EX-99.2 3 gov093017exhibit992.htm EXHIBIT 99.2 gov093017exhibit992
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, September 30, 2017 TABLE OF CONTENT S 2 TABLE OF CONTENTS CORPORATE INFORMATION PAGE/EXHIBIT Company Profile 6 Investor Information 7 Research Coverage 8 FINANCIALS Key Financial Data 10 Condensed Consolidated Balance Sheets 11 Condensed Consolidated Statements of Income 12 Condensed 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 Calculation of Property Net Operating Income (NOI) and Cash Basis NOI 19 Calculation of Same Property NOI and Cash Basis NOI 20 Calculation of EBITDA and Adjusted EBITDA 21 Calculation of Funds from Operations (FFO) and Normalized FFO 22 Definitions of Certain Non-GAAP Financial Measures Definitions 23 PORTFOLIO INFORMATION Portfolio Summary 25 Summary Consolidated and Same Property Results 26 Occupancy and Leasing Summary 28 Leasing Analysis by Tenant Type 29 Tenant List 30 Lease Expiration Schedule 31 EXHIBIT Property Detail A


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 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 THE AMOUNT OF SUCH DISTRIBUTIONS, • OUR EXPECTATION THAT WE BENEFIT FINANCIALLY 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 OR GOVERNMENT CONTRACTOR TENANTS, • OUR EXPECTATIONS REGARDING DEMAND FOR LEASED SPACE BY THE U.S. GOVERNMENT AND STATE AND LOCAL GOVERNMENTS, • OUR ABILITY TO RAISE EQUITY OR DEBT 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 ACQUISTION, THE FPO TRANSACTION, • OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF THE RMR GROUP INC., OR RMR INC., • OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF 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, NORMALIZED FUNDS FROM OPERATIONS, OR NORMALIZED FFO, NET OPERATING INCOME, OR NOI, 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 CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR TENANTS, • COMPETITION WITHIN THE REAL ESTATE INDUSTRY, PARTICULARLY WITH RESPECT TO 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 TRUSTEES, 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, September 30, 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 DISTRIBUTIONS TO OUR SHAREHOLDERS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES AND LEASE THEM FOR RENTS, LESS THEIR PROPERTY OPERATING EXPENSES, 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, • 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 CREDIT FACILITIES WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF FEES AND EXPENSES ASSOCIATED WITH SUCH FACILITIES, • 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. BOTH MOODY'S AND 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, 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 OUR 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 DISTRIBUTION 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 • WE EXPECT TO SPEND, AS OF SEPTEMBER 30, 2017, AN ADDITIONAL $3.3 MILLION TO COMPLETE THE REDEVELOPMENT AND EXPANSION OF A PROPERTY WE OWN PRIOR TO THE COMMENCEMENT OF THE LEASE FOR THAT PROPERTY. IN ADDITION, AS OF SEPTEMBER 30, 2017, WE HAVE ESTIMATED UNSPENT LEASING RELATED OBLIGATIONS OF $26.6 MILLION, EXCLUDING THE ESTIMATED DEVELOPMENT COSTS NOTED IN THE PRECEDING SENTENCE. IT IS DIFFICULT TO ACCURATELY ESTIMATE DEVELOPMENT AND TENANT SPACE PREPARATION COSTS. THIS DEVELOPMENT PROJECT AND OUR UNSPENT LEASING RELATED OBLIGATIONS MAY COST MORE OR LESS AND MAY TAKE LONGER TO COMPLETE THAN WE CURRENTLY EXPECT, AND WE MAY INCUR INCREASING 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, September 30, 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, September 30, 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 owns properties leased primarily to the U.S. government and state governments located throughout the United States. The majority of our properties are office buildings. As of September 30, 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 which owns properties that are primarily leased to single tenants. 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 September 30, 2017, RMR had $28.5 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 53,000 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) See page 22 for the calculation of Normalized FFO and a reconciliation of net income determined in accordance with U.S. generally accepted accounting principles, or GAAP, to this amount. Total Properties 74 (96 buildings) Total sq. ft. 11,517 Percent Leased 95.0% Q3 2017 Total Rental Income $70,179 Q3 2017 Net Income $10,989 Q3 2017 Normalized FFO (1) $39,602 Key data (as of 9/30/2017): (dollars and sq. ft. in 000s)


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 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 Barry M. Portnoy Jeffrey P. Somers Managing Trustee 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, September 30, 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, September 30, 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, September 30, 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 19 for the calculation of NOI and a reconciliation of net income determined in accordance with GAAP to that amount. (3) See page 21 for the calculation of Adjusted EBITDA and a reconciliation of net income determined in accordance with GAAP to that amount. (4) See page 22 for the calculation of FFO and Normalized FFO and a reconciliation of net income 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 9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 Selected Balance Sheet Data: Total gross assets (1) $ 3,868,036 $ 2,685,114 $ 2,685,291 $ 2,681,870 $ 2,551,044 Total assets $ 3,536,967 $ 2,365,109 $ 2,377,050 $ 2,385,066 $ 2,265,070 Total liabilities $ 2,159,440 $ 1,456,430 $ 1,448,480 $ 1,450,062 $ 1,314,330 Total shareholders' equity $ 1,377,527 $ 908,679 $ 928,570 $ 935,004 $ 950,740 Selected Income Statement Data: Rental income $ 70,179 $ 69,887 $ 69,296 $ 66,030 $ 64,478 Net income $ 10,989 $ 11,677 $ 7,415 $ 12,065 $ 11,578 NOI (2) $ 41,042 $ 42,587 $ 42,521 $ 39,939 $ 37,550 Adjusted EBITDA (3) $ 51,916 $ 52,160 $ 51,893 $ 49,424 $ 47,122 FFO (4) $ 40,357 $ 41,282 $ 37,713 $ 40,637 $ 38,512 Normalized FFO (4) $ 39,602 $ 42,412 $ 39,899 $ 41,533 $ 38,590 Per Share Data (basic and diluted): Net income $ 0.11 $ 0.16 $ 0.10 $ 0.17 $ 0.16 FFO (4) $ 0.42 $ 0.58 $ 0.53 $ 0.57 $ 0.54 Normalized FFO (4) $ 0.41 $ 0.60 $ 0.56 $ 0.58 $ 0.54 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) 9.2% 9.4% 8.2% 9.0% 7.6% Normalized FFO payout ratio (4) 104.9% 71.7% 76.8% 74.1% 79.6%


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 CONDENSED CONSOLID ATED BALANCE SHEET S 11 CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share data) September 30, December 31, 2017 2016 ASSETS Real estate properties: Land $ 269,332 $ 267,855 Buildings and improvements 1,660,379 1,620,905 Total real estate properties, gross 1,929,711 1,888,760 Accumulated depreciation (331,069) (296,804) Total real estate properties, net 1,598,642 1,591,956 Equity investment in Select Income REIT 475,265 487,708 Assets of discontinued operations — 12,541 Acquired real estate leases, net 99,953 124,848 Deposit escrow for FPO acquisition 651,696 — Cash and cash equivalents 551,707 29,941 Restricted cash 509 530 Rents receivable, net 47,461 48,458 Deferred leasing costs, net 22,250 21,079 Other assets, net 89,484 68,005 Total assets $ 3,536,967 $ 2,385,066 LIABILITIES AND SHAREHOLDERS’ EQUITY Unsecured revolving credit facility $ 565,000 $ 160,000 Unsecured term loans, net 547,682 547,171 Senior unsecured notes, net 943,543 646,844 Mortgage notes payable, net 26,561 27,837 Liabilities of discontinued operations — 45 Accounts payable and other liabilities 63,525 54,019 Due to related persons 4,297 3,520 Assumed real estate lease obligations, net 8,832 10,626 Total liabilities 2,159,440 1,450,062 Commitments and contingencies 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 1,968,249 1,473,533 Cumulative net income 126,410 96,329 Cumulative other comprehensive income 46,980 26,957 Cumulative common distributions (765,103) (662,527) Total shareholders’ equity 1,377,527 935,004 Total liabilities and shareholders’ equity $ 3,536,967 $ 2,385,066


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 CONDENSED CONSOLID ATED S TA TEMENTS OF INCOME 12 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (dollars and share amounts in thousands, except per share data) (1) General and administrative expenses for the three months ended September 30, 2017 include the reversal of $893 of previously accrued estimated business management incentive fees. (2) 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. (3) 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 September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Rental income  $ 70,179 $ 64,478 $ 209,362 $ 192,150 Expenses: Real estate taxes 8,862 7,591 24,980 22,810 Utility expenses 5,408 5,483 14,186 13,330 Other operating expenses 14,867 13,854 44,046 40,031 Depreciation and amortization 20,781 18,404 61,949 54,713 Loss on impairment of real estate 230 — 230 — Acquisition related costs — 147 — 363 General and administrative (1) 3,266 3,816 12,314 11,350 Total expenses 53,414 49,295 157,705 142,597 Operating income 16,765 15,183 51,657 49,553 Dividend income 304 304 911 667 Interest income 1,715 47 1,843 63 Interest expense (including net amortization of debt premiums and discounts and debt issuance costs of $990, $805, $2,605 and $2,024, respectively) (16,055) (12,608) (43,599) (32,286) (Loss) gain on early extinguishment of debt (1,715) — (1,715) 104 Gain on issuance of shares by Select Income REIT 51 72 72 88 Income from continuing operations before income taxes and equity in earnings of investees 1,065 2,998 9,169 18,189 Income tax expense (22) (13) (65) (63) Equity in earnings of investees 9,484 8,668 20,804 28,002 Income from continuing operations 10,527 11,653 29,908 46,128 Income (loss) from discontinued operations 462 (154) 173 (429) Income before gain on sale of property 10,989 11,499 30,081 45,699 Gain on sale of property — 79 — 79 Net income $ 10,989 $ 11,578 $ 30,081 $ 45,778 Weighted average common shares outstanding (basic) 96,883 71,054 79,778 71,041 Weighted average common shares outstanding (diluted) 96,958 71,084 79,852 71,064 Per common share amounts (basic and diluted): Income from continuing operations $ 0.11 $ 0.16 $ 0.37 $ 0.65 Income (loss) from discontinued operations $ — $ — $ — $ (0.01) Net income $ 0.11 $ 0.16 $ 0.38 $ 0.64 Additional Data: General and administrative expenses (1)/ rental income 4.65% 5.92% 5.88% 5.91% General and administrative expenses (1)/ total assets (at end of period) 0.09% 0.17% 0.35% 0.50% Non-cash straight line rent adjustments (2) $ 711 $ 1,205 $ 3,115 $ 1,789 Lease value amortization included in rental income (2) $ (619) $ (370) $ (1,863) $ (1,103) Non-cash amortization included in other operating expenses (3) $ 121 $ 121 $ 363 $ 363 Non-cash amortization included in general and administrative expenses (3) $ 151 $ 151 $ 452 $ 452


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 CONDENSED CONSOLID ATED S TA TEMENTS OF CASH FLOW S 13 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollar amounts in thousands) For the Nine Months Ended September 30, 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 30,081 $ 45,778 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 35,460 31,611 Net amortization of debt premiums and discounts and debt issuance costs 2,605 2,024 Gain on sale of property — (79) Loss (gain) on early extinguishment of debt 1,715 (104) Straight line rental income (3,115) (1,789) Amortization of acquired real estate leases 25,592 21,948 Amortization of deferred leasing costs 2,790 2,343 Other non-cash expenses, net 352 500 Loss on impairment of real estate 230 — Increase in carrying value of property included in discontinued operations (619) — Equity in earnings of investees (20,804) (28,002) Gain on issuance of shares by Select Income REIT (72) (88) Distributions of earnings from Select Income REIT 18,062 25,676 Change in assets and liabilities: Restricted cash 21 508 Deferred leasing costs (2,846) (7,998) Rents receivable 3,839 (126) Other assets (7,045) (1,466) Accounts payable and accrued expenses 6,703 (150) Due to related persons 777 1,088 Net cash provided by operating activities 93,726 91,674 CASH FLOWS FROM INVESTING ACTIVITIES: Real estate acquisitions and deposits (666,202) (83,705) Real estate improvements (29,377) (23,357) Distributions in excess of earnings from Select Income REIT 20,063 11,951 Proceeds from sale of properties, net 13,198 263 Net cash used in investing activities (662,318) (94,848) CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of mortgage notes payable (1,150) (107,562) Proceeds from issuance of senior notes, after discounts 297,954 300,235 Proceeds from issuance of common shares, net 493,936 — Borrowings on unsecured revolving credit facility 610,000 254,000 Repayments on unsecured revolving credit facility (205,000) (346,000) Payment of debt issuance costs (2,551) (464) Repurchase of common shares (255) (312) Distributions to common shareholders (102,576) (91,759) Net cash provided by financing activities 1,090,358 8,138 Increase in cash and cash equivalents 521,766 4,964 Cash and cash equivalents at beginning of period 29,941 8,785 Cash and cash equivalents at end of period $ 551,707 $ 13,749 Supplemental cash flow information: Interest paid $ 42,019 $ 32,599 Income taxes paid $ 100 $ 94 Non-cash investing activities: Sale of property $ — $ 3,600 Mortgage note receivable related to sale of property $ — $ (3,600)


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 DEBT SUMMA RY 14 DEBT SUMMARY (dollars in thousands) As of September 30, 2017 (1) Reflects the interest rate stated in, or determined pursuant to, the contract terms. (2) 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. (3) Principal balances exclude unamortized premiums, discounts and issuance costs related to these debts. Total debt outstanding as of September 30, 2017, net of unamortized premiums and discounts and certain issuance costs totaling $18,572, was $2,082,786. (4) 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 September 30, 2017. Subject to meeting certain conditions and payment of a fee, we may extend the maturity date to January 31, 2020. (5) We are required to pay interest on the amounts outstanding under our $300,000 unsecured 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 September 30, 2017. Our $300,000 unsecured term loan is prepayable without penalty at any time. (6) We are required to pay interest on the amounts outstanding under our $250,000 unsecured 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 September 30, 2017. Our $250,000 unsecured term loan is prepayable without penalty at any time. (7) 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. (8) On October 2, 2017, we acquired FPO. In connection with that acquisition, we assumed $167,549 of mortgage debt. In addition, two properties owned by joint ventures in which we acquired FPO's 50% and 51% interests are encumbered by two mortgage notes totaling $82,000. These mortgage debts are not included in the table above. Coupon Interest Principal Maturity Due at Years to Rate (1) Rate (2) Balance (3) Date Maturity Maturity Unsecured Floating Rate Debt: $750,000 unsecured revolving credit facility (4) (7) 2.446% 2.446% $ 565,000 1/31/2019 $ 565,000 1.3 $300,000 unsecured term loan (5) (7) 2.635% 2.635% 300,000 3/31/2020 300,000 2.5 $250,000 unsecured term loan (6) (7) 3.035% 3.035% 250,000 3/31/2022 250,000 4.5 Total / weighted average 2.629% 2.629% 1,115,000 1,115,000 2.3 Unsecured Fixed Rate Debt: Senior unsecured notes due 2019 3.750% 3.930% 350,000 8/15/2019 350,000 1.9 Senior unsecured notes due 2022 4.000% 4.000% 300,000 7/15/2022 300,000 4.8 Senior unsecured notes due 2046 5.875% 5.875% 310,000 5/1/2046 310,000 28.6 Total / weighted average 4.514% 4.580% 960,000 960,000 11.4 Secured Fixed Rate Debt: (8) Mortgage debt - One building in Fairfax, VA 5.877% 5.877% 13,756 8/11/2021 12,702 3.9 Mortgage debt - One building in Tampa, FL 7.000% 5.150% 8,288 3/1/2019 7,890 1.4 Mortgage debt - One building in Lakewood, CO 8.150% 6.150% 4,314 3/1/2021 — 3.4 Total / weighted average 6.602% 5.693% 26,358 20,592 3.0 Total / weighted average 3.540% 3.559% $ 2,101,358 $ 2,095,592 6.5


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 DEBT M ATURIT Y SCHEDUL E 15 DEBT MATURITY SCHEDULE (dollars in thousands) As of September 30, 2017 (1) 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. On October 2, 2017, we acquired FPO. In connection with that acquisition, we assumed $167,549 of mortgage debt. In addition, two properties owned by joint ventures in which we acquired FPO's 50% and 51% interests are encumbered by two mortgage notes totaling $82,000. These mortgage debts are not included in the table above. (2) Our total debt as of September 30, 2017, net of unamortized premiums and discounts and certain issuance costs totaling $18,572, was $2,082,786. (3) Represents amounts outstanding under our $750,000 revolving credit facility at September 30, 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. (4) Represents the outstanding balance of our $300,000 unsecured term loan at September 30, 2017. We may prepay this term loan without penalty at any time. (5) Represents the outstanding balance of our $250,000 unsecured term loan at September 30, 2017. We may prepay this term loan without penalty at any time. Unsecured Unsecured Secured Floating Fixed Rate Fixed Rate Year Rate Debt (1) Debt (1) Debt (1) Total (2) 2017 $ — $ — $ 399 $ 399 2018 — — 1,671 1,671 2019 565,000 (3) 350,000 9,439 924,439 2020 300,000 (4) — 1,619 301,619 2021 — — 13,230 13,230 2022 250,000 (5) 300,000 — 550,000 2046 — 310,000 — 310,000 Total $ 1,115,000 $ 960,000 $ 26,358 $ 2,101,358 Percent of total debt 53.1% 45.7% 1.2% 100.0%


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 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. On October 2, 2017, we acquired FPO. In connection with that acquisition, we assumed $167,549 of mortgage debt. In addition, two properties owned by joint ventures in which we acquired FPO's 50% and 51% interests are encumbered by two mortgage notes totaling $82,000. These mortgage debts are not included in the table above. (2) Total gross assets is total assets plus accumulated depreciation. (3) As of September 30, 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 September 30, 2017 was $23.42 per share. (4) Total market capitalization is total debt plus the market value of our common shares at the end of each period. (5) See page 21 for the calculation of Adjusted EBITDA and a reconciliation of net income 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 property, gains or losses on equity issuance by SIR and equity earnings in SIR and including distributions received from SIR, if any, determined together with debt service on a pro forma basis for the four consecutive fiscal quarters most recently ended. As of and for the Three Months Ended 9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 Leverage Ratios: Total debt (book value) (1) / total gross assets (2) 53.8% 51.3% 51.5% 51.5% 48.9% Total debt (book value) (1) / total gross assets (2) including market value of SIR common shares (3) 52.4% 49.1% 48.6% 49.0% 45.7% Total debt (book value) (1) / total market capitalization (4) 52.8% 51.4% 48.1% 50.4% 43.6% Secured debt (book value) (1) / total assets 0.8% 1.1% 1.2% 1.2% 1.2% Variable rate debt (book value) (1) / total debt (book value) (1) 53.4% 51.0% 51.2% 51.2% 45.9% Coverage Ratios: Adjusted EBITDA (5) / interest expense 3.2x 3.7x 3.8x 3.9x 3.7x Total debt (book value) (1) / Annualized Adjusted EBITDA (5) 10.0x 6.6x 6.7x 7.0x 6.6x Public Debt Covenants: Total debt (1) / adjusted total assets (6) - allowable maximum 60.0% 51.5% 47.9% 47.6% 48.2% 45.1% Secured debt (1) / adjusted total assets (6) - allowable maximum 40.0% 0.7% 0.9% 0.9% 1.0% 1.0% Consolidated income available for debt service (7) / debt service - required minimum 1.50x 3.9x 4.0x 4.1x 4.2x 3.9x Total unencumbered assets (6) to unsecured debt (1)- required minimum 150.0% 193.7% 208.1% 209.4% 207.2% 221.7%


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 SUMMA RY OF CAPI TA L EXPENDITURE S 17 SUMMARY OF CAPITAL EXPENDITURES (dollars and sq. ft. in thousands, except per sq. ft. data) (1) Tenant improvements include capital expenditures used to improve tenants' space or amounts paid directly to tenants to improve their space. (2) Leasing costs include leasing related costs, such as brokerage commissions and tenant inducements. (3) Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets. (4) 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. (5) Rentable square footage is subject to changes when space is re-measured or re-configured for tenants. For the Three Months Ended 9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 Tenant improvements (1) $ 3,213 $ 1,076 $ 2,403 $ 3,550 $ 5,636 Leasing costs (2) 1,993 971 1,087 1,947 655 Building improvements (3) 2,640 4,465 1,778 2,570 3,009 Recurring capital expenditures 7,846 6,512 5,268 8,067 9,300 Development, redevelopment and other activities (4) 3,132 6,949 6,281 3,597 1,292 Total capital expenditures $ 10,978 $ 13,461 $ 11,549 $ 11,664 $ 10,592 Average sq. ft. during period (5) 11,516 11,514 11,477 11,196 10,968 Building improvements per average sq. ft. during period $ 0.23 $ 0.39 $ 0.15 $ 0.23 $ 0.27


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 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) 39 74 6,454 1,374,624 213 7.0% 4.7 93.3% 415 tenants Total / Weighted Average 40 75 6,523 $ 1,387,244 $ 396 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 39 office properties located in Maryland, Washington, D.C. and Virginia, two of which are owned by joint ventures in which GOV acquired FPO's 50% and 51% interests. 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, September 30, 2017 CALCUL ATION OF PROPERT Y NET OPER ATING INCOME (NOI) AND CASH BASIS NOI 19 CALCULATION OF PROPERTY NET OPERATING INCOME (NOI) AND CASH BASIS NOI (1) (dollars in thousands) (1) See Definitions of Certain Non-GAAP Financial Measures on page 23 for the definitions of NOI and Cash Basis NOI, a description of why we believe they are appropriate supplemental measures and a description of how we use these measures. (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 Nine Months Ended 9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 9/30/2017 9/30/2016 Calculation of NOI and Cash Basis NOI (2): Rental income (3) $ 70,179 $ 69,887 $ 69,296 $ 66,030 $ 64,478 $ 209,362 $ 192,150 Property operating expenses (29,137) (27,300) (26,775) (26,091) (26,928) (83,212) (76,171) Property net operating income (NOI) 41,042 42,587 42,521 39,939 37,550 126,150 115,979 Non-cash straight line rent adjustments included in rental income (3) (711) (1,104) (1,300) (902) (1,205) (3,115) (1,789) Lease value amortization included in rental income (3) 619 617 627 355 370 1,863 1,103 Non-cash amortization included in property operating expenses (4) (121) (121) (121) (121) (121) (363) (363) Cash Basis NOI $ 40,829 $ 41,979 $ 41,727 $ 39,271 $ 36,594 $ 124,535 $ 114,930 Reconciliation of Net Income to NOI and Cash Basis NOI: Net income $ 10,989 $ 11,677 $ 7,415 $ 12,065 $ 11,578 $ 30,081 $ 45,778 Gain on sale of property — — — — (79) — (79) Income before gain on sale of property 10,989 11,677 7,415 12,065 11,499 30,081 45,699 (Income) loss from discontinued operations (462) 145 144 160 154 (173) 429 Income from continuing operations 10,527 11,822 7,559 12,225 11,653 29,908 46,128 Equity in earnings of investees (9,484) (8,581) (2,739) (7,516) (8,668) (20,804) (28,002) Income tax expense 22 25 18 38 13 65 63 Net (gain) loss on issuance of shares by SIR (51) (21) — 2 (72) (72) (88) Loss (gain) on early extinguishment of debt 1,715 — — — — 1,715 (104) Interest expense 16,055 13,963 13,581 12,774 12,608 43,599 32,286 Interest income (1,715) (67) (61) (95) (47) (1,843) (63) Dividend income (304) (303) (304) (304) (304) (911) (667) Operating income 16,765 16,838 18,054 17,124 15,183 51,657 49,553 General and administrative 3,266 5,086 3,962 3,547 3,816 12,314 11,350 Acquisition related costs — — — 828 147 — 363 Loss on impairment of real estate 230 — — — — 230 — Depreciation and amortization 20,781 20,663 20,505 18,440 18,404 61,949 54,713 NOI 41,042 42,587 42,521 39,939 37,550 126,150 115,979 Non-cash amortization included in property operating expenses (4) (121) (121) (121) (121) (121) (363) (363) Lease value amortization included in rental income (3) 619 617 627 355 370 1,863 1,103 Non-cash straight line rent adjustments included in rental income (3) (711) (1,104) (1,300) (902) (1,205) (3,115) (1,789) Cash Basis NOI $ 40,829 $ 41,979 $ 41,727 $ 39,271 $ 36,594 $ 124,535 $ 114,930


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 CALCUL ATION OF SAME PROPERT Y NOI AND CASH BASIS NOI 20 CALCULATION OF SAME PROPERTY NOI AND CASH BASIS NOI (1) (dollars in thousands) (1) See Definitions of Certain Non-GAAP Financial Measures on page 23 for the definitions of NOI and 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 properties we owned as of September 30, 2017 and which we owned continuously since July 1, 2016. (3) Based on properties we owned as of September 30, 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 Nine Months Ended (3) 9/30/2017 9/30/2016 9/30/2017 9/30/2016 Reconciliation of Property NOI to Same Property NOI: (4) Rental income $ 70,179 $ 64,478 $ 209,362 $ 192,150 Property operating expenses (29,137) (26,928) (83,212) (76,171) Property NOI 41,042 37,550 126,150 115,979 Less: NOI of properties not included in same property results (2,529) — (12,720) (3,364) Same property NOI $ 38,513 $ 37,550 $ 113,430 $ 112,615 Calculation of Same Property Cash Basis NOI: Same property NOI $ 38,513 $ 37,550 $ 113,430 $ 112,615 Add: Lease value amortization included in rental income (5) 392 370 1,271 1,112 Less: Non-cash straight line rent adjustments included in rental income (5) (549) (1,205) (2,349) (1,612) Non-cash amortization included in property operating expenses (6) (121) (121) (363) (363) Same property Cash Basis NOI $ 38,235 $ 36,594 $ 111,989 $ 111,752


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 CALCUL ATION OF EBITD A AND ADJUSTED EBITD A 21 CALCULATION OF EBITDA AND ADJUSTED EBITDA (1) (dollars in thousands) (1) See Definitions of Certain Non-GAAP Financial Measures on page 23 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 Inc.'s operating subsidiary, 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 condensed consolidated statements of income. In calculating net income 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, 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. Incentive fees for 2017, if any, will be payable in cash in January 2018. For the Three Months Ended For the Nine Months Ended 9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 9/30/2017 9/30/2016 Net income $ 10,989 $ 11,677 $ 7,415 $ 12,065 $ 11,578 $ 30,081 $ 45,778 Add: Interest expense 16,055 13,963 13,581 12,774 12,608 43,599 32,286 Income tax expense 22 25 18 38 13 65 63 Depreciation and amortization 20,781 20,663 20,505 18,440 18,404 61,949 54,713 EBITDA 47,847 46,328 41,519 43,317 42,603 135,694 132,840 Add (less): Acquisition related costs — — — 828 147 — 363 General and administrative expense paid in common shares (2) 432 459 277 55 470 1,168 1,314 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 230 — — — — 230 — Distributions received from SIR 12,708 12,708 12,708 12,708 12,708 38,125 37,627 Gain (loss) on early extinguishment of debt 1,715 — — — — 1,715 (104) Equity in earnings of SIR (9,453) (8,207) (2,611) (7,486) (8,655) (20,271) (27,895) Gain (loss) on issuance of shares by SIR (51) (21) — 2 (72) (72) (88) Gain on sale of property — — — — (79) — (79) Adjusted EBITDA $ 51,916 $ 52,160 $ 51,893 $ 49,424 $ 47,122 $ 155,970 $ 143,978


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 CALCUL ATION OF FUNDS FROM OPER ATIONS (FFO) AND NORMALIZED FF O 22 CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO (1) (amounts in thousands, except per share data) (1) See Definitions of Certain Non-GAAP Financial Measures on page 23 for the definitions of FFO and Normalized FFO, 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 condensed consolidated statements of income. In calculating net income 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, we do not include such expense in the calculation of Normalized FFO until the fourth quarter, when the amount of the business management incentive fee expense for the calendar year, if any, is determined. Incentive fees for 2017, if any, will be payable in cash in January 2018. For the Three Months Ended For the Nine Months Ended 9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 9/30/2017 9/30/2016 Net income $ 10,989 $ 11,677 $ 7,415 $ 12,065 $ 11,578 $ 30,081 $ 45,778 Add: Depreciation and amortization 20,781 20,663 20,505 18,440 18,404 61,949 54,713 FFO attributable to SIR investment 18,429 17,149 12,404 17,618 17,264 47,982 53,609 Loss on impairment of real estate 230 — — — — 230 — Less: Equity in earnings of SIR (9,453) (8,207) (2,611) (7,486) (8,655) (20,271) (27,895) Increase in carrying value of property included in discontinued operations (619) — — — — (619) — Gain on sale of property — — — — (79) — (79) FFO 40,357 41,282 37,713 40,637 38,512 119,352 126,126 Add (less): Acquisition related costs — — — 828 147 — 363 Loss (gain) on early extinguishment of debt 1,715 — — — — 1,715 (104) Normalized FFO attributable to SIR investment 16,903 17,407 14,590 17,684 17,267 48,900 53,629 FFO attributable to SIR investment (18,429) (17,149) (12,404) (17,618) (17,264) (47,982) (53,609) (Gain) loss on issuance of shares by SIR (51) (21) — 2 (72) (72) (88) Estimated business management incentive fees (2) (893) 893 — — — — — Normalized FFO $ 39,602 $ 42,412 $ 39,899 $ 41,533 $ 38,590 $ 121,913 $ 126,317 Weighted average common shares outstanding (basic) 96,883 71,088 71,079 71,079 71,054 79,778 71,041 Weighted average common shares outstanding (diluted) 96,958 71,119 71,094 71,079 71,084 79,852 71,064 Per common share amounts: Net income (basic and diluted) $ 0.11 $ 0.16 $ 0.10 $ 0.17 $ 0.16 $ 0.38 $ 0.64 FFO (basic) $ 0.42 $ 0.58 $ 0.53 $ 0.57 $ 0.54 $ 1.50 $ 1.78 FFO (diluted) $ 0.42 $ 0.58 $ 0.53 $ 0.57 $ 0.54 $ 1.49 $ 1.77 Normalized FFO (basic and diluted) $ 0.41 $ 0.60 $ 0.56 $ 0.58 $ 0.54 $ 1.53 $ 1.78


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 NON-GAA P FINANCIA L MEASURES DEFINITION S 23 DEFINITIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES Definition of NOI and Cash Basis NOI We calculate NOI and Cash Basis NOI as shown on page 19. The calculations of NOI and Cash Basis NOI exclude certain components of net income in order to provide results that are more closely related to our property level results of operations. We define NOI as income from our rental of real estate less property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that we record as depreciation and amortization. We define Cash Basis NOI as NOI excluding non-cash straight line rent adjustments, lease value amortization and non-cash amortization included in other operating expenses. We consider NOI and Cash Basis NOI to be appropriate supplemental measures to net income because they may help both investors and management to understand the operations of our properties. We use NOI and Cash Basis NOI to evaluate individual and company wide property level performance, and we believe that NOI and 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. NOI and Cash Basis NOI do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income 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 and operating income as presented in our Condensed Consolidated Statements of Income. Other REITs and real estate companies may calculate NOI and Cash Basis NOI differently than we do. Definition of EBITDA and Adjusted EBITDA We calculate EBITDA and Adjusted EBITDA as shown on page 21. We consider EBITDA and Adjusted EBITDA to be appropriate supplemental measures of our operating performance, along with net income 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 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 and operating income as presented in our Condensed Consolidated Statements of Income. 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 and Normalized FFO as shown on page 22. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or NAREIT, which is net income, calculated in accordance with GAAP, plus real estate depreciation and amortization and the difference between FFO attributable to an equity investment and 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 properties, as well as certain other adjustments currently not applicable to us. Our calculation of Normalized FFO differs from NAREIT's definition of FFO 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 and Normalized FFO to be appropriate supplemental measures of operating performance for a REIT, along with net income and operating income. We believe that FFO and Normalized FFO provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO and Normalized FFO may facilitate a comparison of our operating performance between periods and with other REITs. FFO and Normalized FFO 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 and availability of cash to pay our obligations. FFO and Normalized FFO do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income 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 and operating income as presented in our Condensed Consolidated Statements of Income. Other REITs and real estate companies may calculate FFO and Normalized FFO differently than we do.


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 PORTFOLIO INFORMATION 24 Stevens Center, Richland, WA Square Feet: 140,152 Agency Occupant: Department of Energy


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 PORTFOLIO SUMMA RY 25 PORTFOLIO SUMMARY As of September 30, 2017 (1) (1) On October 2, 2017, we acquired First Potomac Realty Trust. The properties owned by FPO are not included in the information presented on this page. (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 19 for the calculation of NOI and Cash Basis NOI and a reconciliation of net income determined in accordance with GAAP to those amounts. % of Total % Rental Income % NOI % 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 9/30/2017 Ended 9/30/2017 (4) Ended 9/30/2017 (4) Properties majority leased to the U.S. Government 46 60 7,213,503 62.6% 96.5% 63.6% 60.6% 64.5% 65.8% Properties majority leased to state governments 20 26 3,018,415 26.2% 94.7% 26.1% 26.8% 22.9% 22.3% Properties majority leased to other government tenants 3 3 446,478 3.9% 97.1% 4.0% 6.3% 6.5% 5.4% Properties majority leased to government contractor tenants 1 3 409,478 3.6% 98.5% 3.7% 4.6% 5.1% 5.4% Properties majority leased to other tenants 2 2 319,382 2.8% 90.7% 2.6% 1.7% 1.4% 1.5% Other properties (currently vacant) 2 2 109,595 0.9% —% —% —% (0.4%) (0.4%) Total / Average 74 96 11,516,851 100.0% 95.0% 100.0% 100.0% 100.0% 100.0%


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 SUMMA RY CONSOLID ATED AND SAME PROPERT Y RESU LT S 26 SUMMARY CONSOLIDATED AND SAME PROPERTY RESULTS – THIRD QUARTER (dollars and sq. ft. in thousands) (1) Based on properties we owned as of September 30, 2017 and September 30, 2016, respectively, excluding one property (one building) classified as discontinued operations which was sold on August 31, 2017. (2) Based on properties we owned as of September 30, 2017 and which we owned continuously since July 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 19 for the calculation of NOI and Cash Basis NOI and a reconciliation of net income determined in accordance with GAAP to those amounts and see page 20 for a calculation and reconciliation of same property NOI and same property Cash Basis NOI. (7) NOI margin is defined as NOI as a percentage of rental income. Cash Basis NOI margin is defined as 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 9/30/2017 9/30/2016 9/30/2017 9/30/2016 Properties (end of period) 74 71 71 71 Total sq. ft. (3) 11,517 10,950 10,955 10,950 Percent leased (4) 95.0% 95.0% 94.8% 95.0% Rental income (5) $ 70,179 $ 64,478 $ 66,038 $ 64,478 NOI (6) $ 41,042 $ 37,550 $ 38,513 $ 37,550 Cash Basis NOI (6) $ 40,829 $ 36,594 $ 38,235 $ 36,594 NOI % margin (7) 58.5% 58.2% 58.3% 58.2% Cash Basis NOI % margin (7) 58.3% 57.5% 58.0% 57.5% NOI % change 9.3% — 2.6% — Cash Basis NOI % change 11.6% — 4.5% —


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 SUMMA RY CONSOLID ATED AND SAME PROPERT Y RESU LT S 27 SUMMARY CONSOLIDATED AND SAME PROPERTY RESULTS – NINE MONTHS (dollars and sq. ft. in thousands) (1) Based on properties we owned as of September 30, 2017 and September 30, 2016, respectively, excluding one property (one building) classified as discontinued operations which was sold on August 31, 2017. (2) Based on properties we owned as of September 30, 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 19 for the calculation of NOI and Cash Basis NOI and a reconciliation of net income determined in accordance with GAAP to those amounts and see page 20 for a calculation and reconciliation of same property NOI and same property Cash Basis NOI. (7) NOI margin is defined as NOI as a percentage of rental income. Cash Basis NOI margin is defined as 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 Nine Months Ended For the Nine Months Ended 9/30/2017 9/30/2016 9/30/2017 9/30/2016 Properties (end of period) 74 71 70 70 Total sq. ft. (3) 11,517 10,950 10,617 10,612 Percent leased (4) 95.0% 95.0% 95.0% 95.2% Rental income (5) $ 209,362 $ 192,150 $ 189,558 $ 186,298 NOI (6) $ 126,150 $ 115,979 $ 113,430 $ 112,615 Cash Basis NOI (6) $ 124,535 $ 114,930 $ 111,989 $ 111,752 NOI % margin (7) 60.3% 60.4% 59.8% 60.4% Cash Basis NOI % margin (7) 59.8% 60.0% 59.4% 60.1% NOI % change 8.8% — 0.7% — Cash Basis NOI % change 8.4% — 0.2% —


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 OCCU PANC Y AND LEASING SUMMA RY 28 OCCUPANCY AND LEASING SUMMARY (1) (dollars and sq. ft. in thousands, except per sq. ft. data) (1) Excludes one property (one building) classified as discontinued operations which was sold on August 31, 2017. (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 into during the periods indicated. As of and for the Three Months Ended 9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016 Properties (end of period) 74 74 74 73 71 Total sq. ft. (2) 11,517 11,516 11,512 11,443 10,950 Percentage leased 95.0% 95.0% 95.1% 95.1% 95.0% Leasing Activity (sq. ft.) (3): Government tenants 393 236 324 344 62 Non-government tenants 43 52 36 43 74 Total 436 288 360 387 136 % Change in GAAP Rent (4): Government tenants 0.2% 15.0% 4.5% 5.7% 10.5% Non-government tenants (11.1%) 6.6% 7.1% (19.1%) (3.8%) Total (0.6%) 13.5% 5.2% 4.3% 2.0% Leasing Cost and Concession Commitments (5)(6): Government tenants $ 6,629 $ 1,611 $ 879 $ 2,107 $ 1,087 Non-government tenants 1,273 854 1,362 1,348 2,341 Total $ 7,902 $ 2,465 $ 2,241 $ 3,455 $ 3,428 Leasing Cost and Concession Commitments per Sq. Ft. (5)(6): Government tenants $ 16.86 $ 6.82 $ 2.71 $ 6.13 $ 17.38 Non-government tenants $ 29.64 $ 16.33 $ 37.87 $ 31.05 $ 31.67 Total $ 18.12 $ 8.55 $ 6.22 $ 8.93 $ 25.12 Weighted Average Lease Term by Sq. Ft. (years): Government tenants 8.5 8.1 10.9 3.1 6.9 Non-government tenants 7.2 3.2 7.1 5.2 6.6 Total 8.4 7.2 10.6 3.3 6.8 Leasing Cost and Concession Commitments per Sq. Ft. per Year (3)(5)(6): Government tenants $ 1.98 $ 0.85 $ 0.25 $ 2.00 $ 2.50 Non-government tenants $ 4.10 $ 5.09 $ 5.36 $ 6.02 $ 4.77 Total $ 2.16 $ 1.19 $ 0.59 $ 2.70 $ 3.71


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 LEASING ANA LYSIS B Y TENANT TYP E 29 LEASING ANALYSIS BY TENANT TYPE (1) (1) Excludes one property (one building) classified as discontinued operations which was sold on August 31, 2017. (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 9/30/2017 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 6/30/2017 (2)(3) 6/30/2017 (2)(3) Expired Executed Executed Dispositions 9/30/2017 (2)(3) 9/30/2017 (2)(3) U.S. Government 6,653,571 60.8% (208,419) 203,911 2,187 — 6,651,250 60.8% State Government 2,505,085 22.9% — — — — 2,505,085 22.9% Other Government 371,202 3.4% (187,060) 187,060 — — 371,202 3.4% Government Contractor 416,369 3.8% — — — — 416,369 3.8% Other Tenants 990,819 9.1% (31,368) 25,689 17,255 — 1,002,395 9.1% 10,937,046 100.0% (426,847) 416,660 19,442 — 10,946,301 100.0%


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 TENANT LIS T 30 TENANT LIST As of September 30, 2017 (1) Rentable square footage is pursuant to leases existing as of September 30, 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. (2) Percentage of annualized rental income is calculated using annualized contractual base rents from our tenants pursuant to our lease agreements as of September 30, 2017, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. (3) Agency occupant cannot be disclosed. (4) 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. (1) Sq. Ft. (1) Rental Income (2) Tenant Sq. Ft. (1) Sq. Ft. (1) Rental Income (2) U.S. Government: State Governments: 1 Citizenship and Immigration Services 448,607 3.9% 8.0% 1 State of California - nine agency occupants 755,086 6.6% 7.7% 2 Internal Revenue Service 1,041,806 9.0% 7.8% 2 Commonwealth of Massachusetts - three agency occupants 307,119 2.7% 3.5% 3 U.S. Government (3) 406,388 3.5% 4.5% 3 State of Georgia - Department of Transportation 298,223 2.6% 2.4% 4 Federal Bureau of Investigation 304,425 2.6% 3.3% 4 Commonwealth of Virginia - seven agency occupants 255,241 2.2% 2.1% 5 Department of Justice 239,417 2.1% 2.9% 5 State of New Jersey - Department of Treasury 173,189 1.5% 1.7% 6 Centers for Disease Control (4) 352,876 3.1% 2.8% 6 State of Oregon - four agency occupants 199,018 1.7% 1.8% 7 Department of Veterans Affairs 281,525 2.4% 2.6% 7 State of Washington - Social and Health Services 111,908 1.0% 1.0% 8 Customs and Border Protection 243,162 2.1% 2.4% 8 State of Arizona - Northern Arizona University 66,743 0.6% 0.5% 9 Bureau of Land Management 304,831 2.6% 2.3% 9 State of South Carolina - four agency occupants 124,238 1.1% 0.5% 10 Defense Intelligence Agency 266,000 2.3% 1.9% 10 State of Maryland - two agency occupants 84,674 0.7% 0.5% 11 Social Security Administration 189,645 1.6% 1.7% 11 State of Minnesota - Minnesota State Lottery 61,426 0.5% 0.4% 12 Bureau of Reclamation 212,996 1.8% 1.7% 12 State of New York - Department of Agriculture 64,000 0.6% 0.4% 13 National Park Service 166,745 1.4% 1.6% 13 State of Kansas - Kansas University 4,220 0.0% 0.0% 14 U.S. Courts 114,219 1.0% 1.5% Subtotal State Governments 2,505,085 21.8% 22.4% 15 Immigration and Customs Enforcement 90,688 0.8% 1.3% 4 Other Government Tenants 371,202 3.2% 5.3% 16 Drug Enforcement Agency 93,177 0.8% 1.2% 4 Government Contractor Tenants 416,369 3.6% 5.0% 17 National Archives and Record Administration 352,064 3.1% 1.1% 148 Other Tenants 1,002,395 8.6% 7.5% 18 Department of Health and Human Services 108,849 0.9% 1.1% Subtotal Leased Rentable Square Feet 10,946,301 95.0% 100.0% 19 Department of Energy 140,152 1.2% 1.0% Available for Lease 570,550 5.0% —% 20 Defense Nuclear Facilities Board 60,133 0.5% 1.0% Total Rentable Square Feet 11,516,851 100.0% 100.0% 21 Department of State 89,058 0.8% 0.9% 22 U.S. Postal Service 321,800 2.8% 0.9% 23 Occupational Health and Safety Administration 57,770 0.5% 0.7% 24 Bureau of the Fiscal Service 98,073 0.9% 0.7% 25 Centers for Medicare and Medicaid Services 78,361 0.7% 0.7% 26 Military Entrance Processing Station 56,931 0.5% 0.6% 27 Environmental Protection Agency 43,232 0.4% 0.6% 28 Department of the Army 228,108 2.0% 0.6% 29 Department of Housing and Urban Development 82,497 0.7% 0.6% 30 Bureau of Prisons 51,138 0.4% 0.4% 31 General Services Administration 20,535 0.2% 0.4% 32 Food and Drug Administration 33,398 0.3% 0.3% 33 Department of Defense 31,030 0.3% 0.3% 34 Equal Employment Opportunity Commission 22,516 0.2% 0.2% 35 Small Business Administration 8,575 0.1% 0.1% 36 Department of Labor 6,459 0.1% 0.0% 37 U.S. Coast Guard 4,064 0.0% 0.0% Subtotal U.S. Government 6,651,250 57.8% 59.8%


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 LEASE EXPIR ATION SCHEDUL E 31 LEASE EXPIRATION SCHEDULE (dollars in thousands) As of September 30, 2017 (1) 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. (2) Leased square footage is pursuant to leases existing as of September 30, 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. (3) Annualized rental income is calculated using the annualized contractual base rents from our tenants pursuant to our lease agreements as of September 30, 2017, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. (4) 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 (1) Expiring square feet (2) % of Total of Total Income Expiring (3) Annualized Total of Total 2017 20 434,049 4.0% 4.0% $ 10,004 3.6% 3.6% 2018 37 704,708 6.4% 10.4% 22,913 8.3% 11.9% 2019 45 1,940,016 17.7% 28.1% 59,116 21.5% 33.4% 2020 39 1,447,413 13.2% 41.3% 40,155 14.6% 48.0% 2021 37 1,061,519 9.7% 51.0% 20,732 7.5% 55.5% 2022 31 940,554 8.6% 59.6% 22,505 8.2% 63.7% 2023 18 595,662 5.4% 65.0% 13,685 5.0% 68.7% 2024 16 993,635 9.1% 74.1% 22,696 8.2% 76.9% 2025 15 801,648 7.3% 81.4% 16,572 6.0% 82.9% 2026 and thereafter 32 2,027,097 (4) 18.6% 100.0% 47,042 17.1% 100.0% Total 290 10,946,301 100.0% $ 275,420 100.0% Weighted average remaining lease term (in years) 5.1 4.7


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 EXHIBIT 32 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, September 30, 2017 PROPERT Y DE TAI L 33 EXHIBIT APROPERTY DETAIL (sorted by location) As of September 30, 2017 (dollars in thousands) See notes on page 34. Weighted Average Year Annualized Built or No. of Primary Rentable Rental Undepreciated Depreciated Date Substantially Property Location Buildings Tenant Type Sq. Ft. % Leased Income (2) Carrying Value Carrying Value Acquired (2) Renovated (3) 1 131 Clayton Street Montgomery, AL 1 US Government 57,815 100.0% $ 1,564 $ 10,033 $ 8,611 6/22/2011 2007 2 4344 Carmichael Road Montgomery, AL 1 U.S. Government 49,370 100.0% 1,522 13,032 11,939 12/17/2013 2009 3 15451 North 28th Avenue Phoenix, AZ 1 State 66,743 100.0% 1,438 9,776 9,200 9/10/2014 2013 4 711 14th Avenue Safford, AZ 1 U.S. Government 36,139 94.4% 910 12,516 10,363 6/16/2010 1992 5 5045 East Butler Street Fresno, CA 1 U.S. Government 531,976 100.0% 8,384 68,452 45,337 8/29/2002 1971 6 10949 N. Mather Boulevard Rancho Cordova, CA 1 State 93,807 100.0% 2,609 17,586 15,924 10/30/2013 2012 7 11020 Sun Center Drive Rancho Cordova, CA 1 State 82,896 100.0% 1,980 10,537 10,361 12/20/2016 2016 8 801 K Street Sacramento, CA 1 State 337,811 91.2% 9,796 71,019 68,009 1/29/2016 2002 9 9800 Goethe Road Sacramento, CA 1 State 110,500 100.0% 2,595 14,742 12,230 12/23/2009 1993 10 9815 Goethe Road Sacramento, CA 1 State 87,863 100.0% 1,953 12,438 10,778 9/14/2011 1992 11 Capitol Place Sacramento, CA 1 State 163,840 88.1% 4,460 44,699 36,830 12/17/2009 1988 12 4181 Ruffin Road San Diego, CA 1 U.S. Government 145,734 97.9% 3,467 20,004 16,831 7/16/2010 1981 13 4560 Viewridge Road San Diego, CA 1 U.S. Government 93,177 100.0% 3,303 26,645 16,955 3/31/1997 1996 14 9174 Sky Park Centre San Diego, CA 1 U.S. Government 43,918 96.8% 1,181 8,867 6,323 6/24/2002 1986 15 603 San Juan Avenue Stockton, CA 1 U.S. Government 22,012 100.0% 971 6,033 5,326 7/20/2012 2012 16 16194 West 45th Street Golden, CO 1 U.S. Government 43,232 100.0% 1,584 7,141 3,874 3/31/1997 1997 17 12795 West Alameda Parkway Lakewood, CO 1 U.S. Government 166,745 100.0% 4,477 27,482 22,708 1/15/2010 1988 18 Corporate Center Lakewood, CO 3 U.S. Government 212,996 100.0% 4,569 34,322 22,970 10/11/2002 1996 19 20 Massachusetts Avenue Washington, DC 1 U.S. Government 340,119 100.0% 18,434 84,536 51,767 3/31/1997 1996 20 625 Indiana Avenue Washington, DC 1 U.S. Government 160,897 95.1% 7,834 58,401 52,317 8/17/2010 1989 21 7850 Southwest 6th Court Plantation, FL 1 U.S. Government 135,819 100.0% 4,878 35,775 30,752 5/12/2011 1999 22 8900 Grand Oak Circle Tampa, FL 1 U.S. Government 67,916 100.0% 1,983 13,042 10,948 10/15/2010 2008 23 181 Spring Street NW Atlanta, GA 1 U.S. Government 90,688 100.0% 3,717 25,871 23,279 7/25/2012 2007 24 Corporate Square Atlanta, GA 5 U.S. Government 352,876 (4) 100.0% 7,810 57,705 46,446 7/16/2004 1967 25 Executive Park Atlanta, GA 1 Non-Government 125,788 100.0% 1,622 17,218 12,253 7/16/2004 1972 26 One Georgia Center Atlanta, GA 1 State 375,952 91.3% 7,382 40,653 36,301 9/30/2011 2008 27 4712 Southpark Boulevard Ellenwood, GA 1 U.S. Government 352,064 100.0% 3,131 21,076 18,538 7/25/2012 2005 28 1185, 1249 & 1387 S. Vinnell Way Boise, ID 3 U.S. Government 180,952 100.0% 4,669 33,218 29,361 9/11/2012 1997 29 2020 S. Arlington Heights Arlington Heights, IL 1 U.S. Government 57,770 100.0% 1,987 15,598 12,698 12/29/2009 2002 30 Intech Park Indianapolis, IN 3 U.S. Government 433,924 91.5% 9,658 76,172 65,032 10/14/2011 2003 31 400 State Street Kansas City, KS 1 U.S. Government 170,817 92.6% 2,938 14,703 12,292 6/16/2010 1971 32 7125 Industrial Road Florence, KY 1 U.S. Government 167,939 100.0% 2,537 13,475 12,080 12/31/2012 2002 33 251 Causeway Street Boston, MA 1 State 132,876 100.0% 4,071 24,049 20,778 8/17/2010 1988 34 75 Pleasant Street Malden, MA 1 State 125,521 100.0% 4,964 32,278 26,508 5/24/2010 2008 35 25 Newport Avenue Quincy, MA 1 State 92,549 96.3% 2,022 12,977 11,386 2/16/2011 2009 36 One Montvale Avenue Stoneham, MA 1 U.S. Government 97,777 94.1% 2,495 14,669 12,455 6/16/2010 1987 37 4201 Patterson Avenue Baltimore, MD 1 State 84,674 100.0% 1,270 12,897 8,484 10/15/1998 1989 38 20400 Century Boulevard Germantown, MD 1 Vacant 80,550 0.0% — 13,459 8,238 3/31/1997 1995 39 3300 75th Avenue Landover, MD 1 U.S. Government 266,000 100.0% 5,276 41,280 34,250 2/26/2010 2004 40 1401 Rockville Pike Rockville, MD 1 Other Government 190,044 93.3% 4,631 48,852 32,126 2/2/1998 1986


 
Government Properties Income Trust Supplemental Operating and Financial Data, September 30, 2017 PROPERT Y DE TAI L (Continued ) 34 EXHIBIT APROPERTY DETAIL (sorted by location) (1) Annualized rental income is calculated using the annualized contractual base rents from our tenants pursuant to our lease agreements as of September 30, 2017, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. (2) 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. (3) Weighted based on rentable square feet. (4) Rentable square footage excludes an expansion being constructed prior to the commencement of the lease. As of September 30, 2017 (dollars in thousands) Weighted Average Year Annualized Built or No. of Primary Rentable Rental Undepreciated Depreciated Date Substantially Property Location Buildings Tenant Type Sq. Ft. % Leased Income (1) Carrying Value Carrying Value Acquired (2) Renovated (3) 41 2115 East Jefferson Street Rockville, MD 1 U.S. Government 128,645 84.6% $ 3,023 $ 14,819 $ 13,663 8/27/2013 2003 42 Rutherford Business Park Windsor Mill, MD 1 U.S. Government 80,398 100.0% 1,915 11,827 10,593 11/16/2012 2011 43 Meadows Business Park Woodlawn, MD 2 U.S. Government 182,561 83.8% 3,260 26,721 22,991 2/15/2011 1996 44 11411 E. Jefferson Avenue Detroit, MI 1 U.S. Government 55,966 100.0% 2,731 18,990 15,647 4/23/2010 2009 45 330 South Second Avenue Minneapolis, MN 1 Non-Government 193,594 84.7% 3,173 32,130 26,852 7/16/2010 2013 46 Rosedale Corporate Plaza Roseville, MN 1 State 61,426 100.0% 1,126 8,222 5,099 12/1/1999 1987 47 1300 Summit Street Kansas City, MO 1 U.S. Government 86,739 100.0% 2,357 15,105 13,569 9/27/2012 1998 48 4241-4300 NE 34th Street Kansas City, MO 1 U.S. Government 98,073 100.0% 1,906 11,276 7,453 3/31/1997 1995 49 1220 Echelon Parkway Jackson, MS 1 U.S. Government 109,819 100.0% 3,974 25,946 22,647 7/25/2012 2009 50 10-12 Celina Avenue Nashua, NH 1 U.S. Government 321,800 100.0% 2,433 17,504 14,639 8/31/2009 1997 51 50 West State Street Trenton, NJ 1 State 266,995 84.6% 6,516 45,652 38,963 12/30/2010 1989 52 435 Montano Boulevard Albuquerque, NM 1 Vacant 29,045 0.0% — 2,188 1,885 7/16/2010 1986 53 138 Delaware Avenue Buffalo, NY 1 U.S. Government 121,711 63.6% 1,592 28,315 17,440 3/31/1997 2013 54 Airline Corporate Center Colonie, NY 1 State 64,000 100.0% 1,066 7,222 6,382 6/22/2012 2004 55 5000 Corporate Court Holtsville, NY 1 U.S. Government 264,482 85.7% 5,982 26,653 23,621 8/31/2011 2000 56 305 East 46th Street New York, NY 1 Other Government 187,060 100.0% 10,290 107,780 97,023 5/27/2011 2008 57 4600 25th Avenue Salem, OR 1 State 233,358 97.8% 5,108 28,757 24,888 12/20/2011 2007 58 Synergy Business Park Columbia, SC 3 State 180,703 93.3% 2,192 17,378 13,789 5/10/2006; 9/17/2010 1984 59 One Memphis Place Memphis, TN 1 U.S. Government 204,694 75.1% 2,948 9,742 8,382 9/17/2010 1985 60 701 Clay Road Waco, TX 1 U.S. Government 138,608 100.0% 2,993 13,249 8,614 12/23/1997 1997 61 14660, 14672 & 14668 Lee Road Chantilly, VA 3 Government Contractor 409,478 98.5% 13,592 81,187 79,796 12/22/2016 2002 62 Enterchange at Meadowville Chester, VA 1 U.S. Government 228,108 100.0% 1,526 11,355 10,357 8/28/2013 2011 63 3920 Pender Drive Fairfax, VA 1 U.S. Government 83,130 100.0% 2,440 15,815 14,691 3/21/2014 2011 64 Pender Business Park Fairfax, VA 4 State 171,061 96.2% 4,011 24,108 21,938 11/4/2013 2000 65 7987 Ashton Avenue Manassas, VA 1 Other Government 69,374 100.0% 1,654 9,990 9,835 1/3/2017 1989 66 1759 & 1760 Business Center Drive Reston, VA 2 U.S. Government 406,388 100.0% 12,362 89,753 83,081 5/28/2014 1996 67 9960 Mayland Drive Richmond, VA 1 State 173,932 94.4% 3,338 20,124 18,696 5/20/2014 1994 68 Aquia Commerce Center Stafford, VA 2 U.S. Government 64,656 100.0% 1,826 10,285 9,037 6/22/2011 1998 69 65 Bowdoin Street S. Burlington, VT 1 U.S. Government 26,609 100.0% 1,118 9,236 7,634 4/9/2010 2009 70 840 North Broadway Everett, WA 2 State 111,908 100.0% 2,699 20,373 18,014 6/28/2012 1988 71 Stevens Center Richland, WA 2 U.S. Government 140,152 100.0% 2,825 23,439 14,423 3/31/1997 1995 72 11050 West Liberty Drive Milwaukee, WI 1 U.S. Government 29,297 100.0% 795 5,587 4,854 6/9/2011 2006 73 2029 Stonewall Jackson Drive Falling Waters, WV 1 U.S. Government 40,348 100.0% 786 5,074 2,990 3/31/1997 1993 74 5353 Yellowstone Road Cheyenne, WY 1 U.S. Government 122,647 100.0% 1,791 10,661 6,390 3/31/1997 1995 96 11,516,851 95.0% $ 275,420 $ 1,929,711 $ 1,598,642