Government Properties Income Trust Exhibit 99.2 Fourth Quarter 2016 Supplemental Operating and Financial Data All amounts in this report are unaudited.
TABLE OF CONTENTS CORPORATE INFORMATION PAGE Company Profile....................................................................................................................................................................................................................................... 4 Investor Information ................................................................................................................................................................................................................................. 5 Research Coverage ................................................................................................................................................................................................................................. 6 FINANCIALS Key Financial Data ................................................................................................................................................................................................................................... 8 Condensed Consolidated Balance Sheets............................................................................................................................................................................................... 9 Condensed Consolidated Statements of Income (Loss).......................................................................................................................................................................... 10 Condensed Consolidated Statements of Cash Flows.............................................................................................................................................................................. 12 Debt Summary ......................................................................................................................................................................................................................................... 14 TABLE OF CONTENTS TABLE Debt Maturity Schedule............................................................................................................................................................................................................................ 15 Leverage Ratios, Coverage Ratios and Public Debt Covenants.............................................................................................................................................................. 16 Capital Expenditures Summary................................................................................................................................................................................................................ 17 Property Acquisition and Disposition Information Since January 1, 2019 ................................................................................................................................................ 18 Investments in Unconsolidated Joint Ventures ........................................................................................................................................................................................ 19 Calculation and Reconciliation of Property NOI and Property Cash Basis NOI....................................................................................................................................... 20 Reconciliation and Calculation of Same Property NOI and Same Property Cash Basis NOI .................................................................................................................. 21 Calculation of EBITDA, EBITDAre and Adjusted EBITDAre .................................................................................................................................................................... 22 Calculation of FFO Available for Common Shareholders and Normalized FFO Available for Common Shareholders............................................................................ 24 Definitions of Certain Non-GAAP Financial Measures............................................................................................................................................................................. 26 PORTFOLIO INFORMATION Summary Same Property Results............................................................................................................................................................................................................ 28 Occupancy and Leasing Summary .......................................................................................................................................................................................................... 29 Tenant Diversity and Credit Characteristics ............................................................................................................................................................................................. 30 Tenants Representing 1% or More of Total Annualized Rental Income ................................................................................................................................................... 31 Lease Expiration Schedule ...................................................................................................................................................................................................................... 32 EXHIBITS A Pro Forma Summary Same Property Results.......................................................................................................................................................................................... 34 B Reconciliation and Calculation of Pro Forma Same Property NOI and Same Property Cash Basis NOI ................................................................................................ 35 C Pro Forma Capital Expenditures Summary.............................................................................................................................................................................................. 36 D Pro Forma Calculation of EBITDA, EBITDAre and Adjusted EBITDAre .................................................................................................................................................. 37 E Property Detail ......................................................................................................................................................................................................................................... 38 WARNING CONCERNING FORWARD-LOOKING STATEMENTS 43 Certain pro forma financial information is presented in the Exhibits to this supplemental operating and financial data report, as well as certain property information for Select Income REIT, or SIR, as if the merger of SIR with and into a wholly owned subsidiary of us that was completed on December 31, 2018 had occurred on January 1, 2018. Such pro forma financial information is not necessarily indicative of our expected financial position or results of operations for any future period. Differences could result from numerous factors, including future changes in our portfolio of investments, our capital structure, our property level operating expenses and revenues, including rents expected to be received on our existing leases or leases we may enter into, changes in interest rates and other reasons. Actual future results are likely to be different from amounts presented in the pro forma financial information and such differences could be significant. Office Properties Income Trust 2 Supplemental Operating and Financial Data, June 30, 2019
One Memphis Place, Memphis, TN Square Feet: 204,694 Primary Agency Occupant: U.S. Courts Office Properties Income Trust 3 Supplemental Operating and Financial Data, June 30,CORPORATE 2019 INFORMATION
COMPANY PROFILE The Company: Corporate Headquarters: Office Properties Income Trust, or OPI, we, our, or us, is a real estate investment trust, or REIT, focused on owning, operating Two Newton Place and leasing buildings primarily leased to single tenants and those with high credit quality characteristics, such as government 255 Washington Street, Suite 300 entities. The majority of our properties are office buildings. Office Properties Income Trust is a component of 58 market indices Newton, MA 02458-1634 and it comprises more than 1% of the following indices as of June 30, 2019: Russell 200 Equity REIT: Office Index (RGUSFSEO), (617) 219-1440 BI North America Office REIT Valuation Peers (BROFFRTV), Invesco KBW Premium Yield Equity REIT ETF INAV Index (KBWYIV), Stock Exchange Listing: Solactive US Small Cap High Dividend Index (SOSSMHD), Bloomberg Reit Office Property Index (BBREOFPY), Russell 2000 Nasdaq Real Estate Investment Trusts (Reit) Index (RGUSFSRI) and Solactive Global SuperDividend Index (SOLSDIV). COMPANY PROFILE COMPANY Effective after the close of trading on December 31, 2018, we completed our merger with Select Income REIT, or SIR, whereby Trading Symbols: SIR merged with and into a subsidiary of us, or the Merger, with us as the surviving entity and we changed our name to OPI. Common Shares: OPI Accordingly, the assets acquired and liabilities assumed from SIR in the Merger are included in our consolidated balance sheet Senior Unsecured Notes due 2046: OPINI beginning December 31, 2018; however, SIR's results of operations are excluded from our actual historical consolidated statements of income (loss) for all periods prior to and including December 31, 2018. Issuer Ratings: Moody’s: Baa3 Standard & Poor’s: BBB- Management: OPI is managed by The RMR Group LLC, or RMR 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. Key Data (As of and For the Quarter Ended June 30, 2019): RMR primarily provides management services to four publicly traded equity REITs and three real estate related operating businesses. In addition to managing OPI, RMR manages Hospitality Properties Trust, a REIT that owns hotels and travel centers, (dollars and sq. ft. in thousands) Industrial Logistics Properties Trust, a REIT that owns industrial and logistics properties, and Senior Housing Properties Trust, Total properties (1) 209 a REIT that primarily owns healthcare, senior living and medical office buildings. RMR also provides management services to Total sq. ft. (1) 29,309 Five Star Senior Living Inc., a publicly traded operator of senior living communities, Sonesta International Hotels Corporation, a Percent leased (1) 91.6% privately owned operator and franchisor of hotels and cruise ships, and TravelCenters of America LLC, a publicly traded operator and franchisor of travel centers along the U.S. Interstate Highway System and restaurants. RMR also advises the RMR Real Q2 2019 total rental income $176,032 Estate Income Fund, a publicly traded closed end fund that invests in publicly traded securities of real estate companies, and Q2 2019 net loss available for Tremont Mortgage Trust, a publicly traded mortgage REIT, that focuses on originating and investing in floating rate first mortgage common shareholders $ (64,774) whole loans, secured by middle market and transitional commercial real estate, through wholly owned Securities and Exchange Q2 2019 Normalized FFO available Commission, or SEC, registered investment advisory subsidiaries, as well as manages the RMR Office Property Fund, a private, for common shareholders (2) $79,250 open end core plus fund focused on the acquisition, ownership and leasing of a diverse portfolio of multi-tenant office properties (1) Excludes three properties owned by unconsolidated throughout the U.S. As of June 30, 2019, RMR had $30.6 billion of real estate assets under management and the combined joint ventures and includes nine properties classified as RMR managed companies had approximately $12 billion of annual revenues, over 1,500 properties and approximately 50,000 held for sale. employees. We believe that being managed by RMR is a competitive advantage for OPI because of RMR’s depth of management (2) See page 24 for the calculation of Normalized FFO and experience in the real estate industry. We also believe RMR provides management services to us at costs that are lower available for common shareholders and a reconciliation of net income (loss) available for common shareholders than we would have to pay for similar quality services. determined in accordance with U.S. Generally Accepted Accounting Principles, or GAAP, to this amount. Office Properties Income Trust 4 Supplemental Operating and Financial Data, June 30, 2019
INVESTOR INFORMATION Board of Trustees Donna D. Fraiche Barbara D. Gilmore John L. Harrington Independent Trustee Independent Trustee Independent Trustee William A. Lamkin Elena B. Poptodorova Jeffrey P. Somers Independent Trustee Lead Independent Trustee Independent Trustee David M. Blackman Adam D. Portnoy INVESTOR INFORMATION INVESTOR Managing Trustee Chair of the Board & Managing Trustee Senior Management David M. Blackman Matthew C. Brown Christopher J. Bilotto President and Chief Executive Officer Chief Financial Officer and Treasurer Vice President Contact Information Investor Relations Inquiries Office Properties Income Trust Financial inquiries should be directed to Matthew C. Brown, Two Newton Place Chief Financial Officer and Treasurer, 255 Washington Street, Suite 300 at (617) 219-1440 Newton, MA 02458-1634 or mbrown@opireit.com (617) 219-1410 info@opireit.com Investor and media inquiries should be directed to www.opireit.com Olivia Snyder, Manager, Investor Relations, at (617) 219-1410 or osnyder@opireit.com Office Properties Income Trust 5 Supplemental Operating and Financial Data, June 30, 2019
RESEARCH COVERAGE Equity Research Coverage B. Riley FBR Bank of America / Merrill Lynch Bryan Maher James Feldman bmaher@brileyfbr.com James.Feldman@baml.com (646) 885-5423 (646) 855-5808 JMP Securities Morgan Stanley Mitch Germain Vikram Malhotra RESEARCH COVERAGE mgermain@jmpsecurities.com vikram.malhotra@morganstanley.com (212) 906-3546 (212) 761-7064 RBC Capital Markets Michael Carroll Michael.Carroll@rbccm.com (440) 715-2649 Rating Agencies Moody’s Investors Service Standard & Poor’s Lori Marks Michael Souers Lori.marks@moodys.com michael.souers@spglobal.com (212) 553-0376 (212) 438-2508 OPI 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 OPI’s performance made by these analysts or agencies do not represent opinions, forecasts or predictions of OPI or its management. OPI 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. Office Properties Income Trust 6 Supplemental Operating and Financial Data, June 30, 2019
625 Indiana Avenue, Washington, DC 9960Square Maryland Feet: Drive, 160,897 Richmond, VA SquarePrimary Feet: Agency 173,932 Occupant: U.S. Courts Agency Occupant: The Commonwealth of Virginia Office Properties Income Trust 7 Supplemental Operating and Financial Data, June 30, 2019 FINANCIALS 7
KEY FINANCIAL DATA (dollars in thousands, except per share data) As of and for the Three Months Ended 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 Selected Balance Sheet Data: Total gross assets (1) $ 5,198,382 $ 5,313,886 $ 5,613,730 $ 3,847,915 $ 3,866,055 Total assets $ 4,804,322 $ 4,927,198 $ 5,238,583 $ 3,484,425 $ 3,507,769 Total liabilities $ 3,107,836 $ 3,140,194 $ 3,459,615 $ 2,245,064 $ 2,226,119 Total shareholders' equity $ 1,696,486 $ 1,787,004 $ 1,778,968 $ 1,239,361 $ 1,281,650 KEY FINANCIAL DATA FINANCIAL KEY Selected Income Statement Data: Rental income $ 176,032 $ 174,777 $ 103,656 $ 106,102 $ 108,085 Net income (loss) available for common shareholders $ (64,774) $ 34,019 $ (57,695) $ (449) $ 29,602 Property NOI (2) $ 120,723 $ 116,868 $ 62,026 $ 64,462 $ 68,103 Adjusted EBITDAre (3) $ 114,897 $ 111,162 $ 57,901 $ 73,573 $ 76,686 FFO available for common shareholders (4) $ 79,081 $ 72,275 $ 26,340 $ 36,367 $ 54,605 Normalized FFO available for common shareholders (4) $ 79,250 $ 73,273 $ 39,101 $ 52,967 $ 51,325 Per Common Share Data: Net income (loss) available for common shareholders (basic and diluted) $ (1.35) $ 0.71 $ (2.31) $ (0.02) $ 1.20 FFO available for common shareholders (basic) (4) $ 1.65 $ 1.50 $ 1.05 $ 1.47 $ 2.21 FFO available for common shareholders (diluted) (4) $ 1.65 $ 1.50 $ 1.05 $ 1.47 $ 2.20 Normalized FFO available for common shareholders (basic and diluted) (4) $ 1.65 $ 1.53 $ 1.56 $ 2.14 $ 2.07 Dividends: Annualized dividends paid per share during period $ 2.20 $ 2.20 $ 6.88 $ 6.88 $ 6.88 Annualized dividend yield (at end of period) (5) 8.4% 8.0% 25.0% 15.2% 10.9% Normalized FFO available for common shareholders payout ratio (4) 33.3% 35.9% 110.3% 81.1% 82.7% (1) Total gross assets is total assets plus accumulated depreciation. (2) See page 20 for the calculation of 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 EBITDAre and a reconciliation of net income (loss) determined in accordance with GAAP to that amount. (4) See page 24 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 dividend yield is the annualized dividend paid during the period divided by the closing price of our common shares at the end of the period. Office Properties Income Trust 8 Supplemental Operating and Financial Data, June 30, 2019
CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) June 30, December 31, 2019 2018 ASSETS Real estate properties: Land $ 875,019 $ 924,164 Buildings and improvements 2,941,375 3,020,472 Total real estate properties, gross 3,816,394 3,944,636 Accumulated depreciation (394,060) (375,147) Total real estate properties, net 3,422,334 3,569,489 Assets of properties held for sale 126,014 253,501 Investments in unconsolidated joint ventures 41,634 43,665 Acquired real estate leases, net 924,594 1,056,558 Cash and cash equivalents 21,102 35,349 Restricted cash 3,583 3,594 Rents receivable, net 70,639 72,051 Deferred leasing costs, net 34,697 25,672 Other assets, net 159,725 178,704 Total assets $ 4,804,322 $ 5,238,583 LIABILITIES AND SHAREHOLDERS’ EQUITY Unsecured revolving credit facility $ 65,000 $ 175,000 Unsecured term loans, net 169,827 387,152 Senior unsecured notes, net 2,362,629 2,357,497 Mortgage notes payable, net 325,293 335,241 Liabilities of properties held for sale 1,953 4,271 Accounts payable and other liabilities 159,055 145,536 Due to related persons 6,593 34,887 Assumed real estate lease obligations, net 17,486 20,031 Total liabilities 3,107,836 3,459,615 CONDENSED CONSOLIDATED BALANCE SHEETS CONDENSED CONSOLIDATED Commitments and contingencies Shareholders’ equity: Common shares of beneficial interest, $.01 par value: 200,000,000 shares authorized, 48,113,444 and 48,082,903 shares issued and outstanding, respectively 481 481 Additional paid in capital 2,611,570 2,609,801 Cumulative net income 116,127 146,882 Cumulative other comprehensive income (loss) (495) 106 Cumulative common distributions (1,031,197) (978,302) Total shareholders’ equity 1,696,486 1,778,968 Total liabilities and shareholders’ equity $ 4,804,322 $ 5,238,583 Office Properties Income Trust 9 Supplemental Operating and Financial Data, June 30, 2019
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (amounts in thousands, except per share data and percentages) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Rental income $ 176,032 $ 108,085 $ 350,809 $ 216,802 Expenses: Real estate taxes 18,147 12,365 36,539 25,330 Utility expenses 7,470 6,018 16,851 12,707 Other operating expenses 29,692 21,599 59,828 44,436 Depreciation and amortization 73,913 42,671 151,434 86,875 Loss on impairment of real estate (1) 2,380 (316) 5,584 5,800 Acquisition and transaction related costs (2) 98 — 682 — General and administrative (3) 8,744 4,449 17,467 14,055 Total expenses 140,444 86,786 288,385 189,203 Gain (loss) on sale of real estate (4) (17) 17,329 22,075 17,329 Dividend income 980 304 1,960 608 Unrealized gain (loss) on equity securities (5) (66,135) 10,321 (44,007) 23,252 Interest income 241 149 489 265 Interest expense (including amortization of debt premiums, discounts and issuance costs of $2,863, $892, $5,704 and $1,856, respectively) (35,348) (23,304) (72,481) (46,070) Loss on early extinguishment of debt (71) — (485) — Income (loss) from continuing operations before income tax benefit (expense) and equity in net losses of investees (64,762) 26,098 (30,025) 22,983 Income tax benefit (expense) 130 (83) (353) (115) Equity in net losses of investees (142) (629) (377) (1,206) Income (loss) from continuing operations (64,774) 25,386 (30,755) 21,662 Income from discontinued operations (6) — 4,309 — 14,598 Net income (loss) (64,774) 29,695 (30,755) 36,260 Preferred units of limited partnership distributions — (93) — (371) Net income (loss) available for common shareholders $ (64,774) $ 29,602 $ (30,755) $ 35,889 Weighted average common shares outstanding (basic) 48,049 24,763 48,040 24,762 Weighted average common shares outstanding (diluted) 48,049 24,766 48,040 24,763 Per common share amounts (basic and diluted): Income (loss) from continuing operations $ (1.35) $ 1.02 $ (0.64) $ 0.86 Income from discontinued operations $ — $ 0.17 $ — $ 0.59 Net income (loss) available for common shareholders $ (1.35) $ 1.20 $ (0.64) $ 1.45 Additional Data: General and administrative expenses / total assets (at end of period) (3) 0.18% 0.13% 0.36% 0.40% Non-cash straight line rent adjustments included in rental income (7) $ 5,667 $ 2,744 $ 12,461 $ 5,835 (7) CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) STATEMENTS CONDENSED CONSOLIDATED Lease value amortization included in rental income $ (1,446) $ (753) $ (2,593) $ (1,588) Lease termination fees included in rental income (7) $ 8,867 $ — $ 9,161 $ — Non-cash amortization included in other operating expenses (8) $ 121 $ 121 $ 242 $ 242 Non-cash amortization included in general and administrative expenses (8) $ 151 $ 151 $ 302 $ 302 Office Properties Income Trust See accompanying notes on the following page. 10 Supplemental Operating and Financial Data, June 30, 2019
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (CONTINUED) (dollars in thousands) (1) We recorded an adjustment of $2,380 to reduce the carrying value of one property to its estimated fair value less costs to sell during the three months ended June 30, 2019. We recorded an adjustment of $2,757 to reduce the carrying value of one property to its estimated fair value less costs to sell and a $447 loss on impairment of real estate related to the disposal of a property portfolio consisting of 34 properties located in Northern Virginia and Maryland during the three months ended March 31, 2019. We recorded an adjustment of $322 to increase the carrying value of one property removed from held for sale status to its estimated fair value and an adjustment of $6 to reduce the carrying value of one property to its estimated fair value less costs to sell during the three months ended June 30, 2018. We recorded a $6,116 loss on impairment of real estate during the three months ended March 31, 2018 to reduce the carrying value of three properties to their estimated fair value less costs to sell. (2) Acquisition and transaction related costs for the three and six months ended June 30, 2019 consist of costs incurred in connection with the Merger. (3) Incentive fees under our business management agreement with The RMR Group LLC, are payable after the end of each calendar year, are calculated based on common share total return, as defined, and are included in general and administrative expenses in our condensed consolidated statements of income (loss). 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 Normalized FFO until the fourth quarter, when the amount of the business management incentive fee expense for the calendar year, if any, is determined. No estimated business management incentive fees were included in net income (loss) for the three and six months ended June 30, 2019. Net income for the three and six months ended June 30, 2018 includes the reversal of $2,150 previously accrued business management incentive fee expense and $737 of estimated business management incentive fee expense, respectively. (4) We recorded a $22,075 gain on the sale of one property during the six months ended June 30, 2019. We recorded a $17,329 gain on the sale of one property during the three months ended June 30, 2018. (5) Unrealized gain (loss) on equity securities represents the adjustment required to adjust the carrying value of our investment in The RMR Group Inc., or RMR Inc., common stock to its fair value as of the end of each period presented. On July 1, 2019, we sold our entire investment in shares of class A common stock of RMR Inc., or RMR Inc. common stock. (6) Income from discontinued operations includes operating results related to our former equity method investment in SIR that we sold in October 2018. (7) We report rental income on a straight line basis over the terms of the respective leases; as a result, 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 and lease termination fees, if any. (8) 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 fee expense and property management fee expense, which are included in general and administrative and other operating expenses, respectively. Office Properties Income Trust 11 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (CONTINUED) STATEMENTS CONDENSED CONSOLIDATED Supplemental Operating and Financial Data, June 30, 2019
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) For the Six Months Ended June 30, 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (30,755) $ 36,260 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 46,091 34,037 Amortization of debt premiums, discounts and issuance costs 5,704 1,856 Amortization of acquired real estate leases 105,460 52,238 Amortization of deferred leasing costs 2,771 2,288 Gain on sale of real estate (22,075) (17,329) Loss on impairment of real estate 5,584 5,800 Loss on early extinguishment of debt 485 — Straight line rental income (12,461) (5,835) Other non-cash (income) expenses, net 1,288 (2) Unrealized (gain) loss on equity securities 44,007 (23,252) Equity in net losses of investees 377 1,206 Equity in earnings of Select Income REIT included in discontinued operations — (14,590) Net gain on issuance of shares by Select Income REIT included in discontinued operations — (8) Distributions of earnings from Select Income REIT — 14,590 Change in assets and liabilities: Rents receivable 15,886 4,870 Deferred leasing costs (15,208) (4,141) Other assets 6,104 4,870 Accounts payable and other liabilities (16,858) (1,631) Due to related persons (28,610) 2,270 Net cash provided by operating activities 107,790 93,497 CASH FLOWS FROM INVESTING ACTIVITIES: Real estate improvements (21,126) (21,324) Distributions in excess of earnings from Select Income REIT — 10,827 Distributions in excess of earnings from unconsolidated joint ventures 1,121 2,233 Proceeds from sale of properties, net 288,885 142,189 Net cash provided by investing activities 268,880 133,925 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS STATEMENTS CONDENSED CONSOLIDATED Office Properties Income Trust 12 Supplemental Operating and Financial Data, June 30, 2019
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (dollars in thousands) For the Six Months Ended June 30, 2019 2018 CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of mortgage notes payable (9,970) (1,808) Repayment of unsecured term loans (218,000) — Borrowings on unsecured revolving credit facility 85,000 70,000 Repayments on unsecured revolving credit facility (195,000) (188,000) Repurchase of common shares (63) (18) Redemption of preferred units of limited partnership — (20,221) Preferred units of limited partnership distributions — (646) Distributions to common shareholders (52,895) (85,266) Net cash used in financing activities (390,928) (225,959) Increase (decrease) in cash, cash equivalents and restricted cash (14,258) 1,463 Cash, cash equivalents and restricted cash at beginning of period 38,943 19,680 Cash, cash equivalents and restricted cash at end of period $ 24,685 $ 21,143 SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid $ 68,640 $ 43,958 Income taxes paid $ 457 $ 38 SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH: The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows: As of June 30, 2019 2018 Cash and cash equivalents $ 21,102 $ 18,695 Restricted cash 3,583 2,448 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 24,685 $ 21,143 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) STATEMENTS CONDENSED CONSOLIDATED Office Properties Income Trust 13 Supplemental Operating and Financial Data, June 30, 2019
DEBT SUMMARY (1) As of June 30, 2019 (dollars in thousands) 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) (6) 3.472% 3.472% $ 65,000 1/31/2023 $ 65,000 3.6 DEBT SUMMARY $300,000 unsecured term loan (6) (7) 3.802% 3.802% 170,000 3/31/2020 170,000 0.8 Subtotal / weighted average 3.711% 3.711% 235,000 235,000 1.6 Unsecured Fixed Rate Debt: Senior unsecured notes due 2019 (8) 3.750% 3.930% 350,000 8/15/2019 350,000 0.1 Senior unsecured notes due 2020 3.600% 3.608% 400,000 2/1/2020 400,000 0.6 Senior unsecured notes due 2022 4.150% 4.196% 300,000 2/1/2022 300,000 2.6 Senior unsecured notes due 2022 4.000% 4.000% 300,000 7/15/2022 300,000 3.0 Senior unsecured notes due 2024 4.250% 4.404% 350,000 5/15/2024 350,000 4.9 Senior unsecured notes due 2025 4.500% 4.770% 400,000 2/1/2025 400,000 5.6 Senior unsecured notes due 2046 5.875% 5.875% 310,000 5/1/2046 310,000 26.9 Subtotal / weighted average 4.276% 4.377% 2,410,000 2,410,000 5.9 Secured Fixed Rate Debt: Mortgage debt - One property in Washington, DC 5.720% 3.690% 33,301 7/1/2020 32,462 1.0 Mortgage debt - One property in Philadelphia, PA 4.400% 4.220% 40,418 8/3/2020 39,635 1.1 Mortgage debt - One property in Lakewood, CO 8.150% 6.150% 2,310 3/1/2021 118 1.7 Mortgage debt - One property in Fairfax, VA 5.877% 5.877% 13,303 8/11/2021 12,702 2.1 Mortgage debt - One property in Washington, DC 4.220% 4.190% 26,870 7/1/2022 24,668 3.0 Mortgage debt - Three properties in Seattle, WA 3.550% 4.210% 71,000 5/1/2023 71,000 3.8 Mortgage debt - One property in Chicago, IL 3.700% 4.210% 50,000 6/1/2023 50,000 3.9 Mortgage debt - One property in Washington, DC 4.800% 4.190% 24,311 6/1/2023 22,584 3.9 Mortgage debt - One property in Washington, DC 4.050% 4.440% 66,780 9/1/2030 60,566 11.2 Subtotal / weighted average 4.238% 4.283% 328,293 313,735 4.6 Total / weighted average 4.228% 4.314% $ 2,973,293 $ 2,958,735 5.4 See accompanying notes on the following page. Office Properties Income Trust 14 Supplemental Operating and Financial Data, June 30, 2019
DEBT MATURITY SCHEDULE (1) As of June 30, 2019 (dollars in thousands) Unsecured Unsecured Secured Fixed Year Floating Rate Debt Fixed Rate Debt Rate Debt Total Principal Balance (4) 2019 $ — $ 350,000 (8) $ 2,084 $ 352,084 2020 170,000 (9) 400,000 75,707 645,707 2021 — — 14,420 14,420 2022 — 600,000 25,518 625,518 2023 65,000 (10) — 143,784 208,784 2024 — 350,000 — 350,000 2025 — 400,000 287 400,287 2026 and thereafter — 310,000 66,493 376,493 DEBT MATURITY SCHEDULE DEBT MATURITY Total $ 235,000 $ 2,410,000 $ 328,293 $ 2,973,293 Percent of total principal balance 7.9% 81.1% 11.0% 100.0% (1) Excludes two mortgage notes with an aggregate principal balance of $82,000 which are secured by three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 for additional information regarding these joint ventures and related mortgage notes. (2) Reflects the interest rate stated in, or determined pursuant to, the contract terms. (3) Includes the effect of mark to market accounting for certain mortgages and premiums or discounts on senior unsecured notes. Excludes the effect of debt issuance costs amortization. (4) Principal balances exclude unamortized premiums, discounts and issuance costs related to these debts. The carrying value of our total debt of $2,922,749 as of June 30, 2019 is net of unamortized premiums, discounts and certain issuance costs totaling $50,544. (5) We are required to pay interest on borrowings under our revolving credit facility at a rate of LIBOR plus a premium of 110 basis points per annum. We also pay a facility fee of 25 basis points per annum on the total amount of lending commitments under our revolving credit facility. Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings. The interest rate listed above is as of June 30, 2019 and excludes the 25 basis point facility fee. Subject to the payment of an extension fee and meeting certain other conditions, we may extend the maturity date of our revolving credit facility for two additional six month periods. (6) The maximum aggregate borrowing availability under the credit agreement governing our revolving credit facility and term loan may be increased to up to $2,015,000 on a combined basis in certain circumstances. (7) We are required to pay interest on the amounts outstanding under our term loan due March 31, 2020 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 are as of June 30, 2019. This term loan is prepayable without penalty at any time. During the six months ended June 30, 2019, we repaid $130,000 of the principal balance of this term loan, which reduced the principal amount outstanding to $170,000. In July 2019, we repaid an additional $105,000 of the principal balance of this term loan with the net proceeds of our sale of 2,801,060 shares of RMR Inc. common stock. (8) In July 2019, we redeemed, at par plus accrued interest, our $350,000 senior unsecured notes that had a maturity date in August 2019. We used cash on hand and borrowings under our revolving credit facility to make this prepayment. (9) Represents the outstanding balance of our term loan at June 30, 2019. (10) Represents the amount outstanding under our revolving credit facility at June 30, 2019. Office Properties Income Trust 15 Supplemental Operating and Financial Data, June 30, 2019
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS As of and for the Three Months Ended 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 Leverage Ratios: Net debt (1) / total gross assets (2) 56.8% 57.1% 58.4% 55.8% 55.0% Net debt (1) / gross book value of real estate assets (3) 57.0% 57.2% 60.8% 69.6% 61.9% Net debt (1) / total market capitalization (4) 69.7% 69.2% 70.7% 65.5% 57.2% Secured debt (1) / total assets 6.8% 6.7% 6.5% 5.2% 5.2% Variable rate debt (1) / net debt (1) 8.0% 10.4% 17.2% 47.4% 47.2% Coverage Ratios: Adjusted EBITDAre (5) / interest expense 3.3x 3.0x 2.8x 3.1x 3.3x Net debt (1) / annualized Adjusted EBITDAre (5) 6.8x 6.8x nm (6) 7.3x 6.9x Public Debt Covenants: Total debt (1) / adjusted total assets (7) (maximum 60.0%) 54.1% 54.9% 56.8% 52.1% 51.9% Secured debt (1) / adjusted total assets (7) (maximum 40.0%) 6.0% 5.9% 5.8% 4.4% 4.4% Consolidated income available for debt service (8) / debt service (minimum 1.50x) 3.5x 3.2x 3.2x 2.3x 3.4x Total unencumbered assets (7) / unsecured debt (1) (minimum 150.0%) 181.2% 178.5% 171.9% 184.0% 184.9% (1) Debt amounts represent the outstanding principal balance as of the date reported. Net debt is total debt less cash. Total debt excludes two mortgage notes with an aggregate principal balance of $82,000 which are secured by three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 for more information regarding these joint ventures and related mortgage notes. (2) Total gross assets is total assets plus accumulated depreciation. (3) Gross book value of real estate assets is real estate properties at cost, plus certain acquisition costs, if any, before depreciation and purchase price allocations, less impairment writedowns, if any. (4) Total market capitalization is total debt plus the market value of our common shares at the end of each period. (5) See page 22 for the calculation of Adjusted EBITDAre and a reconciliation of net income (loss) determined in accordance with GAAP to that amount. (6) For the three months ended December 31, 2018, net debt includes SIR's debt less SIR's cash assumed in the Merger; however, annualized Adjusted EBITDAre excludes SIR's results of operations for the three month period. On a pro forma basis as if the Merger had occurred on October 1, 2018, net debt (total debt less cash) / annualized Adjusted EBITDAre would have been 7.5x. See Exhibit D on page 37 for pro forma calculations of EBITDAre and Adjusted EBITDAre as if the Merger occurred on October 1, 2018. (7) Adjusted total assets and total unencumbered assets include original cost of real estate assets calculated in accordance with GAAP before impairment writedowns, if any, and the lower of cost or market of our former investment in SIR for the applicable periods, and exclude depreciation and amortization, accounts receivable and intangible assets. (8) 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, unrealized gains or losses on equity securities, gains and losses on early extinguishment of debt, gains and losses on sales of properties and gains or losses on equity issuance by SIR and equity in earnings of SIR and including distributions received from SIR and our unconsolidated joint ventures, if any, determined together with debt service for the period presented. Office Properties Income Trust LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS COVERAGE RATIOS LEVERAGE RATIOS, 16 Supplemental Operating and Financial Data, June 30, 2019
CAPITAL EXPENDITURES SUMMARY (dollars and sq. ft. in thousands, except per sq. ft. data) For the Three Months Ended (1)(2) 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 Tenant improvements (3) $ 7,123 $ 4,912 $ 5,450 $ 2,293 $ 3,854 Leasing costs (4) 6,760 7,325 5,635 1,831 1,626 Building improvements (5) 7,317 4,308 11,250 6,707 4,048 Recurring capital expenditures 21,200 16,545 22,335 10,831 9,528 Development, redevelopment and other activities (6) 959 226 1,148 664 734 Total capital expenditures $ 22,159 $ 16,771 $ 23,483 $ 11,495 $ 10,262 Average sq. ft. during period (7) 29,722 31,017 16,204 17,046 17,189 Building improvements per average sq. ft. during period $ 0.25 $ 0.14 $ 0.69 $ 0.39 $ 0.24 (1) Historical data prior to the three months ended March 31, 2019 does not include capital expenditures activity of the SIR properties acquired in the Merger. See Exhibit C on CAPITAL EXPENDITURES SUMMARY CAPITAL page 36 for a summary of capital expenditures activity of the SIR properties prior to the Merger as well as a pro forma combined capital expenditures summary. (2) Excludes capital expenditures related to three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 for more information regarding these joint ventures. (3) Tenant improvements include capital expenditures used to improve tenants' space or amounts paid directly to tenants to improve their space. (4) Leasing costs include leasing related costs, such as brokerage commissions and tenant inducements. (5) Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets. (6) 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 or (ii) capital expenditure projects that reposition a property or result in new sources of revenue. (7) Rentable square footage is subject to changes when space is remeasured or reconfigured for tenants. Average square footage for the three months ended December 31, 2018 excludes square feet from properties acquired from SIR on December 31, 2018. Office Properties Income Trust 17 Supplemental Operating and Financial Data, June 30, 2019
PROPERTY ACQUISITIONS AND DISPOSITIONS INFORMATION SINCE JANUARY 1, 2019 (dollars and sq. ft. in thousands) ACQUISITIONS: We have not acquired any properties since January 1, 2019. DISPOSITIONS: Date Number of Gross Sold Location Properties Sq. Ft. Sales Price (1) 2/8/2019 Northern Virginia and Maryland 34 1,636 $ 198,500 3/18/2019 Washington, D.C. 1 129 70,000 5/29/2019 Buffalo, NY 1 122 16,900 5/31/2019 Maynard, MA 1 287 5,000 6/19/2019 Kapolei, HI 1 417 7,100 7/12/2019 San Jose, CA 1 72 14,000 7/30/2019 Nashua, NH 1 322 25,000 Total 40 2,985 $ 336,500 (1) Gross sales price includes purchase price adjustments, if any, and excludes closing costs. Office Properties Income Trust 18 PROPERTY ACQUISITIONS AND DISPOSITIONS INFORMATION SINCE JANUARY 1, 2019 SINCE JANUARY AND DISPOSITIONS INFORMATION ACQUISITIONS PROPERTY Supplemental Operating and Financial Data, June 30, 2019
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES (dollars in thousands) Unconsolidated Joint Ventures: OPI OPI Investment at Number of Square Occupancy at Weighted Average Joint Venture Ownership June 30, 2019 Properties Location Feet June 30, 2019 Lease Term (1) Prosperity Metro Plaza 51% $ 23,274 2 Fairfax, VA 328,456 82.5% 3.9 years 1750 H Street, NW 50% 18,360 1 Washington, D.C. 115,411 100.0% 1.8 years Total / Weighted Average $ 41,634 3 443,867 87.1% 3.0 years Outstanding Unconsolidated Debt: Principal OPI Share of OPI Interest Maturity Balance at Annualized Balance at Principal Balance (4) Joint Venture Ownership Rate (2) Date June 30, 2019 (3) Debt Service Maturity (3) at June 30, 2019 Prosperity Metro Plaza (5) 51% 4.090% 12/1/2029 $ 50,000 $ 2,045 $ 45,246 $ 25,500 1750 H Street, NW 50% 3.690% 8/1/2024 32,000 1,181 32,000 16,000 Total / Weighted Average 3.934% $ 82,000 $ 3,226 $ 77,246 $ 41,500 Results of Operations - Unconsolidated Joint Ventures: (6) For the Three Months Ended June 30, 2019 For the Six Months Ended June 30, 2019 Prosperity 1750 H Prosperity 1750 H Metro Plaza Street, NW Total Metro Plaza Street, NW Total Equity in losses of affiliates $ (20) $ (252) $ (272) $ (387) $ (524) $ (911) Depreciation and amortization 750 660 1,410 1,841 1,320 3,161 Other expenses, net (7) 241 198 439 486 361 847 NOI (8) 971 606 1,577 1,940 1,157 3,097 Lease value amortization included in rental income (9) (13) 34 21 (26) 68 42 Non-cash straight line rent adjustments included in rental income (9) 4 (5) (1) 7 (13) (6) Cash Basis NOI (8) $ 962 $ 635 $ 1,597 $ 1,921 $ 1,212 $ 3,133 Distributions received by OPI $ 204 $ 396 $ 600 $ 306 $ 815 $ 1,121 (1) Lease term is weighted based on annualized rental income. Annualized rental income is calculated using the annualized contractual base rents from the unconsolidated joint ventures' tenants pursuant to the lease agreements as of June 30, 2019, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to the joint ventures, and excluding lease value amortization. (2) Includes the effect of interest rate protection and mark to market accounting. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES INVESTMENTS IN UNCONSOLIDATED (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 applicable 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 and six months ended June 30, 2019 based on our ownership percentage of the respective joint ventures. (7) Includes interest expense, net of other income. (8) See Definitions of Certain Non-GAAP Financial Measures on page 26 for the definitions of NOI and Cash Basis NOI. We calculate NOI and Cash Basis NOI for our unconsolidated joint ventures in the same manner that we calculate Property NOI and Property Cash Basis NOI. (9) Our unconsolidated joint ventures 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 the unconsolidated joint ventures by our tenants, as well as the net effect of non- cash amortization of intangible lease assets and liabilities. Office Properties Income Trust 19 Supplemental Operating and Financial Data, June 30, 2019
CALCULATION AND RECONCILIATION OF PROPERTY NOI AND PROPERTY CASH BASIS NOI (1) (dollars in thousands) For the Three Months Ended For the Six Months Ended 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 6/30/2019 6/30/2018 Calculation of Property NOI and Property Cash Basis NOI: Rental income (2) $ 176,032 $ 174,777 $ 103,656 $ 106,102 $ 108,085 $ 350,809 $ 216,802 Property operating expenses (55,309) (57,909) (41,630) (41,640) (39,982) (113,218) (82,473) Property NOI 120,723 116,868 62,026 64,462 68,103 237,591 134,329 Non-cash straight line rent adjustments included in rental income (2) (5,667) (6,794) (2,339) (1,990) (2,744) (12,461) (5,835) Lease value amortization included in rental income (2) 1,446 1,147 542 773 753 2,593 1,588 Lease termination fees included in rental income (2) (8,867) (294) (58) (122) — (9,161) — Non-cash amortization included in property operating expenses (3) (121) (121) (121) (121) (121) (242) (242) Property Cash Basis NOI $ 107,514 $ 110,806 $ 60,050 $ 63,002 $ 65,991 $ 218,320 $ 129,840 Reconciliation of Net Income (Loss) Available for Common Shareholders to Property NOI and Property Cash Basis NOI: Net income (loss) available for common shareholders $ (64,774) $ 34,019 $ (57,695) $ (449) $ 29,602 $ (30,755) $ 35,889 Preferred units of limited partnership distributions — — — — 93 — 371 Net income (loss) (64,774) 34,019 (57,695) (449) 29,695 (30,755) 36,260 (Income) loss from discontinued operations — — 18,150 (9,274) (4,309) — (14,598) Income (loss) from continuing operations (64,774) 34,019 (39,545) (9,723) 25,386 (30,755) 21,662 Equity in net (earnings) losses of investees 142 235 1,157 (94) 629 377 1,206 Income tax (benefit) expense (130) 483 (7) 9 83 353 115 Loss on early extinguishment of debt 71 414 709 — — 485 — Interest expense 35,348 37,133 20,421 23,374 23,304 72,481 46,070 Interest income (241) (248) (234) (140) (149) (489) (265) Unrealized (gain) loss on equity securities 66,135 (22,128) 48,229 (17,425) (10,321) 44,007 (23,252) Dividend income (980) (980) (425) (304) (304) (1,960) (608) (Gain) loss on sale of real estate 17 (22,092) (3,332) — (17,329) (22,075) (17,329) General and administrative 8,744 8,723 (11,516) 22,383 4,449 17,467 14,055 Acquisition and transaction related costs 98 584 10,695 3,813 — 682 — Loss on impairment of real estate 2,380 3,204 2,830 — (316) 5,584 5,800 Depreciation and amortization 73,913 77,521 33,044 42,569 42,671 151,434 86,875 Property NOI 120,723 116,868 62,026 64,462 68,103 237,591 134,329 Non-cash amortization included in property operating expenses (3) (121) (121) (121) (121) (121) (242) (242) Lease termination fees included in rental income (2) (8,867) (294) (58) (122) — (9,161) — Lease value amortization included in rental income (2) 1,446 1,147 542 773 753 2,593 1,588 Non-cash straight line rent adjustments included in rental income (2) (5,667) (6,794) (2,339) (1,990) (2,744) (12,461) (5,835) Property Cash Basis NOI $ 107,514 $ 110,806 $ 60,050 $ 63,002 $ 65,991 $ 218,320 $ 129,840 (1) See Definitions of Certain Non-GAAP Financial Measures on page 26 for the definitions of Property NOI and Property Cash Basis NOI, a description of why we believe they are appropriate supplemental measures and a description of how we use these measures. Excludes three properties owned by our two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 for more information regarding these joint ventures. (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 and lease termination fees, if any. (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. 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. Office Properties Income Trust CALCULATION AND RECONCILIATION OF PROPERTY NOI AND PROPERTY CASH BASIS NOI AND PROPERTY NOI OF PROPERTY AND RECONCILIATION CALCULATION 20 Supplemental Operating and Financial Data, June 30, 2019
RECONCILIATION AND CALCULATION OF SAME PROPERTY NOI AND SAME PROPERTY CASH BASIS NOI (1)(2) (dollars in thousands) For the Three Months Ended (3) For the Six Months Ended (4) 6/30/2019 6/30/2018 6/30/2019 6/30/2018 Reconciliation of Property NOI to Same Property NOI: Rental income $ 176,032 $ 108,085 $ 350,809 $ 216,802 Property operating expenses (55,309) (39,982) (113,218) (82,473) Property NOI 120,723 68,103 237,591 134,329 Less: NOI of properties not included in same property results SIR assets acquired (67,415) — (127,937) — Historical OPI assets (395) (11,800) (4,388) (24,036) SAME PROPERTY CASH BASIS NOI SAME PROPERTY Same property NOI $ 52,913 $ 56,303 $ 105,266 $ 110,293 Calculation of Same Property Cash Basis NOI: Same property NOI $ 52,913 $ 56,303 $ 105,266 $ 110,293 Add: Lease value amortization included in rental income (5) 289 500 607 1,047 Less: Non-cash straight line rent adjustments included in rental income (5) (844) (2,330) (2,512) (4,868) Lease termination fees included in rental income (5) (1,519) — (1,519) — Non-cash amortization included in property operating expenses (6) (121) (118) (240) (233) Same property Cash Basis NOI $ 50,718 $ 54,355 $ 101,602 $ 106,239 (1) See Exhibit A on page 34 for pro forma summary same property results that include the SIR properties acquired in the Merger and Exhibit B on page 35 for a reconciliation and calculation of pro forma Same Property NOI and Same Property Cash Basis NOI. (2) See Definitions of Certain Non-GAAP Financial Measures on page 26 for the definitions of Property NOI and Property Cash Basis NOI, a description of why we believe they are appropriate supplemental measures and a description of how we use these measures. (3) Based on properties we owned continuously since April 1, 2018. Excludes three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 RECONCILIATION AND CALCULATION OF SAME PROPERTY NOI AND NOI OF SAME PROPERTY AND CALCULATION RECONCILIATION for more information regarding these joint ventures. (4) Based on properties we owned continuously since January 1, 2018. Excludes three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 for more information regarding these joint ventures. (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 and lease termination fees, if any. (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. Office Properties Income Trust 21 Supplemental Operating and Financial Data, June 30, 2019
re CALCULATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre (1) (dollars in thousands) For the Three Months Ended For the Six Months Ended 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 6/30/2019 6/30/2018 Net income (loss) $ (64,774) $ 34,019 $ (57,695) $ (449) $ 29,695 $ (30,755) $ 36,260 Add (less): Interest expense 35,348 37,133 20,421 23,374 23,304 72,481 46,070 Income tax (benefit) expense (130) 483 (7) 9 83 353 115 Depreciation and amortization 73,913 77,521 33,044 42,569 42,671 151,434 86,875 EBITDA 44,357 149,156 (4,237) 65,503 95,753 193,513 169,320 Add (less): Loss on impairment of real estate 2,380 3,204 2,830 — (316) 5,584 5,800 (Gain) loss on sale of real estate 17 (22,092) (3,332) — (17,329) (22,075) (17,329) AND ADJUSTED EBITDA AND Distributions received from unconsolidated joint ventures 600 521 705 813 1,410 1,121 2,233 re Distributions received from SIR — — — 12,708 12,708 — 25,416 Equity in earnings of SIR included in discontinued operations — — (515) (9,253) (4,301) — (14,590) Equity in losses of unconsolidated joint ventures 272 639 791 738 636 911 1,256 Net gain on issuance of shares by SIR included in discontinued operations — — — (21) (8) — (8) Loss on sale of SIR shares included in discontinued operations (2) — — 18,665 — — — — EBITDAre 47,626 131,428 14,907 70,488 88,553 179,054 172,098 Add (less): Acquisition and transaction related costs (3) 98 584 10,695 3,813 — 682 — General and administrative expense paid in common shares (4) 967 864 334 461 604 1,831 542 Estimated business management incentive fees (5) — — (16,973) 16,236 (2,150) — 737 Loss on early extinguishment of debt 71 414 709 — — 485 — Unrealized (gain) loss on equity securities (6) 66,135 (22,128) 48,229 (17,425) (10,321) 44,007 (23,252) Adjusted EBITDAre $ 114,897 $ 111,162 $ 57,901 $ 73,573 $ 76,686 $ 226,059 $ 150,125 CALCULATION OF EBITDA, EBITDA CALCULATION See accompanying notes on the following page. Office Properties Income Trust 22 Supplemental Operating and Financial Data, June 30, 2019
re CALCULATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre (1) (CONTINUED) (dollars in thousands) (1) See Definitions of Certain Non-GAAP Financial Measures on page 26 for the definitions of EBITDA, EBITDAre and Adjusted EBITDAre and a description of why we (CONTINUED) believe they are appropriate supplemental measures and a description of how we use these measures. (2) On October 9, 2018, we sold our entire investment in SIR at a loss. (3) Acquisition and transaction related costs consist of costs incurred in connection with the Merger. (4) Amounts represent equity based compensation to our trustees, our officers and certain other employees of RMR LLC. (5) 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 (loss). 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 AND ADJUSTED EBITDA AND Adjusted EBITDAre until the fourth quarter, when the amount of the business management incentive fee expense for the calendar year, if any, is determined. No re business management incentive fee was payable under our business management agreement for 2018. As successor to SIR as a result of the Merger, we assumed the obligation to pay SIR's business management incentive fee for 2018. SIR's business management incentive fee for 2018 of $25,817 was paid by us in January 2019. Pursuant to GAAP, the business management incentive fee that SIR incurred for 2018 was not recorded in our consolidated statement of income (loss) for the year ended December 31, 2018, but that amount was included in our consolidated balance sheet as of December 31, 2018 within due to related persons. (6) Unrealized gain (loss) on equity securities represents the adjustment required to adjust the carrying value of our investment in RMR Inc. common shares to its fair value as of the end of the period. On July 1, 2019, we sold our entire investment in RMR Inc. common stock. CALCULATION OF EBITDA, EBITDA CALCULATION Office Properties Income Trust 23 Supplemental Operating and Financial Data, June 30, 2019
CALCULATION OF FFO AVAILABLE FOR COMMON SHAREHOLDERS AND NORMALIZED FFO AVAILABLE FOR COMMON SHAREHOLDERS (1) (amounts in thousands, except per share data) For the Three Months Ended For the Six Months Ended 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 6/30/2019 6/30/2018 Net income (loss) available for common shareholders $ (64,774) $ 34,019 $ (57,695) $ (449) $ 29,602 $ (30,755) $ 35,889 Add (less): Depreciation and amortization: Consolidated properties 73,913 77,521 33,044 42,569 42,671 151,434 86,875 Unconsolidated joint venture properties 1,410 1,751 1,920 1,913 2,185 3,161 4,370 FFO attributable to SIR investment — — 1,859 19,012 12,414 — 30,902 Loss on impairment of real estate 2,380 3,204 2,830 — (316) 5,584 5,800 Equity in earnings of SIR included in discontinued operations — — (515) (9,253) (4,301) — (14,590) (Gain) loss on sale of real estate 17 (22,092) (3,332) — (17,329) (22,075) (17,329) Unrealized (gain) loss on equity securities (2) 66,135 (22,128) 48,229 (17,425) (10,321) 44,007 (23,252) FFO available for common shareholders 79,081 72,275 26,340 36,367 54,605 151,356 108,665 Add (less): Acquisition and transaction related costs (3) 98 584 10,695 3,813 — 682 — Loss on early extinguishment of debt 71 414 709 — — 485 — Normalized FFO attributable to SIR investment — — 1,524 15,584 11,292 — 26,898 FFO attributable to SIR investment — — (1,859) (19,012) (12,414) — (30,902) Net gain on issuance of shares by SIR included in discontinued operations — — — (21) (8) — (8) Estimated business management incentive fees (4) — — (16,973) 16,236 (2,150) — 737 Loss on sale of SIR shares included in discontinued operations (5) — — 18,665 — — — — Normalized FFO available for common shareholders $ 79,250 $ 73,273 $ 39,101 $ 52,967 $ 51,325 $ 152,523 $ 105,390 Weighted average common shares outstanding (basic) 48,049 48,031 25,027 24,768 24,763 48,040 24,762 Weighted average common shares outstanding (diluted) 48,049 48,046 25,027 24,768 24,766 48,040 24,763 Per common share amounts: Net income (loss) available for common shareholders (basic and diluted) $ (1.35) $ 0.71 $ (2.31) $ (0.02) $ 1.20 $ (0.64) $ 1.45 FFO available for common shareholders (basic) $ 1.65 $ 1.50 $ 1.05 $ 1.47 $ 2.21 $ 3.15 $ 4.39 FFO available for common shareholders (diluted) $ 1.65 $ 1.50 $ 1.05 $ 1.47 $ 2.20 $ 3.15 $ 4.39 NORMALIZED FFO AVAILABLE FOR COMMON SHAREHOLDERS AVAILABLE NORMALIZED FFO Normalized FFO available for common shareholders (basic and diluted) $ 1.65 $ 1.53 $ 1.56 $ 2.14 $ 2.07 $ 3.17 $ 4.26 CALCULATION OF FFO AVAILABLE FOR COMMON SHAREHOLDERS AND FOR COMMON SHAREHOLDERS AVAILABLE OF FFO CALCULATION See accompanying notes on the following page. Office Properties Income Trust 24 Supplemental Operating and Financial Data, June 30, 2019
CALCULATION OF FFO AVAILABLE FOR COMMON SHAREHOLDERS AND NORMALIZED FFO AVAILABLE FOR COMMON SHAREHOLDERS (1) (CONTINUED) (amounts in thousands, except per share data) (1) See Definitions of Certain Non-GAAP Financial Measures on page 26 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) Unrealized gain (loss) on equity securities represents the adjustment required to adjust the carrying value of our investment in RMR Inc. common stock to its fair value as of the end of the period. On July 1, 2019, we sold our entire investment in RMR Inc. common stock. (3) Acquisition and transaction related costs consist of costs incurred in connection with the Merger. (4) 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 (loss). In calculating net income (loss) available for common shareholders in accordance with GAAP, we recognize estimated business management incentive fee expense, if any, in the first, second and third quarters. Although we recognize this expense, if any, in the first, second and third quarters for purposes of calculating net income (loss) available for common shareholders, we do not include such expense in the calculation of Normalized FFO available for common shareholders until the fourth quarter, when the amount of the business management incentive fee expense for the calendar year, if any, is determined. No business management incentive fee was payable under our business management agreement for 2018. As successor to SIR as a result of the Merger, we assumed the obligation to pay SIR's business management incentive fee for 2018. SIR's business management incentive fee for 2018 of $25,817 was paid by us in January 2019. Pursuant to GAAP, the business management incentive fee that SIR incurred for 2018 was not recorded in our consolidated statement of income (loss) for the year ended December 31, 2018, but that amount was included in our consolidated balance sheet as of December 31, 2018 within due to related persons. (5) On October 9, 2018, we sold our entire investment in SIR at a loss. CALCULATION OF FFO AVAILABLE FOR COMMON SHAREHOLDERS AND FOR COMMON SHAREHOLDERS AVAILABLE OF FFO CALCULATION NORMALIZED FFO AVAILABLE FOR COMMON SHAREHOLDERS (CONTINUED) AVAILABLE NORMALIZED FFO Office Properties Income Trust 25 Supplemental Operating and Financial Data, June 30, 2019
DEFINITIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES Non-GAAP Financial Measures We present certain “non-GAAP financial measures” within the meaning of applicable SEC rules, including Property NOI, Property Cash Basis NOI, Same Property NOI, Same Property Cash Basis NOI, Pro Forma Same Property NOI, Pro Forma Same Property Cash Basis NOI, EBITDA, EBITDAre, Adjusted EBITDAre, Pro Forma EBITDA, Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDAre, FFO available for common shareholders and Normalized FFO available for common shareholders. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to income (loss) from continuing operations, net income (loss) or net income (loss) available for common shareholders as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with income (loss) from continuing operations, net income (loss) and net income (loss) available for common shareholders as presented in our condensed consolidated statements of income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with income (loss) from continuing operations, net income (loss) and net income (loss) available for common shareholders. We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of our operating performance between periods and with other REITs and, in the case of Property NOI, Property Cash Basis NOI, Same Property NOI, Same Property Cash Basis NOI, Pro Forma Same Property NOI and Pro Forma Same Property Cash Basis NOI reflecting only those income and expense items that are generated and incurred at the property level may help both investors and management to understand the operations at our properties. Property NOI and Property Cash Basis NOI The calculations of Property net operating income, or NOI, and 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 property level results of operations. We calculate Property NOI and Property Cash Basis NOI as shown on page 20, Same Property NOI and Same Property Cash Basis NOI as shown on page 21, and Pro Forma Same Property NOI and Pro Forma Same Property Cash Basis NOI as shown in Exhibit B. We define Property NOI as income from our rental of real estate less our property operating expenses. Property NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that we record as depreciation and amortization expense. We define Property Cash Basis NOI as Property NOI excluding non-cash straight line rent adjustments, lease value amortization, lease termination fees, if any, and non-cash amortization included in other operating expenses. We calculate Same Property NOI and Same Property Cash Basis NOI in the same manner that we calculate the corresponding Property NOI and Property Cash Basis NOI amounts, except that we only include same properties in calculating Same Property NOI and Same Property Cash Basis NOI. We calculate Pro Forma Same Property NOI and Pro Forma Same Property Cash Basis NOI in the same manner we calculate the corresponding Same Property NOI and Same Property Cash Basis NOI, except that we calculate Pro Forma Same Property NOI and Pro Forma Same Property Cash Basis NOI as if the Merger had been completed on January 1, 2018. We use Property NOI, Property Cash Basis NOI, Same Property NOI, Same Property Cash Basis NOI, Pro Forma Same Property NOI and Pro Forma Same Property Cash Basis NOI to evaluate individual and company-wide property level performance. Other real estate companies and REITs may calculate Property NOI, Property Cash Basis NOI, Same Property NOI, Same Property Cash Basis NOI, Pro Forma Same Property NOI and Pro Forma Same Property Cash Basis NOI differently than we do. EBITDA, EBITDAre and Adjusted EBITDAre We calculate earnings before interest, taxes, depreciation and amortization, or EBITDA, EBITDA for real estate, or EBITDAre, and Adjusted EBITDAre as shown on page 22. EBITDAre is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or Nareit, which is EBITDA, excluding gains and losses on the sale of real estate, loss on impairment of real estate assets and adjustments to reflect our share of EBITDAre of our unconsolidated joint ventures and our prior investment in SIR included in discontinued operations. In calculating Adjusted EBITDAre, we adjust for the items shown on page 22 and include business management incentive fees 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. Other real estate companies and REITs may calculate EBITDA, EBITDAre and Adjusted EBITDAre differently than we do. FFO and Normalized FFO We calculate funds from operations, or FFO, available for common shareholders and Normalized FFO available for common shareholders as shown on page 24. FFO available for common shareholders is calculated on the basis defined by 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 and equity in earnings of SIR included in discontinued operations, 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. In calculating Normalized FFO available for common shareholders, we adjust for the items shown on page 24 and include business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as an 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. FFO DEFINITIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES FINANCIAL NON-GAAP DEFINITIONS OF CERTAIN 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 and our expected needs for and availability of cash to pay our obligations. Other real estate companies and REITs may calculate FFO available for common shareholders and Normalized FFO available for common shareholders differently than we do. Office Properties Income Trust 26 Supplemental Operating and Financial Data, June 30, 2019
PORTFOLIO INFORMATION Stevens Center, Richland, WA Square Feet:Office 140,152 Properties Income Trust 27 Agency Occupant:Supplemental Department Operating and of FinancialEnergy Data, June 30, 2019
SUMMARY SAME PROPERTY RESULTS (dollars and sq. ft. in thousands) For the Three Months Ended (1) (2) For the Six Months Ended (1)(3) 6/30/2019 6/30/2018 6/30/2019 6/30/2018 Properties (end of period) 112 112 112 112 Total sq. ft. (4) 13,474 13,474 13,474 13,474 Percent leased (5) 92.9 % 94.3% 92.9% 94.3% Rental income (6) $ 88,004 $ 90,634 $ 175,520 $ 180,033 Same Property NOI (7) $ 52,913 $ 56,303 $ 105,266 $ 110,293 Same Property Cash Basis NOI (8) $ 50,718 $ 54,355 $ 101,602 $ 106,239 Same Property NOI % margin (8) 60.1% 62.1% 60.0% 61.3% Same Property Cash Basis NOI % margin (8) 58.0% 61.2% 58.5% 60.3% Property NOI % change (6.0%) (4.6%) Same Property Cash Basis NOI % change (6.7%) (4.4%) (1) Excludes the SIR properties acquired in the Merger. See Exhibit A on page 34 for pro forma summary same property results as if the SIR properties acquired in the Merger were owned SUMMARY SAME PROPERTY RESULTS SAME PROPERTY SUMMARY continuously since January 1, 2018. (2) Based on properties we owned continuously since April 1, 2018. Excludes three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 for more information regarding these joint ventures. (3) Based on properties we owned continuously since January 1, 2018. Excludes three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 for more information regarding these joint ventures. (4) Subject to changes when space is remeasured or reconfigured for tenants. (5) 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. (6) 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 and lease termination fees, if any. (7) See page 20 for the calculation of Property NOI and 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. (8) Same Property NOI margin is defined as Same Property NOI as a percentage of rental income. Same Property Cash Basis NOI margin is defined as Same Property Cash Basis NOI as a percentage of cash basis rental income. Cash basis rental income excludes non-cash straight line rent adjustments and the net effect of non-cash amortization of intangible lease assets and liabilities and lease termination fees, if any. Office Properties Income Trust 28 Supplemental Operating and Financial Data, June 30, 2019
OCCUPANCY AND LEASING SUMMARY (1) (2) (dollars and sq. ft. in thousands, except per sq. ft. data) As of and for the Three Months Ended 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 Properties (end of period) 209 (3) 212 (3) 247 (3) (4) 164 164 Total sq. ft. (5) 29,309 (3) 30,134 (3) 31,900 (3) (4) 17,046 17,046 Percentage leased 91.6% (3) 89.6% (3) 91.0% (3) (4) 93.3% 94.0% Leasing Activity (sq. ft.): (5) New leases 122 121 117 84 117 Renewals 449 704 407 98 279 Total 571 825 524 182 396 % Change in GAAP Rent: (6) New leases (11.1%) 3.6% 1.8% 0.6% (2.5%) Renewals (3.9%) 14.3% (9.9%) (1.1%) 1.6% Total (5.3%) 12.8% (8.2%) (0.4%) 0.6% Weighted Average Lease Term by Sq. Ft. (years): New leases 8.0 8.8 7.0 7.0 6.8 Renewals 6.4 7.3 7.6 9.0 5.9 Total 6.7 7.5 7.5 8.1 6.2 Leasing Cost and Concession Commitments: (7) New leases $ 8,709 $ 13,591 $ 5,334 $ 3,796 $ 4,653 OCCUPANCY AND LEASING SUMMARY AND LEASING SUMMARY OCCUPANCY Renewals 6,668 15,213 10,514 2,683 2,157 Total $ 15,377 $ 28,804 $ 15,848 $ 6,479 $ 6,810 Leasing Cost and Concession Commitments per Sq. Ft.: (7) New leases $ 71.66 $ 112.00 $ 45.75 $ 44.89 $ 39.76 Renewals $ 14.84 $ 21.60 $ 25.82 $ 27.47 $ 7.72 Total $ 26.94 $ 34.89 $ 30.25 $ 35.56 $ 17.18 Leasing Cost and Concession Commitments per Sq. Ft. per Year: (7) New leases $ 8.92 $ 12.79 $ 6.51 $ 6.46 $ 5.84 Renewals $ 2.34 $ 2.98 $ 3.38 $ 3.05 $ 1.31 Total $ 4.01 $ 4.67 $ 4.03 $ 4.41 $ 2.79 (1) Excludes three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 for more information regarding these joint ventures. (2) The data presented as of December 31, 2018 and prior periods exclude the SIR properties acquired in the Merger, unless otherwise stated. (3) Includes one leasable land parcel as of June 30, 2019, and two leasable land parcels as of March 31, 2019 and December 31, 2018. (4) Includes the SIR properties acquired in the Merger. (5) Rentable square footage is subject to changes when space is remeasured or reconfigured for tenants. (6) 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. (7) Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent. The above leasing summary is based on leases entered during the periods indicated. Office Properties Income Trust 29 Supplemental Operating and Financial Data, June 30, 2019
TENANT DIVERSITY AND CREDIT CHARACTERISTICS As of June 30, 2019 Percentage of Total Annualized Rental Income (1) Tenant Industry Tenant Credit Characteristics (2) (4) (3) TENANT DIVERSITY AND CREDIT CHARACTERISTICS TENANT DIVERSITY (1) Annualized rental income is calculated using the annualized contractual base rents from our tenants pursuant to our lease agreements as of June 30, 2019, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. (2) We consider investment grade tenants to include: (a) investment grade rated tenants; (b) tenants with investment grade rated parent entities that guarantee the tenant's lease obligations; and/or (c) tenants with investment grade rated parent entities that do not guarantee the tenant's lease obligations. Tenants contributing 56.6% of annualized rental income were investment grade rated (or their payment obligations were guaranteed by an investment grade rated parent) and tenants contributing an additional 8.6% of annualized rental income were subsidiaries of an investment grade rated parent (although these parent entities are not liable for the payment of rents). (3) Includes the U.S. Government, state governments, municipalities and government contractors. Office Properties Income Trust 30 Supplemental Operating and Financial Data, June 30, 2019
TENANTS REPRESENTING 1% OR MORE OF TOTAL ANNUALIZED RENTAL INCOME As of June 30, 2019 (dollars in thousands) Annualized % of Total Annualized Tenant Credit Rating (1) Rental Income (2) Rental Income (2) 1 U.S. Government Investment Grade $ 169,225 25.6% 2 State of California Investment Grade 19,040 2.9% 3 Shook, Hardy & Bacon L.L.P. Not Rated 18,854 2.9% 4 Bank of America Corporation Investment Grade 16,604 2.5% 5 F5 Networks, Inc. Not Rated 14,416 2.2% 6 Noble Energy, Inc. Investment Grade 14,149 2.1% 7 Marathon Petroleum Corp. Investment Grade 14,141 2.1% 8 WestRock Co. Investment Grade 12,842 1.9% 9 CareFirst Inc. Non Investment Grade 11,619 1.8% 10 Northrop Grumman Corporation Investment Grade 11,346 1.7% 11 Tyson Foods, Inc. Investment Grade 10,253 1.5% 12 Technicolor SA Non Investment Grade 10,034 1.5% 13 Commonwealth of Massachusetts Investment Grade 9,693 1.5% 14 Micro Focus International plc Non Investment Grade 8,710 1.3% 15 CommScope Holding Company, Inc. Non Investment Grade 7,931 1.2% 16 PNC Bank Investment Grade 6,897 1.1% 17 State of Georgia Investment Grade 6,790 1.0% $ 362,544 54.8% (1) We consider investment grade tenants to include: (a) investment grade rated tenants; (b) tenants with investment grade rated parent entities that guarantee the tenant's lease obligations; and (c) tenants with investment grade rated parent entities that do not guarantee the tenant's lease obligations. Tenants contributing 56.6% of annualized rental income were investment grade rated (or their payment obligations were guaranteed by an investment grade rated parent) and tenants contributing an additional 8.6% of annualized rental income were subsidiaries of an investment grade rated parent (although these parent entities were not liable for the payment of rents). (2) Annualized rental income is calculated using the annualized contractual base rents from our tenants pursuant to our lease agreements as of June 30, 2019, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. Office Properties Income Trust 31 TENANTS REPRESENTING 1% OR MORE OF TOTAL ANNUALIZED RENTAL INCOME ANNUALIZED RENTAL TENANTS REPRESENTING 1% OR MORE OF TOTAL Supplemental Operating and Financial Data, June 30, 2019
LEASE EXPIRATION SCHEDULE (1) As of June 30, 2019 (dollars and sq. ft. in thousands) % of Total Cumulative % of Cumulative % of Leased Total Leased % of Total Total Annualized Number of Leased Square Square Feet Square Feet Annualized Rental Annualized Rental Rental Income Year (2) Leases Expiring Feet Expiring (3) Expiring (3) Expiring (3) Income Expiring (4) Income Expiring (4) Expiring (4) 2019 49 1,770 6.6% 6.6% $ 52,762 8.0% 8.0% 2020 69 1,619 6.0% 12.6% 43,054 6.5% 14.5% 2021 69 1,991 7.4% 20.0% 46,156 7.0% 21.5% 2022 86 2,378 8.9% 28.9% 61,304 9.3% 30.8% 2023 64 2,866 10.7% 39.6% 72,073 10.9% 41.7% 2024 61 3,725 13.9% 53.5% 95,088 14.4% 56.1% 2025 36 2,042 7.6% 61.1% 44,467 6.7% 62.8% 2026 28 1,911 7.1% 68.2% 49,628 7.5% 70.3% LEASE EXPIRATION SCHEDULE LEASE EXPIRATION 2027 28 1,999 7.4% 75.6% 49,073 7.4% 77.7% 2028 and thereafter 53 6,559 24.4% 100.0% 148,164 22.3% 100.0% Total 543 26,860 100.0% $ 661,769 100.0% Weighted average remaining lease term (in years) 6.0 5.8 (1) Excludes three properties owned by two unconsolidated joint ventures in which we own 51% and 50% 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 feet is pursuant to leases existing as of June 30, 2019, 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 remeasured or reconfigured 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 June 30, 2019, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. Office Properties Income Trust 32 Supplemental Operating and Financial Data, June 30, 2019
75 Pleasant Street, Malden, MA Square Feet: 125,521 Occupant: Department of Education, Commonwealth of Massachusetts EXHIBITS Certain pro forma financial information is presented in the Exhibits to this supplemental operating and financial data report, as well as certain property information for SIR, as if the Merger had occurred on October 1, 2018. Such pro forma financial information is not necessarily indicative of our expected financial position or results of operations for any future period. Differences could result from numerous factors, including future changes in our portfolio of investments, our capital structure, our property levelOffice operating Properties expenses Income and revenues, Trust including rents expected to be received on our existing leases or leases we may enter into, changes in interest rates and other reasons. Actual future results are likely to be different33 from amounts presented in theSupplemental pro forma financial Operating information and and Financialsuch differences Data, could June 30, be significant. 2019
PRO FORMA SUMMARY SAME PROPERTY RESULTS (1) EXHIBIT A (dollars and sq. ft. in thousands) For the Three Months Ended OPI (Excluding SIR Properties): 6/30/2019 6/30/2018 Leasable properties 112 112 Total sq. ft. (2) 13,474 13,474 Percent leased (3) 92.9% 94.3% Same Property Cash Basis NOI (4) $ 50,718 $ 54,355 Same Property Cash Basis NOI % change (6.7%) For the Three Months Ended SIR Properties: 6/30/2019 6/30/2018 As reported Less: SIR (excluding ILPT) Dispositions (5) Pro Forma SIR Leasable properties (6) 97 100 (3) 97 Total sq. ft. (2) 15,835 16,956 (1,121) 15,835 Percent leased (3) 90.6% 87.5% —% 88.7% Same Property Cash Basis NOI (4) $ 56,554 $ 55,519 $ 630 $ 56,149 Same Property Cash Basis NOI % change 0.7% For the Three Months Ended Pro Forma Combined: 6/30/2019 6/30/2018 Leasable properties (6) 209 209 Total sq. ft. (2) 29,309 29,309 Percent leased (3) 91.6% 94.0% Same Property Cash Basis NOI (4) $ 107,272 $ 110,504 Same Property Cash Basis NOI % change (2.9%) PRO FORMA SUMMARY SAME PROPERTY RESULTS SAME PROPERTY SUMMARY PRO FORMA (1) OPI (excluding SIR properties) same property results for the three months ended June 30, 2019 and 2018 are based on properties owned continuously since April 1, 2018. SIR properties same property results for the three months ended June 30, 2019 and 2018 are based on properties SIR owned prior to the Merger and owned continuously since April 1, 2018 and which OPI owned continuously since the Merger. Pro forma combined same property results combine the same property results of OPI and SIR for the three months ended June 30, 2019 and 2018, as if the Merger had occurred on January 1, 2018. See calculation of pro forma Same Property Cash Basis NOI for the three months ended June 30, 2019 on page 35. (2) Subject to changes when space is remeasured or reconfigured 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 Definitions of Certain Non-GAAP Financial Measures on page 26 for the definition of Same Property Cash Basis NOI, a description of why we believe it is an appropriate supplemental measure and a description of how we use this measure. (5) Includes a vacant land parcel SIR sold in August 2018, a property OPI sold in May 2019 and a vacant land parcel OPI sold in June 2019. (6) Includes one leasable land parcel as of June 30, 2019 and pro forma June 30, 2018. Office Properties Income Trust 34 Supplemental Operating and Financial Data, June 30, 2019
RECONCILIATION AND CALCULATION OF PRO FORMA EXHIBIT B SAME PROPERTY NOI AND SAME PROPERTY CASH BASIS NOI (1) (dollars in thousands) For the Three Months Ended June 30, 2019 OPI (Excludes SIR Pro Forma SIR Properties) Properties Combined Reconciliation of Property NOI to Same Property NOI: (2) Rental income (3) $ 88,663 $ 87,369 $ 176,032 Property operating expenses (35,355) (19,954) (55,309) Property NOI 53,308 67,415 120,723 Less: NOI of properties not included in same property results (395) — (395) Same property NOI $ 52,913 $ 67,415 $ 120,328 Calculation of Same Property Cash Basis NOI: (2) Same property NOI $ 52,913 $ 67,415 $ 120,328 Add: Lease value amortization included in rental income (3) 289 1,156 1,445 Less: Non-cash straight line rent adjustments included in rental income (3) (844) (4,669) (5,513) Lease termination fees included in rental income (3) (1,519) (7,348) (8,867) Non-cash amortization included in property operating expenses (4) (121) — (121) Same Property Cash Basis NOI $ 50,718 $ 56,554 $ 107,272 RECONCILIATION AND CALCULATION OF PRO FORMA OF PRO FORMA AND CALCULATION RECONCILIATION (1) See Definitions of Certain Non-GAAP Financial Measures on page 26 for the definitions of Property NOI and 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) OPI (excluding SIR properties) same property results for the three months ended June 30, 2019 are based on properties owned continuously since April 1, 2018. SIR properties same property results for the three months ended June 30, 2019 are based on properties SIR owned prior to the Merger and owned continuously since April 1, 2018 and which OPI owned continuously since the Merger. Pro forma combined same property results combine the same property results of OPI and SIR for the three months ended June 30, 2019 and as if the Merger had occurred on January 1, 2018. SAME PROPERTY NOI AND SAME PROPERTY CASH BASIS NOI AND SAME PROPERTY NOI SAME PROPERTY (3) We report rental income on a straight line basis over the terms of the respective leases; as a result, 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 its tenants, as well as the net effect of non-cash amortization of intangible lease assets and liabilities and lease termination fees, if any. (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 is included in property operating expenses. Office Properties Income Trust 35 Supplemental Operating and Financial Data, June 30, 2019
PRO FORMA CAPITAL EXPENDITURES SUMMARY (1)(2) EXHIBIT C (dollars in thousands) For the Three Months Ended OPI: 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 Tenant improvements (3) $ 7,123 $ 4,912 $ 5,450 $ 2,293 $ 3,854 Leasing costs (4) 6,760 7,325 5,635 1,831 1,626 Building improvements (5) 7,317 4,308 11,250 6,707 4,048 Recurring capital expenditures 21,200 16,545 22,335 10,831 9,528 Development, redevelopment and other activities (6) 959 226 1,148 664 734 Total capital expenditures $ 22,159 $ 16,771 $ 23,483 $ 11,495 $ 10,262 SIR Properties: Tenant improvements (3) $ — $ — $ 1,109 $ 3,318 $ 6,671 Leasing costs (4) — — 893 211 308 Building improvements (5) — — 1,261 1,464 660 Recurring capital expenditures — — 3,263 4,993 7,639 Development, redevelopment and other activities (6) — — 392 950 1,067 Total capital expenditures $ — $ — $ 3,655 $ 5,943 $ 8,706 Pro Forma Combined: Tenant improvements (3) $ 7,123 $ 4,912 $ 6,559 $ 5,611 $ 10,525 Leasing costs (4) 6,760 7,325 6,528 2,042 1,934 Building improvements (5) 7,317 4,308 12,511 8,171 4,708 Recurring capital expenditures 21,200 16,545 25,598 15,824 17,167 Development, redevelopment and other activities (6) 959 226 1,540 1,614 1,801 Total capital expenditures $ 22,159 $ 16,771 $ 27,138 $ 17,438 $ 18,968 (1) Historical data for OPI for periods prior to the three months ended March 31, 2019 does not include capital expenditures for the SIR properties acquired in the Merger. PRO FORMA CAPITAL EXPENDITURES SUMMARY EXPENDITURES SUMMARY CAPITAL PRO FORMA (2) The OPI data presented excludes capital expenditures of three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. See page 19 for additional information regarding these joint ventures. (3) Tenant improvements include capital expenditures used to improve tenants' space or amounts paid directly to tenants to improve their space. (4) Leasing costs include leasing related costs, such as brokerage commissions and tenant inducements. (5) Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets. (6) 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, or (ii) capital expenditure projects that reposition a property or result in new sources of revenue. Office Properties Income Trust 36 Supplemental Operating and Financial Data, June 30, 2019
re PRO FORMA CALCULATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre (1) AS IF THE MERGER HAD OCCURRED ON OCTOBER 1, 2018 EXHIBIT D (dollars in thousands) For the Three Months Ended December 31, 2018 Sale of OPI ILPT SIR Pro Forma OPI SIR Shares Adjusted SIR Distribution Adjusted Adjustments Pro Forma Net loss $ (57,695) $ (139) $ (57,834) $ (51,551) $ (17,493) $ (69,044) $ (4,744) $ (131,622) Add (less): Interest expense 20,421 (376) 20,045 23,701 (4,472) 19,229 241 39,515 Income tax (benefit) expense (7) — (7) 10 (8) 2 — (5) Depreciation and amortization 33,044 — 33,044 36,220 (7,327) 28,893 5,782 67,719 EBITDA (4,237) (515) (4,752) 8,380 (29,300) (20,920) 1,279 (24,393) and ADJUSTED EBITDA and Add (less): Loss on impairment of real estate 2,830 — 2,830 — — — — 2,830 re Gain on sale of real estate (3,332) — (3,332) — — — — (3,332) Distributions received from unconsolidated joint ventures 705 — 705 — — — — 705 Equity in earnings of SIR included in discontinued operations (515) 515 — — — — — — Equity in losses of unconsolidated joint ventures 791 — 791 — — — — 791 Loss on sale of SIR common shares included in discontinued operations (2) 18,665 — 18,665 — — — — 18,665 EBITDAre 14,907 — 14,907 8,380 (29,300) (20,920) 1,279 (4,734) Add (less): Acquisition and transaction related costs (3) 10,695 — 10,695 9,193 — 9,193 — 19,888 General and administrative expense paid in common shares (4) 334 — 334 842 (235) 607 — 941 Estimated business management incentive fees (5) (16,973) — (16,973) (21,479) — (21,479) — (38,452) Loss on extinguishment of debt 709 — 709 — — — — 709 Unrealized loss on equity securities (6) 48,229 — 48,229 63,029 — 63,029 — 111,258 Adjusted EBITDAre $ 57,901 $ — $ 57,901 $ 59,965 $ (29,535) $ 30,430 $ 1,279 $ 89,610 (1) See Definitions of Certain Non-GAAP Financial Measures on page 26 for the definitions of EBITDA, EBITDAre and Adjusted EBITDAre and a description of why we believe they are appropriate supplemental measures and a description of how we use these measures. (2) On October 9, 2018, we sold our entire investment in SIR at a loss. (3) Acquisition and transaction related costs include costs incurred in connection with the Merger. (4) Amounts represent equity compensation awarded to our trustees, officers and certain other employees of RMR LLC. (5) 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 (loss). In calculating net 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 EBITDAre until the fourth quarter, when the amount of the business management incentive fee expense for the calendar year, if any, is determined. No incentive management fee was payable under our business management agreement for the year ended December 31, 2018. As successor to SIR as a result of the Merger, we assumed the obligation to pay SIR's business management incentive fee for 2018. SIR's business management incentive fee for 2018 of $25,817 was paid by us in January 2019 and is reflected in the pro forma calculation of Adjusted EBITDAre as shown above in the SIR and SIR Adjusted columns. (6) Unrealized loss on equity securities represents the adjustment required to adjust the carrying value of our investment in RMR Inc. common shares to its fair value as of the end of the period. On July 1, 2019, we sold our entire investment in RMR Inc. common stock. Office Properties Income Trust 37 PRO FORMA CALCULATION OF EBITDA, EBITDA CALCULATION PRO FORMA Supplemental Operating and Financial Data, June 30, 2019
EXHIBIT E PROPERTY DETAIL(1) As of June 30, 2019 (dollars and square feet in thousands) Annualized Year Built or No. of Rentable Rental Undepreciated Depreciated Date Most Recent Property City, State Properties Sq. Ft. % Leased Income (2) Carrying Value (3) Carrying Value (3) Acquired (4) Renovation Inverness Center Birmingham, AL 3 448 25.2% $ 2,452 $ 18,414 $ 18,231 12/31/2018 1985 445 Jan Davis Drive Huntsville, AL 1 57 100.0% 1,038 3,016 2,996 12/31/2018 2007 4905 Moores Mill Road Huntsville, AL 1 1,371 100.0% 10,034 41,748 41,204 12/31/2018 2007 PROPERTY DETAIL PROPERTY 131 Clayton Street Montgomery, AL 1 58 100.0% 1,575 10,061 8,239 6/22/2011 2007 4344 Carmichael Road Montgomery, AL 1 49 100.0% 1,527 13,042 11,439 12/17/2013 2009 15451 North 28th Avenue Phoenix, AZ 1 67 100.0% 1,473 9,937 8,993 9/10/2014 2013 16001 North 28th Avenue Phoenix, AZ 1 106 100.0% 1,914 3,833 3,827 12/31/2018 2007 2149 West Dunlap Avenue Phoenix, AZ 1 123 100.0% 2,553 6,824 6,821 12/31/2018 1983 711 S 14th Avenue Safford, AZ 1 36 94.4% 920 8,229 7,907 6/16/2010 1992 Regents Center Tempe, AZ 2 101 100.0% 2,130 7,220 7,144 12/31/2018 1988 Campbell Place Carlsbad, CA 2 95 100.0% 2,576 9,799 9,741 12/31/2018 2007 Folsom Corporate Center Folsom, CA 1 96 100.0% 2,965 8,555 8,467 12/31/2018 2009 5045 East Butler Street Fresno, CA 1 532 100.0% 8,384 68,533 42,735 8/29/2002 1971 10949 N. Mather Boulevard Rancho Cordova, CA 1 94 100.0% 2,609 17,844 15,423 10/30/2013 2012 11020 Sun Center Drive Rancho Cordova, CA 1 83 100.0% 2,024 10,938 10,278 12/20/2016 2016 100 Redwood Shores Parkway Redwood City, CA 1 63 100.0% 3,214 22,351 22,243 12/31/2018 2014 3875 Atherton Road Rocklin, CA 1 19 100.0% 420 1,038 1,027 12/31/2018 1991 801 K Street Sacramento, CA 1 338 89.9% 9,882 73,198 66,096 1/29/2016 2002 9815 Goethe Road Sacramento, CA 1 88 100.0% 1,953 12,438 10,275 9/14/2011 1992 Capitol Place Sacramento, CA 1 164 92.7% 4,878 47,323 36,276 12/17/2009 1988 4560 Viewridge Road San Diego, CA 1 93 100.0% 3,350 26,904 15,835 3/31/1997 1996 2115 O’Nel Drive San Jose, CA 1 99 100.0% 3,352 17,505 17,434 12/31/2018 2013 6448-6450 Via Del Oro San Jose, CA 1 76 —% — 6,774 6,746 12/31/2018 1983 North First Street San Jose, CA 1 64 100.0% 2,202 12,412 12,354 12/31/2018 2013 Rio Robles Drive San Jose, CA 3 186 100.0% 4,882 37,723 37,526 12/31/2018 2011 2450 and 2500 Walsh Avenue Santa Clara, CA 2 132 100.0% 4,803 30,263 30,030 12/31/2018 2014 3250 and 3260 Jay Street Santa Clara, CA 2 149 100.0% 6,335 34,219 34,022 12/31/2018 2013 603 San Juan Avenue Stockton, CA 1 22 100.0% 971 6,033 5,087 7/20/2012 2012 350 West Java Drive Sunnyvale, CA 1 96 100.0% 3,128 25,268 25,261 12/31/2018 2012 7958 South Chester Street Centennial, CO 1 168 100.0% 5,202 13,945 13,845 12/31/2018 2000 350 Spectrum Loop Colorado Springs, CO 1 156 100.0% 2,686 11,558 11,450 12/31/2018 2000 333 Inverness Drive South Englewood, CO 1 140 100.0% 3,018 10,335 10,266 12/31/2018 1998 12795 West Alameda Parkway Lakewood, CO 1 167 100.0% 4,544 27,677 21,802 1/15/2010 1988 Corporate Center Lakewood, CO 3 213 100.0% 4,819 34,313 21,361 10/11/2002 2004 1 Targeting Center Windsor, CT 1 97 100.0% 1,281 1,978 1,969 12/31/2018 1999 11 Dupont Circle, NW Washington, DC 1 153 78.4% 7,301 76,655 74,238 10/2/2017 2004 1211 Connecticut Avenue, NW Washington, DC 1 132 80.3% 5,097 56,595 55,300 10/2/2017 2014 1401 K Street, NW Washington, DC 1 123 87.8% 6,117 67,471 65,292 10/2/2017 2016 20 Massachusetts Avenue Washington, DC 1 334 76.3% 14,902 84,933 48,745 3/31/1997 1996 440 First Street, NW Washington, DC 1 142 96.5% 8,390 67,820 66,019 10/2/2017 2013 See notes on page 42. Office Properties Income Trust 38 Supplemental Operating and Financial Data, June 30, 2019
EXHIBIT E PROPERTY DETAIL (CONTINUED) (1) As of June 30, 2019 (dollars and square feet in thousands) Annualized Year Built or No. of Rentable Rental Undepreciated Depreciated Date Most Recent Property City, State Properties Sq. Ft. % Leased Income (2) Carrying Value (3) Carrying Value (3) Acquired (4) Renovation 625 Indiana Avenue Washington, DC 1 161 95.0% 7,597 59,407 51,296 8/17/2010 1989 840 First Street, NE Washington, DC 1 253 98.4% 13,515 117,376 114,118 10/2/2017 2003 10350 NW 112th Avenue Miami, FL 1 79 100.0% 3,111 7,615 7,577 12/31/2018 2002 7850 Southwest 6th Court Plantation, FL 1 136 100.0% 4,441 35,775 29,353 5/12/2011 1999 8900 Grand Oak Circle Tampa, FL 1 68 100.0% 2,062 13,177 10,548 10/15/2010 2008 180 Ted Turner Drive SW Atlanta, GA 1 91 100.0% 3,664 25,959 22,473 7/25/2012 2007 Corporate Square Atlanta, GA 5 378 100.0% 8,530 61,656 47,251 7/16/2004 1967 Executive Park Atlanta, GA 1 126 100.0% 1,612 17,343 11,234 7/16/2004 2014 One Georgia Center Atlanta, GA 1 376 96.5% 8,008 45,857 39,850 9/30/2011 2008 One Primerica Parkway Duluth, GA 1 344 100.0% 5,398 30,114 29,794 12/31/2018 2013 4712 Southpark Boulevard Ellenwood, GA 1 352 100.0% 3,131 21,139 17,736 7/25/2012 2005 91-209 Kuhela Street Kapolei, HI 1 109 —% — 2,008 2,008 12/31/2018 Land 8305 NW 62nd Avenue Johnston, IA 1 199 100.0% 3,283 10,730 10,619 12/31/2018 2011 PROPERTY DETAIL (CONTINUED) DETAIL PROPERTY 1185, 1249 & 1387 S. Vinnell Way Boise, ID 3 181 100.0% 4,697 33,351 28,076 9/11/2012 2002 2020 S. Arlington Heights Arlington Heights, IL 1 58 100.0% 2,050 15,482 12,198 12/29/2009 2002 400 South Jefferson Street Chicago, IL 1 248 100.0% 10,253 39,806 39,525 12/31/2018 2012 475 Bond Street Lincolnshire, IL 1 223 100.0% 1,667 5,489 5,481 12/31/2018 2000 1415 West Diehl Road Naperville, IL 1 820 77.9% 14,234 33,619 33,311 12/31/2018 2001 440 North Fairway Drive Vernon Hills, IL 1 100 100.0% 1,842 4,945 4,938 12/31/2018 2009 7601 and 7635 Interactive Way Indianapolis, IN 2 275 100.0% 4,603 17,999 17,810 12/31/2018 2008 Intech Park Indianapolis, IN 3 434 82.9% 8,524 78,751 64,228 10/14/2011 2008 The Atrium at Circleport II Erlanger, KY 1 86 100.0% 1,259 3,758 3,718 12/31/2018 1999 7125 Industrial Road Florence, KY 1 168 100.0% 2,584 13,571 11,653 12/31/2012 2002 251 Causeway Street Boston, MA 1 141 95.7% 4,414 25,180 20,800 8/17/2010 1988 300 and 330 Billerica Road Chelmsford, MA 2 209 —% — 4,864 4,863 12/31/2018 2006 75 Pleasant Street Malden, MA 1 126 100.0% 4,972 32,821 25,720 5/24/2010 2008 25 Newport Avenue Quincy, MA 1 93 100.0% 2,114 13,728 11,487 2/16/2011 2009 One Montvale Avenue Stoneham, MA 1 98 93.9% 2,548 15,063 12,171 6/16/2010 1987 314 Littleton Road Westford, MA 1 175 100.0% 3,801 14,331 14,212 12/31/2018 2013 Annapolis Commerce Center Annapolis, MD 2 101 100.0% 2,461 12,075 11,678 10/2/2017 1990 4201 Patterson Avenue Baltimore, MD 1 85 100.0% 1,270 12,975 7,794 10/15/1998 2014 7001 Columbia Gateway Drive Columbia, MD 1 120 100.0% 4,059 16,128 15,974 12/31/2018 2008 Hillside Center Columbia, MD 2 87 93.1% 1,822 8,194 7,995 10/2/2017 2014 TenThreeTwenty Columbia, MD 1 140 97.9% 3,915 20,911 20,064 10/2/2017 2013 See notes on page 42. Office Properties Income Trust 39 Supplemental Operating and Financial Data, June 30, 2019
EXHIBIT E PROPERTY DETAIL (CONTINUED) (1) As of June 30, 2019 (dollars and square feet in thousands) Annualized Year Built or No. of Rentable Rental Undepreciated Depreciated Date Most Recent Property City, State Properties Sq. Ft. % Leased Income (2) Carrying Value (3) Carrying Value (3) Acquired (4) Renovation 3300 75th Avenue Landover, MD 1 266 100.0% 5,323 41,827 33,030 2/26/2010 2004 1401 Rockville Pike Rockville, MD 1 190 94.2% 4,688 49,154 28,860 2/2/1998 2015 2115 East Jefferson Street Rockville, MD 1 129 84.5% 3,059 14,886 13,218 8/27/2013 2003 Redland 520/530 Rockville, MD 3 352 92.9% 11,869 75,636 72,898 10/2/2017 2017 Redland 540 Rockville, MD 1 131 85.5% 3,733 34,414 33,121 10/2/2017 2017 Rutherford Business Park Windsor Mill, MD 1 80 100.0% 1,981 12,270 10,572 11/16/2012 2011 Meadows Business Park Woodlawn, MD 2 183 91.8% 3,546 27,546 22,436 2/15/2011 1997 3550 Green Court Ann Arbor, MI 1 82 100.0% 1,721 8,555 8,483 12/31/2018 1998 11411 E. Jefferson Avenue Detroit, MI 1 56 100.0% 2,700 19,070 14,904 4/23/2010 2009 Rosedale Corporate Plaza Roseville, MN 1 61 100.0% 1,126 8,243 4,627 12/1/1999 1987 1300 Summit Street Kansas City, MO 1 87 100.0% 2,384 15,845 13,678 9/27/2012 1998 2555 Grand Boulevard Kansas City, MO 1 596 100.0% 18,860 47,396 46,766 12/31/2018 2003 PROPERTY DETAIL (CONTINUED) DETAIL PROPERTY 4241-4300 NE 34th Street Kansas City, MO 1 98 100.0% 1,872 11,762 7,409 3/31/1997 1996 1220 Echelon Parkway Jackson, MS 1 110 100.0% 3,977 26,156 21,726 7/25/2012 2009 2300 and 2400 Yorkmont Road Charlotte, NC 2 284 100.0% 6,619 21,872 21,605 12/31/2018 1995 18010 and 18020 Burt Street Omaha, NE 2 203 100.0% 4,215 19,631 19,457 12/31/2018 2012 500 Charles Ewing Boulevard Ewing, NJ 1 250 100.0% 6,018 31,054 30,691 12/31/2018 2012 299 Jefferson Road Parsippany, NJ 1 151 100.0% 4,053 7,516 7,476 12/31/2018 2011 One Jefferson Road Parsippany, NJ 1 100 100.0% 4,362 9,741 9,670 12/31/2018 2009 50 West State Street Trenton, NJ 1 267 84.3% 6,656 46,521 37,933 12/30/2010 1989 Airline Corporate Center Colonie, NY 1 64 100.0% 1,107 7,596 6,443 6/22/2012 2004 5000 Corporate Court Holtsville, NY 1 264 86.0% 6,165 27,816 23,682 8/31/2011 2000 8687 Carling Road Liverpool, NY 1 38 100.0% 856 571 571 12/31/2018 2007 1212 Pittsford - Victor Road Pittsford, NY 1 55 100.0% 1,057 692 691 12/31/2018 2003 500 Canal View Boulevard Rochester, NY 1 95 17.9% 343 2,461 2,454 12/31/2018 1997 2231 Schrock Road Columbus, OH 1 42 100.0% 765 1,011 1,008 12/31/2018 1999 4600 25th Avenue Salem, OR 1 233 86.7% 4,719 30,150 24,786 12/20/2011 2007 8800 Tinicum Boulevard Philadelphia, PA 1 441 100.0% 6,897 28,483 28,166 12/31/2018 2000 Synergy Business Park Columbia, SC 3 181 95.6% 2,322 17,797 13,118 5/10/2006;9/17/2010 1985 9680 Old Bailes Road Fort Mill, SC 1 60 100.0% 793 3,808 3,766 12/31/2018 2007 One Memphis Place Memphis, TN 1 205 73.7% 3,027 12,658 9,932 9/17/2010 1985 16001 North Dallas Parkway Addison, TX 2 554 100.0% 15,138 74,353 73,412 12/31/2018 1996 Research Park Austin, TX 2 149 100.0% 3,266 18,474 18,088 12/31/2018 1999 1001 Noble Energy Way Houston, TX 1 497 100.0% 14,149 34,717 34,310 12/31/2018 2013 See notes on page 42. Office Properties Income Trust 40 Supplemental Operating and Financial Data, June 30, 2019
EXHIBIT E PROPERTY DETAIL (CONTINUED) (1) As of June 30, 2019 (dollars and square feet in thousands) Annualized Year Built or No. of Rentable Rental Undepreciated Depreciated Date Most Recent Property City, State Properties Sq. Ft. % Leased Income (2) Carrying Value (3) Carrying Value (3) Acquired (4) Renovation 10451 Clay Road Houston, TX 1 97 100.0% 2,257 15,873 15,730 12/31/2018 2013 202 North Castlegory Road Houston, TX 1 84 100.0% 2,883 5,934 5,868 12/31/2018 2016 6380 Rogerdale Road Houston, TX 1 206 100.0% 5,854 18,889 18,804 12/31/2018 2006 4221 W. John Carpenter Freeway Irving, TX 1 54 100.0% 857 3,808 3,745 12/31/2018 1995 8675,8701-8711 Freeport Pkwy and 8901 Esters Boulevard Irving, TX 3 458 100.0% 6,270 42,081 41,640 12/31/2018 1990 1511 East Common Street New Braunfels, TX 1 63 100.0% 1,092 6,329 6,312 12/31/2018 2005 2900 West Plano Parkway Plano, TX 1 191 100.0% 1,475 15,774 15,651 12/31/2018 1998 3400 West Plano Parkway Plano, TX 1 235 100.0% 1,542 20,989 20,765 12/31/2018 1994 19100 Ridgewood Parkway San Antonio, TX 1 618 100.0% 14,141 148,205 146,210 12/31/2018 2008 3600 Wiseman Boulevard San Antonio, TX 1 100 100.0% 3,399 10,236 10,138 12/31/2018 2004 701 Clay Road Waco, TX 1 139 100.0% 3,481 14,709 9,524 12/23/1997 1997 1800 Novell Place Provo, UT 1 406 100.0% 8,710 51,377 50,722 12/31/2018 2000 4885-4931 North 300 West Provo, UT 2 125 100.0% 3,916 13,450 13,311 12/31/2018 2009 PROPERTY DETAIL (CONTINUED) DETAIL PROPERTY 14660, 14672 & 14668 Lee Road Chantilly, VA 3 409 98.8% 13,673 83,663 78,848 12/22/2016 2006 1434 Crossways Chesapeake, VA 2 214 100.0% 4,075 25,028 23,735 10/2/2017 2002 Greenbrier Towers Chesapeake, VA 2 172 86.6% 3,101 15,532 14,761 10/2/2017 1987 Enterchange at Meadowville Chester, VA 1 228 40.4% 644 11,370 9,937 8/28/2013 2011 3920 Pender Drive Fairfax, VA 1 83 100.0% 2,447 16,342 14,636 3/21/2014 2011 Pender Business Park Fairfax, VA 4 171 83.6% 3,415 24,597 21,393 11/4/2013 2000 Three Flint Hill Fairfax, VA 1 184 75.0% 4,411 33,168 31,606 10/2/2017 2011 7987 Ashton Avenue Manassas, VA 1 69 100.0% 1,654 10,482 9,905 1/3/2017 1989 Two Commercial Place Norfolk, VA 1 289 100.0% 5,925 26,220 25,938 12/31/2018 2016 1759 & 1760 Business Center Drive Reston, VA 2 406 100.0% 12,436 90,472 80,141 5/28/2014 1996 1775 Wiehle Avenue Reston, VA 1 130 63.1% 3,237 31,097 29,911 10/2/2017 2001 501 South 5th Street Richmond, VA 1 311 100.0% 12,842 54,308 53,737 12/31/2018 2009 9201 Forest Hill Avenue Richmond, VA 1 50 100.0% 1,232 1,795 1,790 12/31/2018 1985 9960 Mayland Drive Richmond, VA 1 174 98.9% 3,578 20,435 18,127 5/20/2014 1994 Parham Place Richmond, VA 3 89 100.0% 1,631 2,041 2,026 12/31/2018 2014 1751 Blue Hills Drive Roanoke, VA 1 399 100.0% 1,949 10,533 10,424 12/31/2018 2003 Aquia Commerce Center Stafford, VA 2 65 100.0% 1,858 10,323 8,652 6/22/2011 1999 Atlantic Corporate Park Sterling, VA 2 221 99.5% 6,073 35,253 33,943 10/2/2017 2008 Orbital Sciences Campus Sterling, VA 3 337 100.0% 11,346 31,845 31,558 12/31/2018 2001 Sterling Business Park Lots 8 and 9 Sterling, VA 1 167 100.0% 5,445 53,552 51,613 10/2/2017 2016 65 Bowdoin Street S. Burlington, VT 1 27 100.0% 1,129 9,256 7,275 4/9/2010 2009 See notes on page 42. Office Properties Income Trust 41 Supplemental Operating and Financial Data, June 30, 2019
EXHIBIT E PROPERTY DETAIL (CONTINUED) (1) As of June 30, 2019 (dollars and square feet in thousands) Annualized Year Built or No. of Rentable Rental Undepreciated Depreciated Date Most Recent Property City, State Properties Sq. Ft. % Leased Income (2) Carrying Value (3) Carrying Value (3) Acquired (4) Renovation 840 North Broadway Everett, WA 2 112 100.0% 2,665 20,917 17,513 6/28/2012 1990 Stevens Center Richland, WA 2 140 100.0% 2,973 25,455 15,206 3/31/1997 1995 351, 401, 501 Elliott Ave West Seattle, WA 3 300 100.0% 14,450 77,661 76,944 12/31/2018 2000 11050 West Liberty Drive Milwaukee, WI 1 29 100.0% 803 5,587 4,647 6/9/2011 2006 882 TJ Jackson Drive Falling Waters, WV 1 40 —% — 5,062 2,795 3/31/1997 1993 5353 Yellowstone Road Cheyenne, WY 1 106 100.0% 2,170 11,145 6,369 3/31/1997 1995 Total 200 27,622 644,747 3,816,394 3,422,334 Held for Sale: (4) 9174 Sky Park Centre San Diego, CA 1 44 95.5% 1,200 8,923 5,441 6/24/2002 1,986 10-12 Celina Avenue Nashua, NH 1 322 100.0% 2,462 18,654 15,098 8/31/2009 1997 PROPERTY DETAIL (CONTINUED) DETAIL PROPERTY 400 State Street Kansas City, KS 1 171 91.2% 2,971 15,980 12,322 6/16/2010 1971 4181 Ruffin Road San Diego, CA 1 148 83.1% 3,037 20,867 16,670 7/16/2010 2013 501 Ridge Avenue Hanover, PA 1 502 —% — 5,622 5,585 12/31/2018 1965 Bayside Technology Park Fremont, CA 1 101 100.0% 2,325 16,889 16,875 12/31/2018 1990 Capitol Tower Topeka, KS 1 144 100.0% 2,704 5,901 5,845 12/31/2018 2006 2090 Fortune Drive San Jose, CA 1 72 100.0% 1,261 10,425 10,425 12/31/2018 2014 2115-2116 East Randol Mill Road Arlington, TX 1 183 100.0% 1,062 9,758 9,670 12/31/2018 1989 9 1,687 17,022 113,019 97,931 Grand Total 209 29,309 91.6% $ 661,769 $ 3,929,413 $ 3,520,265 (1) Excludes three properties 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 June 30, 2019, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. (3) Carrying values exclude intangible and other assets. (4) 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. Office Properties Income Trust 42 Supplemental Operating and Financial Data, June 30, 2019
WARNING CONCERNING FORWARD-LOOKING STATEMENTS This supplemental operating and financial package may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. 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. Actual results may differ materially from those contained in or implied by our forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. The information contained in our filings with the SEC, including under “Risk Factors” in our periodic reports, or incorporated therein, identifies important factors that could cause our actual results to differ materially from those stated in or implied by 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 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. WARNING CONCERNING FORWARD-LOOKING STATEMENTS CONCERNING FORWARD-LOOKING WARNING Office Properties Income Trust 43 Supplemental Operating and Financial Data, June 30, 2019
