measurement date. Square footage measurements are subject to changes when space is re-
measured or re-configured for new tenants.
(3) Rentable square footage excludes an expansion being constructed at an existing property we own prior to the commencement of the lease.
Sq. Ft. During the Three Months Ended 12/31/2017
Sq. Ft. Leased % of Sq. Ft. Lease New Net Sq. Ft. Leased % of Sq. Ft.
As of Leased as of Leases Renewals Leases Acquisitions/ As of Leased as of
Tenant Type 9/30/2017 (2)(3) 9/30/2017 (2)(3) Expired Executed Executed Dispositions 12/31/2017 (2)(3) 12/31/2017 (2)(3)
U.S. Government 6,651,250 60.8% (336,910) 278,945 — 610,364 7,203,649 43.7%
State Government 2,505,085 22.9% — — — 101,275 2,606,360 15.8%
Other Government 371,202 3.4% — — — 80,932 452,134 2.7%
Government Contractor 416,369 3.8% (2,500) 2,500 — 598,050 1,014,419 6.2%
Other Tenants 1,002,395 9.1% (235,805) 185,978 52,727 4,195,482 5,200,777 31.6%
10,946,301 100.0% (575,215) 467,423 52,727 5,586,103 16,477,339 100.0%
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
TENANT LIS
T
31
TENANT LIST
As of December 31, 2017 (1)
(1) The data presented exclude two properties (three buildings) owned by two unconsolidated joint ventures in which we acquired 50% and 51% interests. See page 19 for more information regarding these joint ventures.
(2) Rentable square footage is pursuant to leases existing as of December 31, 2017, and includes (i) space being fitted out for occupancy, if any, and (ii) space which is leased but is not occupied or is being offered for sublease, if any. Rentable square
footage measurements are subject to changes when space is re-measured or re-configured for new tenants.
(3) Percentage of annualized rental income is calculated using annualized contractual base rents from our tenants pursuant to our lease agreements as of December 31, 2017, plus straight line rent adjustments and estimated recurring expense
reimbursements to be paid to us, and excluding lease value amortization.
(4) Agency occupant cannot be disclosed.
(5) Rentable square footage excludes an expansion to be constructed at an existing property we own prior to the commencement of the lease.
% of Total % of % of Total % of
Rentable Rentable Annualized Rentable Rentable Annualized
Tenant / Agency Sq. Ft. (2) Sq. Ft. (2) Rental Income (3) Tenant Sq. Ft. (2) Sq. Ft. (2) Rental Income (3)
U.S. Government: State Governments:
1 Citizenship and Immigration Services 448,607 2.6% 5.2% 1 State of California - eleven agency occupants 755,086 4.3 % 5.0 %
2 Internal Revenue Service 1,041,806 6.0% 5.0% 2 Commonwealth of Massachusetts - three agency occupants 307,119 1.8 % 2.2 %
3 U.S. Government (4) 406,388 2.3% 2.9% 3 State of Georgia - State Properties Commission 298,223 1.7 % 1.5 %
4 Federal Bureau of Investigation 304,425 1.7% 2.1% 4 Commonwealth of Virginia - two agency occupants 255,241 1.5 % 1.4 %
5 Bureau of Prisons 180,173 1.0% 2.1% 5 State of New Jersey - Department of Treasury 173,189 1.0 % 1.2 %
6 Department of Justice 239,417 1.4% 1.9% 6 State of Oregon - four agency occupants 199,018 1.1 % 1.1 %
7 Centers for Disease Control (5) 352,876 2.0% 1.8% 7 State of Maryland - State of Maryland 185,949 1.1 % 0.9 %
8 Bureau of Land Management 288,291 1.6% 1.6% 8 State of Washington - Social and Health Services 111,908 0.6 % 0.6 %
9 Customs and Border Protection 243,162 1.4% 1.5% 9 State of Arizona - Northern Arizona University 66,743 0.4 % 0.3 %
10 General Services Administration 187,975 1.1% 1.5% 10 State of South Carolina -six agency occupants 124,238 0.7 % 0.3 %
11 Department of Veterans Affairs 247,012 1.4% 1.5% 11 State of Minnesota - Minnesota State Lottery 61,426 0.4 % 0.3 %
12 Defense Intelligence Agency 266,000 1.5% 1.2% 12 State of New York - three agency occupants 64,000 0.4 % 0.2 %
13 Social Security Administration 189,645 1.1% 1.1% 13 State of Kansas - University of Kansas 4,220 0.0 % 0.0 %
14 Bureau of Reclamation 212,996 1.2% 1.1% Subtotal State Governments 2,606,360 14.9 % 15.1 %
15 National Park Service 166,745 1.0% 1.1% 5 Other Government Tenants:
16 U.S. Courts 114,219 0.7% 1.0% The United Nations 187,060 1.1 % 2.4 %
17 Immigration and Customs Enforcement 90,688 0.5% 0.9% Montgomery County, MD 181,895 1.0 % 1.1 %
18 U.S. Coast Guard 139,319 0.8% 0.8% 3 Other Government Tenants 83,179 0.5 % 0.5 %
19 Drug Enforcement Agency 93,177 0.5% 0.8% Subtotal Other Government Tenants 452,134 2.6 % 4.0 %
20 Bureau of Safety and Environmental Enforcement 116,216 0.7% 0.7% 27 Government Contractor Tenants:
21 National Archives and Record Administration 352,064 2.0% 0.7% BAE Systems plc 165,004 0.9 % 1.5 %
22 Department of Health and Human Services 111,388 0.6% 0.7% Leidos Holdings Inc 202,543 1.2 % 1.4 %
23 Department of Energy 140,152 0.8% 0.7% Science Applications International Corp 158,919 0.9 % 1.3 %
24 Defense Nuclear Facilities Board 60,133 0.3% 0.7% The Boeing Company 80,339 0.5 % 0.6 %
25 Department of State 89,058 0.5% 0.6% 23 Other Government Contractor Tenants 407,614 2.3 % 1.9 %
26 U.S. Postal Service 321,800 1.8% 0.6% Subtotal Government Contractor Tenants 1,014,419 5.8 % 6.7 %
27 Occupational Health and Safety Administration 57,770 0.3% 0.5% 486 Other Tenants:
28 Bureau of the Fiscal Service 98,073 0.6% 0.4% CareFirst Inc. 231,962 1.3 % 2.8 %
29 Centers for Medicare and Medicaid Services 78,361 0.4% 0.4% ICF International, Inc. 127,946 0.7 % 1.2 %
30 Military Entrance Processing Station 56,931 0.3% 0.4% Sentara Healthcare 276,974 1.6 % 0.9 %
31 Department of the Army 231,290 1.3% 0.4% GTCR, LLC 93,000 0.5 % 0.6 %
32 Environmental Protection Agency 43,232 0.2% 0.4% Odin, Feldman & Pittleman 53,918 0.3 % 0.5 %
33 Department of Housing and Urban Development 82,497 0.5% 0.4% Xerox Corp 107,422 0.6 % 0.5 %
34 Food and Drug Administration 33,398 0.2% 0.2% 480 Other Tenants 4,309,555 24.7 % 24.2 %
35 Department of Defense 31,030 0.2% 0.2% Subtotal Other Tenants 5,200,777 29.7 % 30.7 %
36 Defense Health Agency 15,939 0.1% 0.1% Subtotal Leased Rentable Square Feet 16,477,339 94.2 % 100.0 %
37 Equal Employment Opportunity Commission 21,439 0.1% 0.1% Available for Lease 1,021,999 5.8 % — %
38 U.S. Navy 29,070 0.2% 0.1% Total Rentable Square Feet 17,499,338 100.0 % 100.0 %
39 Small Business Administration 8,575 0.0% 0.0%
40 Department of Labor 6,459 0.0% 0.0%
41 U.S. Department of Transportation 5,853 0.0% 0.0%
Subtotal U.S. Government 7,203,649 41.2% 43.5%
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
LEASE EXPIR
ATION SCHEDUL
E
32
LEASE EXPIRATION SCHEDULE (1)
(dollars in thousands)
As of December 31, 2017
(1) The data presented exclude two properties (three buildings) owned by two unconsolidated joint ventures in which we own 50% and 51% interests. See page 19 for more
information regarding these joint ventures.
(2) The year of lease expiration is pursuant to current contract terms. Some of our government tenants have the right to vacate their space before the stated expirations of their
leases. In addition, certain of our government tenants have the right to terminate their leases if their respective legislature or other funding authority does not appropriate rent in
their respective annual budgets.
(3) Leased square footage is pursuant to leases existing as of December 31, 2017, and includes (i) space being fitted out for tenant occupancy pursuant to our lease agreements, if
any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any. Square footage measurements are subject to changes when space is
re-measured or re-configured for new tenants.
(4) Annualized rental income is calculated using the annualized contractual base rents from our tenants pursuant to our lease agreements as of December 31, 2017, plus straight
line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization.
(5) Leased square footage excludes an expansion being constructed at an existing property we own prior to the commencement of the lease.
Number of Tenants Expiration of leased Cumulative % Annualized Rental % of Cumulative %
Year (2) Expiring square feet (3) % of Total of Total Income Expiring (4) Annualized Total of Total
2018 128 1,666,566 10.1% 10.1% $ 48,215 11.3% 11.3%
2019 97 2,567,338 15.6% 25.7% 73,723 17.3% 28.6%
2020 110 2,415,770 14.7% 40.4% 63,570 14.9% 43.5%
2021 90 1,728,712 10.5% 50.9% 34,102 8.0% 51.5%
2022 91 1,630,325 9.9% 60.8% 36,985 8.7% 60.2%
2023 46 1,173,462 7.1% 67.9% 34,434 8.1% 68.3%
2024 40 1,405,259 8.5% 76.4% 35,541 8.3% 76.6%
2025 34 1,090,044 6.6% 83.0% 25,023 5.9% 82.5%
2026 27 820,395 5.0% 88.0% 23,621 5.5% 88.0%
2027 and thereafter 48 1,979,468 (5) 12.0% 100.0% 51,431 12.0% 100.0%
Total 711 16,477,339 100.0% $ 426,645 100.0%
Weighted average remaining
lease term (in years) 4.8 4.7
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
EXHIBIT
33
75 Pleasant Street, Malden, MA
Square Feet: 125,521
Occupant: Department of Education, Commonwealth
of Massachusetts
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CONSOLID
ATED PROPERT
Y DE
TAI
L
34
EXHIBIT ACONSOLIDATED PROPERTY DETAIL
(sorted by location)
As of December 31, 2017 (1)
(dollars in thousands)
See notes on page 36.
Annualized Year Built or
No. of Primary Rentable Rental Undepreciated Depreciated Date Most Recent
Property Location Buildings Tenant Type Sq. Ft. % Leased Income (2) Carrying Value Carrying Value Acquired (2) Renovation
1 131 Clayton Street Montgomery, AL 1 U.S. Government 57,815 100.0% $ 1,564 $ 10,033 $ 8,554 6/22/2011 2007
2 4344 Carmichael Road Montgomery, AL 1 U.S. Government 49,370 100.0% 1,522 13,032 11,866 12/17/2013 2009
3 15451 North 28th Avenue Phoenix, AZ 1 State 66,743 100.0% 1,438 9,789 9,161 9/10/2014 2013
4 711 S 14th Avenue Safford, AZ 1 U.S. Government 36,139 94.4% 913 12,516 10,285 6/16/2010 1992
5 5045 East Butler Street Fresno, CA 1 U.S. Government 531,976 100.0% 8,384 68,452 44,955 8/29/2002 1971
6 10949 N. Mather Boulevard Rancho Cordova, CA 1 State 93,807 100.0% 2,609 17,586 15,817 10/30/2013 2012
7 11020 Sun Center Drive Rancho Cordova, CA 1 State 82,896 100.0% 1,980 10,671 10,434 12/20/2016 2016
8 801 K Street Sacramento, CA 1 State 337,811 91.3% 9,832 71,598 67,989 1/29/2016 2002
9 9800 Goethe Road Sacramento, CA 1 State 110,500 100.0% 2,617 14,762 12,164 12/23/2009 1993
10 9815 Goethe Road Sacramento, CA 1 State 87,863 100.0% 1,953 12,438 10,706 9/14/2011 1992
11 Capitol Place Sacramento, CA 1 State 163,840 89.7% 4,538 45,213 36,882 12/17/2009 1988
12 4181 Ruffin Road San Diego, CA 1 U.S. Government 145,734 97.9% 3,473 20,093 16,761 7/16/2010 2013
13 4560 Viewridge Road San Diego, CA 1 U.S. Government 93,177 100.0% 3,301 26,780 16,898 3/31/1997 1996
14 9174 Sky Park Centre San Diego, CA 1 U.S. Government 43,918 96.8% 1,186 8,868 6,183 6/24/2002 1986
15 603 San Juan Avenue Stockton, CA 1 U.S. Government 22,012 100.0% 971 6,033 5,292 7/20/2012 2012
16 16194 West 45th Street Golden, CO 1 U.S. Government 43,232 100.0% 1,584 7,141 3,825 3/31/1997 1997
17 12795 West Alameda Parkway Lakewood, CO 1 U.S. Government 166,745 100.0% 4,500 27,482 22,551 1/15/2010 1988
18 Corporate Center Lakewood, CO 3 U.S. Government 212,996 100.0% 4,569 34,322 22,741 10/11/2002 2004
19 11 Dupont Circle, NW Washington, DC 1 Non-Government 153,228 80.0% 7,308 74,297 73,981 10/2/2017 2004
20 1211 Connecticut Avenue, NW Washington, DC 1 Non-Government 132,481 85.7% 5,845 55,275 55,098 10/2/2017 2014
21 1401 K Street, NW Washington, DC 1 Non-Government 123,001 84.6% 5,926 65,065 64,774 10/2/2017 2016
22 20 Massachusetts Avenue Washington, DC 1 U.S. Government 340,119 100.0% 18,456 84,781 51,555 3/31/1997 1996
23 440 First Street, NW Washington, DC 1 Non-Government 141,576 98.4% 8,476 67,210 66,968 10/2/2017 2013
24 500 First Street, NW Washington, DC 1 U.S. Government 129,035 100.0% 8,036 46,138 46,026 10/2/2017 2010
25 625 Indiana Avenue Washington, DC 1 U.S. Government 160,897 95.1% 7,849 58,510 52,136 8/17/2010 1989
26 840 First Street, NE Washington, DC 1 Non-Government 253,164 99.7% 13,517 115,976 115,518 10/2/2017 2003
27 7850 Southwest 6th Court Plantation, FL 1 U.S. Government 135,819 100.0% 4,878 35,775 30,551 5/12/2011 1999
28 8900 Grand Oak Circle Tampa, FL 1 U.S. Government 67,916 100.0% 1,946 13,042 10,872 10/15/2010 2008
29 181 Spring Street NW Atlanta, GA 1 U.S. Government 90,688 100.0% 3,727 25,871 23,152 7/25/2012 2007
30 Corporate Square Atlanta, GA 5 U.S. Government 352,876 (4) 100.0% 7,847 61,079 49,537 7/16/2004 1967
31 Executive Park Atlanta, GA 1 Non-Government 125,788 100.0% 1,622 17,350 12,223 7/16/2004 2014
32 One Georgia Center Atlanta, GA 1 State 375,952 91.3% 7,393 41,764 37,188 9/30/2011 2008
33 4712 Southpark Boulevard Ellenwood, GA 1 U.S. Government 352,064 100.0% 3,131 21,099 18,438 7/25/2012 2005
34 1185, 1249 & 1387 S. Vinnell Way Boise, ID 3 U.S. Government 180,952 100.0% 4,669 33,218 29,159 9/11/2012 1996
35 2020 S. Arlington Heights Arlington Heights, IL 1 U.S. Government 57,770 100.0% 1,987 15,340 12,594 12/29/2009 2002
36 Intech Park Indianapolis, IN 3 U.S. Government 433,924 93.2% 9,730 76,880 65,223 10/14/2011 2000
37 400 State Street Kansas City, KS 1 U.S. Government 170,817 91.9% 2,920 15,171 12,612 6/16/2010 1971
38 7125 Industrial Road Florence, KY 1 U.S. Government 167,939 100.0% 2,554 13,501 12,032 12/31/2012 2002
39 251 Causeway Street Boston, MA 1 State 132,876 100.0% 4,071 24,145 20,717 8/17/2010 1988
40 75 Pleasant Street Malden, MA 1 State 125,521 100.0% 4,964 32,295 26,324 5/24/2010 2008
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CONSOLID
ATED PROPERT
Y DE
TAI
L (Continued
)
35
EXHIBIT ACONSOLIDATED PROPERTY DETAIL
(sorted by location)
As of December 31, 2017 (1)
(dollars in thousands)
Annualized Year Built or
No. of Primary Rentable Rental Undepreciated Depreciated Date Most Recent
Property Location Buildings Tenant Type Sq. Ft. % Leased Income (2) Carrying Value Carrying Value Acquired (3) Renovation
41 25 Newport Avenue Quincy, MA 1 State 92,549 96.3% $ 2,022 $ 13,196 $ 11,534 2/16/2011 2009
42 One Montvale Avenue Stoneham, MA 1 U.S. Government 97,777 94.1% 2,497 14,800 12,492 6/16/2010 1987
43 Annapolis Commerce Center Annapolis, MD 2 State 101,275 100.0% 2,443 11,722 11,668 10/2/2017 1989
44 4201 Patterson Avenue Baltimore, MD 1 State 84,674 100.0% 1,270 12,974 8,454 10/15/1998 2014
45 Ammendale Commerce Center Beltsville, MD 3 Non-Government 129,303 83.7% 1,832 14,377 14,308 10/2/2017 1987
46 Indian Creek Technology Park Beltsville, MD 4 Non-Government 186,363 99.9% 3,836 20,913 20,827 10/2/2017 1988
47 Gateway 270 West Clarksburg, MD 6 Non-Government 252,295 92.9% 4,642 21,792 21,727 10/2/2017 2002
48 Hillside Center Columbia, MD 2 Non-Government 87,267 87.6% 1,683 7,665 7,639 10/2/2017 2014
49 Snowden Center Columbia, MD 5 Non-Government 145,423 90.1% 2,992 18,137 18,073 10/2/2017 1982
50 TenThreeTwenty Columbia, MD 1 Non-Government 140,439 92.7% 3,639 19,605 19,502 10/2/2017 2013
51 20400 Century Boulevard Germantown, MD 1 Vacant 80,550 —% — 13,477 8,181 3/31/1997 1995
52 Cloverleaf Center Germantown, MD 4 Non-Government 173,916 89.0% 3,492 16,529 16,491 10/2/2017 2000
53 3300 75th Avenue Landover, MD 1 U.S. Government 266,000 100.0% 5,309 41,526 34,255 2/26/2010 2004
54 1401 Rockville Pike Rockville, MD 1 Other Government 190,044 93.3% 4,631 49,040 31,803 2/2/1998 2015
55 2115 East Jefferson Street Rockville, MD 1 U.S. Government 128,645 84.6% 3,018 14,829 13,600 8/27/2013 2003
56 Metro Park North Rockville, MD 4 Non-Government 192,280 91.8% 3,843 18,783 18,724 10/2/2017 2001
57 Redland 520/530 Rockville, MD 3 Non-Government 351,857 96.6% 13,739 75,308 74,924 10/2/2017 2008
58 Redland 540 Rockville, MD 1 Non-Government 131,516 46.6% 1,861 30,482 30,371 10/2/2017 2017
59 Rutherford Business Park Windsor Mill, MD 1 U.S. Government 80,398 100.0% 1,932 11,827 10,529 11/16/2012 2011
60 Meadows Business Park Woodlawn, MD 2 U.S. Government 182,561 83.8% 3,256 27,431 23,525 2/15/2011 1997
61 11411 E. Jefferson Avenue Detroit, MI 1 U.S. Government 55,966 100.0% 2,731 18,990 15,530 4/23/2010 2009
62 330 2nd Avenue South Minneapolis, MN 1 Non-Government 193,594 84.9% 3,201 17,931 17,931 7/16/2010 2014
63 Rosedale Corporate Plaza Roseville, MN 1 State 61,426 100.0% 1,126 8,222 5,029 12/1/1999 1987
64 1300 Summit Street Kansas City, MO 1 U.S. Government 86,739 100.0% 2,357 15,099 13,486 9/27/2012 1998
65 4241-4300 NE 34th Street Kansas City, MO 1 U.S. Government 98,073 100.0% 1,919 11,487 7,594 3/31/1997 1995
66 1220 Echelon Parkway Jackson, MS 1 U.S. Government 109,819 100.0% 3,974 25,946 22,487 7/25/2012 2009
67 10-12 Celina Avenue Nashua, NH 1 U.S. Government 321,800 100.0% 2,433 18,597 15,641 8/31/2009 1997
68 50 West State Street Trenton, NJ 1 State 266,995 84.6% 6,469 45,823 38,874 12/30/2010 1989
69 138 Delaware Avenue Buffalo, NY 1 U.S. Government 121,711 63.6% 1,612 28,530 17,466 3/31/1997 2014
70 Airline Corporate Center Colonie, NY 1 State 64,000 100.0% 1,061 7,222 6,341 6/22/2012 2004
71 5000 Corporate Court Holtsville, NY 1 U.S. Government 264,482 85.7% 5,982 26,718 23,535 8/31/2011 2000
72 305 East 46th Street New York, NY 1 Other Government 187,060 100.0% 10,290 107,899 96,687 5/27/2011 2008
73 4600 25th Avenue Salem, OR 1 State 233,358 97.8% 5,147 10,661 6,390 12/20/2011 2007
See notes on page 36.
Government Properties Income Trust
Supplemental Operating and Financial Data, December 31, 2017
CONSOLID
ATED PROPERT
Y DE
TAI
L (Continued
)
36
EXHIBIT ACONSOLIDATED PROPERTY DETAIL
(sorted by location)
(1) The data presented exclude two properties (three buildings) owned by two unconsolidated joint ventures in which we own 50% and 51% interests. See page 19 for more information regarding these joint ventures.
(2) Annualized rental income is calculated using the annualized contractual base rents from our tenants pursuant to our lease agreements as of December 31, 2017, plus straight line rent adjustments and estimated recurring expense
reimbursements to be paid to us, and excluding lease value amortization.
(3) Date acquired is the date we acquired the property or the date our former parent entity acquired the property for those properties that our former parent entity contributed to us in June 2009 in connection with our initial public offering.
(4) Rentable square footage excludes an expansion being constructed prior to the commencement of the lease.
As of December 31, 2017 (1)
(dollars in thousands)
Annualized Year Built or
No. of Primary Rentable Rental Undepreciated Depreciated Date Most Recent
Property Location Buildings Tenant Type Sq. Ft. % Leased Income (2) Carrying Value Carrying Value Acquired (3) Renovation
74 Synergy Business Park Columbia, SC 3 State 180,703 93.3% 2,192 17,385 13,667 5/10/2006;9/17/2010 1985
75 One Memphis Place Memphis, TN 1 U.S. Government 204,694 72.3% 2,858 9,783 8,349 9/17/2010 1985
76 701 Clay Road Waco, TX 1 U.S. Government 138,608 100.0% 2,993 13,293 8,584 12/23/1997 1997
77 14660, 14672 & 14668 Lee Road Chantilly, VA 3 Government Contractor 409,478 98.5% 13,591 81,474 79,618 12/22/2016 1998
78 1408 Stephanie Way Chesapeake, VA 1 Government Contractor 53,541 100.0% 841 3,958 3,936 10/2/2017 2000
79 1434 Crossways Chesapeake, VA 2 Non-Government 213,955 100.0% 3,977 23,420 23,284 10/2/2017 2002
80 1441 Crossways Boulevard Chesapeake, VA 1 U.S. Government 144,512 100.0% 2,717 12,674 12,601 10/2/2017 1988
81 535 Independence Parkway Chesapeake, VA 1 Non-Government 96,720 100.0% 1,173 8,266 8,224 10/2/2017 1987
82 Crossways Chesapeake, VA 4 Non-Government 586,768 100.0% 7,746 46,789 46,471 10/2/2017 1989
83 Crossways II Chesapeake, VA 1 Non-Government 84,799 53.2% 1,080 9,821 9,764 10/2/2017 1989
84 Greenbrier Circle Corporate Center Chesapeake, VA 2 Non-Government 231,814 92.2% 3,603 19,652 19,526 10/2/2017 1981
85 Greenbrier Technology Center I Chesapeake, VA 1 Non-Government 97,194 87.7% 1,412 8,616 8,566 10/2/2017 1987
86 Greenbrier Technology Center II Chesapeake, VA 1 Non-Government 82,229 100.0% 1,492 7,668 7,622 10/2/2017 1987
87 Greenbrier Towers Chesapeake, VA 2 Non-Government 171,762 94.0% 3,411 14,705 14,611 10/2/2017 1985
88 Enterchange at Meadowville Chester, VA 1 U.S. Government 228,108 100.0% 1,526 11,355 10,295 8/28/2013 2011
89 3201 Jermantown Road Fairfax, VA 1 Non-Government 183,529 77.8% 4,516 31,939 31,725 10/2/2017 2011
90 3920 Pender Drive Fairfax, VA 1 U.S. Government 83,130 100.0% 2,502 15,815 14,611 3/21/2014 2011
91 Pender Business Park Fairfax, VA 4 State 171,061 96.2% 4,011 24,108 21,796 11/4/2013 2000
92 7987 Ashton Avenue Manassas, VA 1 Other Government 69,374 100.0% 1,654 10,148 9,938 1/3/2017 1989
93 Gateway II Norfolk, VA 1 Non-Government 42,997 80.7% 449 2,757 2,744 10/2/2017 1984
94 Norfolk Business Center Norfolk, VA 1 Non-Government 90,267 80.3% 1,087 7,564 7,519 10/2/2017 1985
95 Norfolk Commerce Park II Norfolk, VA 1 Non-Government 129,411 100.0% 2,103 13,859 13,783 10/2/2017 1990
96 1759 & 1760 Business Center Drive Reston, VA 2 U.S. Government 406,388 100.0% 12,377 90,137 82,952 5/28/2014 1996
97 1775 Wiehle Avenue Reston, VA 1 Non-Government 129,982 87.3% 4,441 30,287 30,123 10/2/2017 2001
98 9960 Mayland Drive Richmond, VA 1 State 173,932 94.4% 3,338 20,388 18,838 5/20/2014 1994
99 Aquia Commerce Center Stafford, VA 2 U.S. Government 64,656 100.0% 1,826 10,285 8,977 6/22/2011 1997
100 Atlantic Corporate Park Sterling, VA 2 U.S. Government 220,995 96.6% 6,033 35,075 34,892 10/2/2017 2008
101 Sterling Business Park Lots 8 & 9 Sterling, VA 1 U.S. Government 167,440 100.0% 5,504 53,502 53,225 10/2/2017 2016
102 Sterling Park Business Center Sterling, VA 7 Non-Government 475,738 97.9% 6,554 40,189 40,034 10/2/2017 2011
103 65 Bowdoin Street S. Burlington, VT 1 U.S. Government 26,609 100.0% 1,118 9,236 7,580 4/9/2010 2009
104 840 North Broadway Everett, WA 2 State 111,908 100.0% 2,699 20,565 18,061 6/28/2012 1990
105 Stevens Center Richland, WA 2 U.S. Government 140,152 100.0% 2,839 23,436 14,261 3/31/1997 1995
106 11050 West Liberty Drive Milwaukee, WI 1 U.S. Government 29,297 100.0% 801 5,587 4,824 6/9/2011 2006
107 882 TJ Jackson Drive Falling Waters, WV 1 Vacant 40,348 —% — 5,074 2,964 3/31/1997 1993
108 5353 Yellowstone Road Cheyenne, WY 1 U.S. Government 106,107 100.0% 2,156 10,682 6,244 3/31/1997 1995
167 17,499,338 94.2% $ 426,645 $ 2,975,721 $ 2,633,873