1
7958 South Chester Street, Centennial, CO
Square Feet: 167,917
United Launch Alliance Corporate Headquarters
All amounts in this report are unaudited.
Fourth Quarter 2016
Supplemental Operating and Financial Data
Select Income REIT
45101 Warp Drive, Sterling, VA
Square Feet: 337,228
Orbital ATK (NYSE: OA) Corporate Headquarters
Exhibit 99.2
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 2
TABLE OF CONTENT
S
PAGE/EXHIBIT
CORPORATE INFORMATION
Company Profile 7
Investor Information 8
Research Coverage 9
FINANCIALS
Key Financial Data 11
Consolidated Balance Sheets 12
Consolidated Statements of Income 13
Consolidated Statements of Cash Flows 14
Debt Summary 16
Debt Maturity Schedule 17
Leverage Ratios, Coverage Ratios and Public Debt Covenants 18
Capital Expenditures Summary 19
Property Acquisitions and Dispositions Information Since 1/1/16 20
Calculation of Property Net Operating Income (NOI) and Cash Basis NOI 21
Reconciliation of NOI to Same Property NOI and Calculation of Same Property Cash Basis NOI 22
Calculation of EBITDA and Adjusted EBITDA 23
Calculation of Funds from Operations (FFO) Attributed to SIR and Normalized FFO Attributed to SIR 24
Definitions of Certain Non-GAAP Financial Measures 25
PORTFOLIO INFORMATION
Portfolio Summary by Property Type 27
Same Property Results of Operations 28
Leasing Summary 30
Occupancy and Leasing Analysis by Property Type 31
Tenant Diversity and Credit Characteristics 32
Tenants Representing 1% or More of Total Annualized Rental Revenue 33
Three Year Lease Expiration Schedule by Property Type 34
Portfolio Lease Expiration Schedule 35
Hawaii Land Rent Reset Summary 36
EXHIBIT
Property Detail A
TABLE OF CONTENTS
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 3
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THIS PRESENTATION OF SUPPLEMENTAL OPERATING AND FINANCIAL DATA CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”,
“INTEND”, “PLAN”, “ESTIMATE”, “WILL”, “MAY” AND NEGATIVES OR DERIVATIVES OF THESE OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE
FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO
OCCUR AND MAY NOT OCCUR. FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:
• THE LIKELIHOOD THAT OUR TENANTS WILL PAY RENT OR BE NEGATIVELY AFFECTED BY CYCLICAL ECONOMIC CONDITIONS,
• THE LIKELIHOOD THAT OUR TENANTS WILL RENEW OR EXTEND THEIR LEASES OR THAT WE WILL BE ABLE TO OBTAIN REPLACEMENT TENANTS,
• OUR ACQUISITIONS OF PROPERTIES,
• OUR SALES OF PROPERTIES,
• OUR ABILITY TO COMPETE FOR ACQUISITIONS AND TENANCIES EFFECTIVELY,
• THE LIKELIHOOD THAT OUR RENTS MAY INCREASE WHEN RENTS ARE RESET AT OUR LEASED LANDS IN HAWAII,
• OUR ABILITY TO PAY DISTRIBUTIONS TO OUR SHAREHOLDERS AND THE AMOUNT OF SUCH DISTRIBUTIONS,
• THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY,
• OUR POLICIES AND PLANS REGARDING INVESTMENTS, FINANCINGS AND DISPOSITIONS,
• OUR ABILITY TO RAISE EQUITY OR DEBT CAPITAL,
• OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,
• OUR ABILITY TO APPROPRIATELY BALANCE OUR USE OF DEBT AND EQUITY CAPITAL,
• OUR CREDIT RATINGS,
• OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF THE RMR GROUP INC., OR RMR INC.,
• OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF AFFILIATES INSURANCE COMPANY, OR AIC, AND FROM OUR PARTICIPATION IN INSURANCE PROGRAMS
ARRANGED BY AIC,
• OUR QUALIFICATION FOR TAXATION AS A REAL ESTATE INVESTMENT TRUST, OR REIT,
• THE CREDIT QUALITIES OF OUR TENANTS, AND
• OTHER MATTERS.
OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS.
FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FORWARD LOOKING STATEMENTS AND UPON OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL
CONDITION, FUNDS FROM OPERATIONS, OR FFO, ATTRIBUTED TO SELECT INCOME REIT, OR SIR, NORMALIZED FUNDS FROM OPERATIONS, OR NORMALIZED FFO, ATTRIBUTED TO
SIR, NET OPERATING INCOME, OR NOI, CASH BASIS NOI, EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION, OR EBITDA, EBITDA AS ADJUSTED, OR
ADJUSTED EBITDA, CASH FLOWS, LIQUIDITY AND PROSPECTS INCLUDE, BUT ARE NOT LIMITED TO:
• THE IMPACT OF CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR TENANTS,
• COMPETITION WITHIN THE REAL ESTATE INDUSTRY, PARTICULARLY IN THOSE MARKETS IN WHICH OUR PROPERTIES ARE LOCATED,
• COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS,
• LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY FOR TAXATION AS A REIT FOR U.S. FEDERAL INCOME
TAX PURPOSES,
• ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR RELATED PARTIES, INCLUDING OUR MANAGING TRUSTEES, THE RMR GROUP LLC, OR RMR LLC, RMR INC.,
GOVERNMENT PROPERTIES INCOME TRUST, OR GOV, SENIOR HOUSING PROPERTIES TRUST, OR SNH, AIC, AND OTHERS AFFILIATED WITH THEM, AND
WARNING CONCERNING FORWARD LOOKING STATEMENTS
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 4
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• ACTS OF TERRORISM, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND OUR CONTROL.
FOR EXAMPLE:
• OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON OUR INDEBTEDNESS DEPENDS UPON A
NUMBER OF FACTORS, INCLUDING OUR FUTURE EARNINGS AND THE CAPITAL COSTS WE INCUR TO LEASE OUR PROPERTIES AND OUR WORKING CAPITAL REQUIREMENTS. WE
MAY BE UNABLE TO PAY OUR DEBT OBLIGATIONS OR TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS ON OUR COMMON SHARES AND FUTURE DISTRIBUTIONS MAY BE
REDUCED OR ELIMINATED,
• OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES AND LEASE THEM FOR RENTS,
LESS PROPERTY OPERATING COSTS, THAT EXCEED OUR CAPITAL COSTS. WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE OR TO NEGOTIATE
ACCEPTABLE PURCHASE PRICES, ACQUISITION FINANCING OR LEASE TERMS FOR NEW PROPERTIES,
• CONTINGENCIES IN OUR ACQUISITION AND SALE AGREEMENTS MAY NOT BE SATISFIED AND OUR PENDING ACQUISITIONS AND SALES MAY NOT OCCUR, MAY BE DELAYED OR
THE TERMS OF SUCH TRANSACTIONS MAY CHANGE,
• RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE BECAUSE OF CHANGING MARKET CONDITIONS OR OTHERWISE,
• A SIGNIFICANT NUMBER OF OUR HAWAII PROPERTIES ARE LANDS LEASED FOR RENTS THAT ARE PERIODICALLY RESET BASED ON THEN CURRENT FAIR MARKET VALUES.
REVENUES FROM OUR PROPERTIES IN HAWAII HAVE GENERALLY INCREASED DURING OUR OWNERSHIP AS THE LEASES FOR THOSE PROPERTIES HAVE BEEN RESET OR
RENEWED. THERE CAN BE NO ASSURANCE THAT REVENUES FROM OUR HAWAII PROPERTIES WILL INCREASE AS A RESULT OF FUTURE RENT RESETS OR LEASE RENEWALS,
AND FUTURE RENTS FROM THESE PROPERTIES COULD DECREASE OR NOT INCREASE TO THE EXTENT THEY HAVE IN THE PAST,
• WE MAY NOT SUCCEED IN FURTHER DIVERSIFYING OUR REVENUE SOURCES AND ANY DIVERSIFICATION WE MAY ACHIEVE MAY NOT MITIGATE OUR PORTFOLIO RISKS OR
IMPROVE THE SECURITY OF OUR REVENUES OR OUR OPERATING PERFORMANCE,
• OUR POSSIBLE REDEVELOPMENT OF CERTAIN OF OUR HAWAII PROPERTIES MAY NOT BE REALIZED OR BE SUCCESSFUL,
• THE UNEMPLOYMENT RATE OR ECONOMIC CONDITIONS IN AREAS WHERE OUR PROPERTIES ARE LOCATED MAY BECOME WORSE IN THE FUTURE. SUCH CIRCUMSTANCES OR
OTHER CONDITIONS MAY REDUCE DEMAND FOR LEASING OFFICE AND INDUSTRIAL SPACE. IF THE DEMAND FOR LEASING OFFICE AND INDUSTRIAL SPACE IS REDUCED, WE
MAY BE UNABLE TO RENEW LEASES WITH OUR TENANTS AS LEASES EXPIRE OR ENTER INTO NEW LEASES AT RENTAL RATES AS HIGH AS EXPIRING RATES, AND OUR FINANCIAL
RESULTS MAY DECLINE,
• OUR BELIEF THAT THERE IS A LIKELIHOOD THAT TENANTS MAY RENEW OR EXTEND OUR LEASES WHEN THEY EXPIRE WHENEVER THEY HAVE MADE SIGNIFICANT
INVESTMENTS IN THE LEASED PROPERTIES, OR BECAUSE THOSE PROPERTIES MAY BE OF STRATEGIC IMPORTANCE TO THEM, MAY NOT BE REALIZED,
• SOME OF OUR TENANTS MAY NOT RENEW EXPIRING LEASES, AND WE MAY BE UNABLE TO OBTAIN NEW TENANTS TO MAINTAIN OR INCREASE THE HISTORICAL OCCUPANCY
RATES OF, OR RENTS FROM, OUR PROPERTIES,
• WE MAY INCUR SIGNIFICANT COSTS TO PREPARE A PROPERTY FOR A TENANT, PARTICULARLY FOR SINGLE TENANT PROPERTIES,
• CONTINUED AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND OTHER
CUSTOMARY CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO SATISFY,
• ACTUAL COSTS UNDER OUR REVOLVING CREDIT FACILITY OR OTHER FLOATING RATE CREDIT FACILITIES WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF OTHER
FEES AND EXPENSES ASSOCIATED WITH SUCH FACILITIES,
• WE MAY BE UNABLE TO REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE,
• THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOAN MAY BE INCREASED TO UP TO $2.2 BILLION ON A COMBINED BASIS IN
CERTAIN CIRCUMSTANCES; HOWEVER, INCREASING THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOAN IS SUBJECT TO OUR
OBTAINING ADDITIONAL COMMITMENTS FROM LENDERS, WHICH MAY NOT OCCUR,
WARNING CONCERNING FORWARD LOOKING STATEMENTS (CONTINUED)
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 5
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)
• WE HAVE THE OPTION TO EXTEND THE MATURITY DATE OF OUR REVOLVING CREDIT FACILITY UPON PAYMENT OF A FEE AND MEETING OTHER CONDITIONS. HOWEVER, THE
APPLICABLE CONDITIONS MAY NOT BE MET,
• WE RECEIVED AN ASSESSMENT FROM THE STATE OF WASHINGTON FOR REAL ESTATE EXCISE TAX, INTEREST AND PENALTIES OF $2.8 MILLION ON CERTAIN PROPERTIES WE
ACQUIRED IN CONNECTION WITH OUR ACQUISITION OF COLE CORPORATE INCOME TRUST, INC. IN JANUARY 2015. ALTHOUGH WE BELIEVE WE ARE NOT LIABLE FOR THIS TAX AND
ARE DISPUTING THIS ASSESSMENT, WE MAY NOT SUCCEED IN HAVING ALL OR ANY PART OF THIS ASSESSMENT NULLIFIED,
• THE BUSINESS MANAGEMENT AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN US AND RMR LLC HAVE CONTINUING 20 YEAR TERMS. HOWEVER, THOSE AGREEMENTS
INCLUDE TERMS WHICH PERMIT EARLY TERMINATION IN CERTAIN CIRCUMSTANCES. ACCORDINGLY, WE CANNOT BE SURE THAT THESE AGREEMENTS WILL REMAIN IN EFFECT FOR
CONTINUING 20 YEAR TERMS OR FOR SHORTER TERMS,
• WE BELIEVE THAT OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING RMR LLC, RMR INC., GOV, SNH, AIC AND OTHERS AFFILIATED WITH THEM MAY BENEFIT US AND
PROVIDE US WITH COMPETITIVE ADVANTAGES IN OPERATING AND GROWING OUR BUSINESS. HOWEVER, THE ADVANTAGES WE BELIEVE WE MAY REALIZE FROM THESE
RELATIONSHIPS MAY NOT MATERIALIZE, AND
• THE PREMIUMS USED TO DETERMINE THE INTEREST RATE PAYABLE ON OUR REVOLVING CREDIT FACILITY AND TERM LOAN AND THE FACILITY FEE PAYABLE ON OUR REVOLVING
CREDIT FACILITY ARE BASED ON OUR CREDIT RATINGS. FUTURE CHANGES IN OUR CREDIT RATINGS MAY CAUSE THE INTEREST AND FEES WE PAY TO INCREASE.
CURRENTLY UNEXPECTED RESULTS COULD OCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH ARE BEYOND OUR CONTROL, SUCH AS ACTS OF TERRORISM,
NATURAL DISASTERS, CHANGES IN OUR TENANTS’ FINANCIAL CONDITIONS, THE MARKET DEMAND FOR LEASED SPACE OR CHANGES IN CAPITAL MARKETS OR THE ECONOMY
GENERALLY.
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION "RISK FACTORS" IN OUR PERIODIC
REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING STATEMENTS. OUR FILINGS
WITH THE SEC ARE AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV. YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS. EXCEPT AS
REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
WARNING CONCERNING FORWARD LOOKING STATEMENTS (CONTINUED)
6
CORPORATE INFORMATION
6
350 Spectrum Loop, Colorado Springs, CO
Square Feet: 155,808
FedEx Corporation (NYSE: FDX) Rocky Mountain Tech Center
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 7
COM
PAN
Y PROFIL
E
Corporate Headquarters:
Two Newton Place
255 Washington Street, Suite 300
Newton, MA 02458-1634
(t) (617) 796-8303
(f) (617) 796-8335
Stock Exchange Listing:
Nasdaq
Trading Symbol:
Common Shares: SIR
Issuer Ratings:
Moody’s: Baa2
Standard & Poor’s: BBB-
The Company:
Select Income REIT, or SIR, we, our or us, is a real estate investment trust, or REIT, which owns properties that are
primarily net leased to single tenants. As of December 31, 2016, we owned 121 properties (362 buildings, leasable land
parcels and easements) with approximately 44.8 million rentable square feet located in 35 states, including 11 properties
(229 buildings, leasable land parcels and easements) with approximately 17.8 million square feet which are primarily
leasable industrial and commercial lands located in Hawaii. We have been investment grade rated since 2014, and we
are included in the Russell 2000® Index and the MSCI US REIT Index.
COMPANY PROFILE
Management:
SIR is managed by The RMR Group LLC, the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR). RMR is an
alternative asset management company that was founded in 1986 to manage real estate companies and related
businesses. RMR primarily provides management services to four publicly owned real estate investment trusts, or REITs,
and three real estate related operating businesses. In addition to managing SIR, RMR manages Hospitality Properties
Trust, a REIT that owns hotels and travel centers, Senior Housing Properties Trust, a REIT that primarily owns healthcare,
senior living and medical office buildings, and Government Properties Income Trust, a REIT that primarily owns properties
leased to the U.S. and state governments. RMR also provides management services to TravelCenters of America LLC,
a publicly traded operator of travel centers along the U.S. Interstate Highway System, convenience stores and restaurants,
Five Star Quality Care, Inc., a publicly traded operator of senior living communities, and Sonesta International Hotels
Corporation, a privately owned franchisor and operator of hotels and cruise ships. RMR also manages publicly traded
securities of real estate companies and private commercial real estate debt funds through wholly owned SEC registered
investment advisory subsidiaries. As of December 31, 2016, RMR had $27.2 billion of real estate assets under
management and the combined RMR managed companies had approximately $11 billion of annual revenues, over 1,400
properties and more than 53,000 employees. We believe that being managed by RMR is a competitive advantage for
SIR because of RMR’s depth of management and experience in the real estate industry. We also believe RMR provides
management services to us at costs that are lower than we would have to pay for similar quality services.
(1) See page 24 for the calculations of FFO attributed to SIR and Normalized FFO attributed to SIR and a reconciliation of net income attributed to SIR, determined in accordance with U.S.
generally accepted accounting principles, or GAAP, to those amounts.
Key Data (as of 12/31/2016):
(dollars and sq. ft. in 000s)
Total properties 121
Total sq. ft. 44,813
Percent leased 96.8%
Q4 2016 total revenue $ 114,835
Q4 2016 net income attributed to SIR $ 24,222
Q4 2016 Normalized FFO attributed
to SIR (1) $ 63,463
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 8
INVES
TOR INFORM
ATIO
N
INVESTOR INFORMATION
Board of Trustees
Donna D. Fraiche William A. Lamkin Jeffrey P. Somers
Independent Trustee Independent Trustee Independent Trustee
Adam D. Portnoy Barry M. Portnoy
Managing Trustee Managing Trustee
Senior Management
David M. Blackman John C. Popeo
President and Chief Operating Officer Chief Financial Officer and Treasurer
Contact Information
Investor Relations Inquiries
Select Income REIT Financial inquiries should be directed to John C. Popeo,
Two Newton Place Chief Financial Officer and Treasurer, at (617) 796-8303
255 Washington Street, Suite 300 or jpopeo@sirreit.com.
Newton, MA 02458-1634
(t) (617) 796-8303 Investor and media inquiries should be directed to
(f) (617) 796-8335 Christopher Ranjitkar, Director, Investor Relations,
(e-mail) info@sirreit.com at (617) 796-8320 or cranjitkar@sirreit.com.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 9
RESEARCH COVERAG
E
RESEARCH COVERAGE
Equity Research Coverage
Bank of America / Merrill Lynch
James Feldman
(646) 855-5808
james.feldman@baml.com
FBR Capital Markets & Co.
Bryan Maher
(646) 885-5423
bmaher@fbr.com
JMP Securities
Mitch Germain
(212) 906-3546
mgermain@jmpsecurities.com
Morgan Stanley
Vikram Malhotra
(212) 761-7064
vikram.malhotra@morganstanley.com
RBC Capital Markets
Michael Carroll
(440) 715-2649
michael.carroll@rbccm.com
SIR 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 SIR’s performance made by these analysts or agencies do not represent opinions,
forecasts or predictions of SIR or its management. SIR 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.
Rating Agencies
Moody’s Investors Service
Griselda Bisono
(212) 553-4985
griselda.bisono@moodys.com
Standard & Poor’s
Michael Souers
(212) 438-2508
michael.souers@standardandpoors.com
10
FINANCIALS
10
351, 401, 501 Elliott Ave West, Seattle, WA
Square Feet: 299,643
F5 Networks (Nasdaq: FFIV) Corporate Headquarters
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 11
KE
Y FINANCIA
L D
AT
A KEY FINANCIAL DATA
(dollars in thousands, except per share data)
As of and For the Three Months Ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Selected Balance Sheet Data:
Total gross assets (1) $ 4,882,310 $ 4,880,238 $ 4,853,401 $ 4,876,990 $ 4,849,124
Total assets $ 4,639,682 $ 4,657,256 $ 4,649,793 $ 4,692,810 $ 4,684,345
Total liabilities $ 2,565,720 $ 2,565,322 $ 2,553,157 $ 2,591,733 $ 2,587,385
Total shareholders' equity $ 2,073,962 $ 2,091,934 $ 2,096,636 $ 2,101,077 $ 2,096,960
Selected Income Statement Data:
Total revenues $ 114,835 $ 115,036 $ 114,904 $ 117,232 $ 114,794
Net income $ 24,222 $ 28,568 $ 30,752 $ 32,812 $ 10,917
Net income attributed to SIR (2) $ 24,222 $ 28,568 $ 30,752 $ 32,779 $ 10,876
NOI (3) $ 90,551 $ 89,887 $ 91,747 $ 93,986 $ 92,749
Adjusted EBITDA (4) $ 84,444 $ 83,322 $ 85,472 $ 87,359 $ 88,150
FFO (5) $ 63,228 $ 61,934 $ 64,157 $ 66,204 $ 43,526
Normalized FFO attributed to SIR (5) $ 63,463 $ 61,947 $ 64,157 $ 66,262 $ 67,510
Per Share Data:
Net income attributed to SIR - basic and diluted $ 0.27 $ 0.32 $ 0.34 $ 0.37 $ 0.12
FFO attributed to SIR - basic and diluted (5) $ 0.71 $ 0.69 $ 0.72 $ 0.74 $ 0.49
Normalized FFO attributed to SIR - basic and diluted (5) $ 0.71 $ 0.69 $ 0.72 $ 0.74 $ 0.76
Dividends:
Annualized dividends paid per share (6) $ 2.04 $ 2.04 $ 2.00 $ 2.00 $ 2.00
Annualized dividend yield (at end of period) (6) 8.1% 7.6% 7.7% 8.7% 10.1%
Normalized FFO payout ratio (5) (6) 71.8% 73.9% 69.4% 67.6% 65.8%
(1) Total gross assets is total assets plus accumulated depreciation.
(2) Excludes an 11% non-controlling interest of a third party in one property. In February 2016, we purchased this 11% interest and the non-controlling interest was then eliminated as a result.
(3) See page 21 for the calculation of NOI and a reconciliation of that amount to net income determined in accordance with GAAP.
(4) See page 23 for the calculation of Adjusted EBITDA and a reconciliation of net income determined in accordance with GAAP to that amount.
(5) See page 24 for the calculation of FFO attributed to SIR and Normalized FFO attributed to SIR and a reconciliation of net income attributed to SIR determined in accordance with GAAP to those amounts.
(6) Annualized dividends paid per share for the three months ended December 31, 2015 excludes a $0.21 per common share non-cash distribution of RMR common stock to our shareholders on December
14, 2015.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 12
CONSOLID
ATED BALANCE SHEET
S
CONSOLIDATED BALANCE SHEETS
December 31,
2016 2015
ASSETS
Real estate properties:
Land $ 1,038,686 $ 1,036,425
Buildings and improvements 3,103,734 3,083,243
4,142,420 4,119,668
Accumulated depreciation (242,628) (164,779)
3,899,792 3,954,889
Acquired real estate leases, net 506,298 566,195
Cash and cash equivalents 22,127 17,876
Restricted cash 44 1,171
Rents receivable, including straight line rents of $117,008 and $92,264, respectively, net of
allowance for doubtful accounts of $873 and $464, respectively 124,089 99,307
Deferred leasing costs, net 10,051 7,221
Other assets, net 77,281 37,686
Total assets $ 4,639,682 $ 4,684,345
LIABILITIES AND SHAREHOLDERS' EQUITY
Unsecured revolving credit facility $ 327,000 $ 303,000
Unsecured term loan, net 348,373 347,876
Senior unsecured notes, net 1,430,300 1,426,025
Mortgage notes payable, net 245,643 286,706
Accounts payable and other liabilities 101,605 105,403
Assumed real estate lease obligations, net 77,622 86,495
Rents collected in advance 18,815 16,295
Security deposits 11,887 11,845
Due to related persons 4,475 3,740
Total liabilities 2,565,720 2,587,385
Commitments and contingencies
Shareholders' equity:
Common shares of beneficial interest, $.01 par value: 125,000,000 shares authorized;
89,427,869 and 89,374,029 shares issued and outstanding, respectively 894 894
Additional paid in capital 2,179,669 2,178,477
Cumulative net income 441,307 324,986
Cumulative other comprehensive income (loss) 20,472 (19,587)
Cumulative common distributions (568,380) (387,810)
Total shareholders' equity 2,073,962 2,096,960
Total liabilities and shareholders' equity $ 4,639,682 $ 4,684,345
(dollars in thousands, except per share data)
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 13
CONSOLID
ATED S
TA
TEMENTS OF INCOM
E
CONSOLIDATED STATEMENTS OF INCOME
(dollar and share amounts in thousands, except per share data)
(1) We report rental income on a straight line basis over the terms of the respective leases; accordingly, rental income includes non-cash straight line rent adjustments. Rental income also includes non-cash amortization of intangible
lease assets and liabilities and lease termination fees, if any.
(2) We recorded a liability for the amount by which the estimated fair value for accounting purposes exceeded the price we paid for our investment in RMR common stock in June 2015. This liability is being amortized on a straight line
basis through December 31, 2035 as an allocated reduction to business management fees and property management fees, which are included in general and administrative and other operating expenses, respectively.
For the Three Months Ended December 31, For the Year Ended December 31,
2016 2015 2016 2015
Revenues:
Rental income $ 96,503 $ 96,750 $ 387,015 $ 364,139
Tenant reimbursements and other income 18,332 18,044 74,992 64,226
Total revenues 114,835 114,794 462,007 428,365
Expenses:
Real estate taxes 11,314 10,213 42,879 37,460
Other operating expenses 12,970 11,832 52,957 41,953
Depreciation and amortization 33,522 32,727 133,762 122,906
Acquisition related costs 235 267 306 21,987
General and administrative 6,699 6,371 28,602 25,859
Loss on asset impairment 5,484 — 5,484 —
Total expenses 70,224 61,410 263,990 250,165
Operating income 44,611 53,384 198,017 178,200
Dividend income 396 1,666 1,268 1,666
Interest expense (including net amortization of debt issuance costs, premiums and
discounts of $1,384, $1,362, $5,508 and $5,100, respectively) (20,737) (20,175) (82,620) (73,885)
Loss on early extinguishment of debt — — — (6,845)
Loss on distribution to common shareholders of RMR common stock — (23,717) — (23,717)
Income before income tax expense and equity in earnings (loss) of an investee 24,270 11,158 116,665 75,419
Income tax expense (78) (191) (448) (515)
Equity in earnings (loss) of an investee 30 (50) 137 20
Net income 24,222 10,917 116,354 74,924
Net income allocated to noncontrolling interest — (41) (33) (176)
Net income attributed to SIR $ 24,222 $ 10,876 $ 116,321 $ 74,748
Weighted average common shares outstanding - basic 89,331 89,285 89,304 86,699
Weighted average common shares outstanding - diluted 89,335 89,291 89,324 86,708
Net income attributed to SIR per common share - basic and diluted $ 0.27 $ 0.12 $ 1.30 $ 0.86
Additional Data:
General and administrative expenses / total revenues 5.8% 5.5% 6.2% 6.0%
General and administrative expenses / total assets (at end of period) 0.1% 0.1% 0.6% 0.6%
Non-cash straight line rent adjustments included in rental income (1) $ 5,690 $ 6,975 $ 24,744 $ 27,370
Lease value amortization included in rental income (1) $ 434 $ 548 $ 1,732 $ 3,430
Lease termination fees included in rental income $ — $ 75 $ — $ 123
Non-cash amortization included in other operating expenses (2) $ 213 $ 215 $ 852 $ 430
Non-cash amortization included in general and administrative expenses (2) $ 344 $ 344 $ 1,378 $ 838
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 14
CONSOLID
ATED S
TA
TEMENTS OF CASH FLOW
S
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended December 31,
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 116,354 $ 74,924
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 78,151 72,448
Net amortization of debt issuance costs, premiums and discounts 5,508 5,100
Amortization of acquired real estate leases and assumed real estate lease obligations 52,691 46,059
Amortization of deferred leasing costs 1,413 1,058
Provision for losses on rents receivable 496 (463)
Straight line rental income (24,744) (27,370)
Loss on asset impairment 5,484 —
Loss on early extinguishment of debt — 6,845
Loss on distribution to common shareholders of RMR common stock — 23,717
Other non-cash expenses, net (607) 484
Equity in earnings of an investee (137) (20)
Change in assets and liabilities:
Restricted cash 1,127 16
Rents receivable (534) 1,265
Deferred leasing costs (4,485) (1,888)
Other assets (883) (1,772)
Accounts payable and other liabilities (572) 28,287
Rents collected in advance 2,520 (3,587)
Security deposits 42 436
Due to related persons 735 2,234
Net cash provided by operating activities 232,559 227,773
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions and deposits (18,046) (2,179,621)
Real estate improvements (8,862) (3,797)
Proceeds from sale of properties, net — 501,668
Investment in The RMR Group Inc. — (19,219)
Net cash used in investing activities (26,908) (1,700,969)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of senior unsecured notes, net — 1,433,694
Proceeds from borrowings 205,000 1,819,000
Repayments of borrowings (221,525) (1,593,245)
Debt issuance costs — (23,761)
Distributions to common shareholders (180,570) (157,597)
Repurchase of common shares (331) (130)
Purchase of noncontrolling interest (3,908) —
Distributions to noncontrolling interest (66) (393)
Net cash (used in) provided by financing activities (201,400) 1,477,568
Increase in cash and cash equivalents 4,251 4,372
Cash and cash equivalents at beginning of period 17,876 13,504
Cash and cash equivalents at end of period $ 22,127 $ 17,876
(dollars in thousands)
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 15
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(dollars in thousands)
For the Year Ended December 31,
2016 2015
SUPPLEMENTAL DISCLOSURES:
Interest paid $ 76,930 $ 45,078
Income taxes paid $ 428 $ 293
NON-CASH INVESTING ACTIVITIES:
Real estate and investment acquired by issuance of shares $ — $ (736,740)
Real estate acquired by assumption of mortgage notes payable $ — $ (297,698)
Real estate sold by assumption of mortgage notes payable $ — $ 29,955
Working capital assumed $ — $ (13,333)
NON-CASH FINANCING ACTIVITIES:
Assumption of mortgage notes payable $ — $ 297,698
Mortgage notes payable assumed in real estate sale $ — $ (29,955)
Issuance of SIR common shares $ — $ 736,740
Distribution to common shareholders of RMR common stock $ — $ (18,809)
CONSOLID
ATED S
TA
TEMENTS OF CASH FLOWS (CONTINUED
)
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 16
DEBT SUMMA
RY DEBT SUMMARY
(dollars in thousands)
Coupon Interest Principal Maturity Due at Years to
Rate (1) Rate (2) Balance (3) Date Maturity Maturity
As of December 31, 2016:
Unsecured Floating Rate Debt:
Revolving credit facility (LIBOR + 105 bps) (4) (6) 1.761% 1.761% $ 327,000 3/29/2019 $ 327,000 2.2
Term loan (LIBOR + 115 bps) (5) (6) 1.767% 1.767% 350,000 3/31/2020 350,000 3.2
Subtotal / weighted average unsecured floating rate debt 1.764% 1.764% 677,000 677,000 2.7
Unsecured Fixed Rate Debt:
Senior notes due 2018 2.850% 2.985% 350,000 2/1/2018 350,000 1.1
Senior notes due 2020 3.600% 3.775% 400,000 2/1/2020 400,000 3.1
Senior notes due 2022 4.150% 4.360% 300,000 2/1/2022 300,000 5.1
Senior notes due 2025 4.500% 4.755% 400,000 2/1/2025 400,000 8.1
Subtotal / weighted average unsecured fixed rate debt 3.781% 3.976% 1,450,000 1,450,000 4.4
Secured Fixed Rate Debt:
One property (two buildings) in Carlsbad, CA 5.950% 4.200% 17,498 9/1/2017 17,314 0.7
One property (one building) in Harvey, IL 4.500% 3.280% 1,984 6/1/2019 1,902 2.4
One property (one building) in Columbus, OH 4.500% 3.280% 2,381 6/1/2019 2,282 2.4
One property (one building) in Ankeny, IA 3.870% 3.380% 12,360 7/19/2020 12,360 3.6
One property (one building) in Philadelphia, PA (7) 2.617% 4.160% 41,000 8/3/2020 39,635 3.6
One property (one building) in Chester, VA 3.990% 3.480% 48,750 11/1/2020 48,750 3.8
One property (three buildings) in Seattle, WA 3.550% 3.790% 71,000 5/1/2023 71,000 6.3
One property (one building) in Chicago, IL 3.700% 3.590% 50,000 6/1/2023 50,000 6.4
Subtotal / weighted average secured fixed rate debt 3.716% 3.749% 244,973 243,243 4.8
Total / weighted average debt 3.199% 3.321% $ 2,371,973 $ 2,370,243 4.0
(1) Reflects the interest rate stated in, or determined pursuant to, the contract terms.
(2) Includes the effect of interest rate protection and mark to market accounting for certain mortgages and discounts on senior unsecured notes. Excludes upfront transaction costs.
(3) Principal balance excludes unamortized premiums, discounts and certain issuance costs related to these debts. Total debt outstanding as of December 31, 2016, net of unamortized
premiums, discounts and certain issuance costs totaling $20,657, was $2,351,316.
(4) We have a $750,000 revolving credit facility which has a maturity date of March 29, 2019, interest payable on borrowings of LIBOR plus 105 basis points and a facility fee of 20 basis points.
Both the interest rate premium and the facility fee for the revolving credit facility are subject to adjustment based on changes to our credit ratings. Upon the payment of an extension fee and
meeting other conditions, we have the option to extend the maturity date to March 29, 2020. Principal balance represents the amount outstanding on our $750,000 revolving credit facility at
December 31, 2016. Interest rate is as of December 31, 2016 and excludes the 20 basis points facility fee.
(5) We have a $350,000 term loan with a maturity date of March 31, 2020 and an interest rate on the amount outstanding of LIBOR plus 115 basis points. The interest rate premium for the term
loan is subject to adjustment based on changes to our credit ratings. Principal balance represents the amount outstanding on our $350,000 term loan at December 31, 2016. Interest rate is as
of December 31, 2016.
(6) The maximum borrowing availability under the revolving credit facility and term loan, combined, may be increased to up to $2,200,000 on certain terms and conditions.
(7) Interest is payable at a rate equal to LIBOR plus a premium. The interest charge has been fixed by a cash flow hedge which sets the interest rate at approximately 4.16% until August 3, 2020,
which is the maturity date of the mortgage note. Coupon rate is as of December 31, 2016.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 17
DEBT M
ATURIT
Y SCHEDUL
E
DEBT MATURITY SCHEDULE
(dollars in thousands)
Scheduled Principal Payments As of December 31, 2016
Unsecured Unsecured Secured
Floating Fixed Fixed
Year Rate Debt Rate Debt Rate Debt Total (3)
2017 $ — $ — $ 17,571 $ 17,571
2018 — 350,000 304 350,304
2019 327,000 (1) — 4,926 331,926
2020 350,000 (2) 400,000 101,172 851,172
2021 — — — —
2022 — 300,000 — 300,000
2023 — — 121,000 121,000
2024 — — — —
2025 — 400,000 — 400,000
Total $ 677,000 $ 1,450,000 $ 244,973 $ 2,371,973
Percent 28.6% 61.1% 10.3% 100.0%
(1) Represents the amount outstanding on our $750,000 revolving credit facility at December 31, 2016. We have a $750,000 revolving credit facility which has a maturity date of
March 29, 2019, interest payable on borrowings of LIBOR plus 105 basis points and a facility fee of 20 basis points. Both the interest rate premium and the facility fee for the
revolving credit facility are subject to adjustment based on changes to our credit ratings. Upon the payment of an extension fee and meeting other conditions, we have the option
to extend the maturity date to March 29, 2020.
(2) Represents the amount outstanding on our $350,000 term loan at December 31, 2016. We have a $350,000 term loan with a maturity date of March 31, 2020 and an interest
rate on the amount outstanding of LIBOR plus 115 basis points. The interest rate premium for the term loan is subject to adjustment based on changes to our credit ratings.
(3) Total debt outstanding as of December 31, 2016, net of unamortized premiums, discounts and certain issuance costs totaling $20,657, was $2,351,316.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 18
LEVERAGE R
ATIOS, COVERAGE R
ATIOS
AND PUBLIC DEBT COVENANT
S
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS
As of and For the Three Months Ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Leverage Ratios:
Total debt (book value) (1) / total gross assets (2) 48.2% 48.4% 48.3% 49.0% 48.7%
Total debt (book value) (1) / gross book value of real estate assets (3) 49.6% 49.9% 49.6% 50.6% 50.1%
Total debt (book value) (1) / total market capitalization (4) 51.1% 49.5% 50.2% 53.7% 57.2%
Secured debt (book value) (1) / total assets 5.3% 6.1% 6.2% 6.1% 6.1%
Variable rate debt (book value) (1) / total debt (book value) (1) 28.7% 29.0% 28.5% 30.0% 29.2%
Coverage Ratios:
Adjusted EBITDA (5) / interest expense 4.1x 4.0x 4.2x 4.2x 4.4x
Total debt (book value) (1) / annualized Adjusted EBITDA (5) 7.0x 7.1x 6.9x 6.8x 6.7x
Public Debt Covenants:
Total debt / adjusted total assets (6) (maximum 60%) 49.2% 49.6% 49.7% 50.4% 50.2%
Secured debt / adjusted total assets (6) (maximum 40%) 5.1% 5.9% 6.0% 6.0% 6.0%
Consolidated income available for debt service (7) / annual debt service (minimum 1.50x) 4.4x 4.5x 4.5x 4.6x 4.4x
Total unencumbered assets (6) / unsecured debt (minimum 150%) 203.9% 202.5% 202.4% 198.8% 200.0%
(1) Debt amounts are net of unamortized premiums, discounts and certain issuance costs.
(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 23 for the calculation of Adjusted EBITDA and for a reconciliation of net income determined in accordance with GAAP to that amount.
(6) Adjusted total assets and total unencumbered assets include original cost of real estate assets calculated in accordance with GAAP and exclude depreciation and amortization, accounts
receivable, other intangible assets and impairment writedowns, if any.
(7) Consolidated income available for debt service is earnings from operations excluding interest expense, depreciation and amortization, taxes, loss on asset impairment and gains and
losses on acquisitions and sales of assets and early extinguishment of debt, determined together with debt service on a pro forma basis for the four consecutive fiscal quarters most
recently ended.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 19
CAPI
TA
L EXPENDITURES SUMMA
RY CAPITAL EXPENDITURES SUMMARY
(dollars in thousands)
For the Three Months Ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Tenant improvements (1) $ 3,046 $ 1,343 $ 902 $ 14 $ 192
Leasing costs (2) 627 227 121 3,139 303
Building improvements (3) 946 561 1,021 104 1,054
Recurring capital expenditures 4,619 2,131 2,044 3,257 1,549
Development, redevelopment and other activities (4) 1,274 613 1,187 748 694
Total capital expenditures $ 5,893 $ 2,744 $ 3,231 $ 4,005 $ 2,243
(1) Tenant improvements include capital expenditures used to improve tenants' space or amounts paid directly to tenants to improve their space.
(2) Leasing costs include leasing related costs, such as brokerage commissions, legal costs and tenant inducements.
(3) Building improvements generally include (i) expenditures to replace obsolete building components and (ii) expenditures that extend the useful life of existing assets.
(4) Development, redevelopment and other activities generally include (i) capital expenditures that are identified at the time of a property acquisition and incurred within a short time
period after acquiring the property and (ii) capital expenditure projects that reposition a property or result in new sources of revenues.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 20
PROPERT
Y
ACQUISITIONS
AND DISPOSITIONS INFORM
ATION SINCE 1/1/16
PROPERTY ACQUISITIONS AND DISPOSITIONS INFORMATION SINCE 1/1/16
(dollars and sq. ft. in thousands, except per sq. ft. data)
Weighted
Average
Purchase Remaining
Date Number of Number of Purchase Price (2) / Cap Lease Term Percent
Acquired Location Properties Buildings Sq. Ft. Price (2) Sq. Ft. Rate (3) in Years (4) Leased (5) Tenant
7/22/2016 Huntsville, AL 1 1 57 $ 10,200 $ 179 8.7% 15.0 100.0% Digium, Inc.
10/12/2016 Richmond, VA 1 1 50 7,760 155 8.9% 11.3 100.0% Universal Leaf Tobacco Company, Inc.
Total / Weighted Average 2 2 107 $ 17,960 $ 168 8.8% 13.4 100.0%
Acquisitions (1):
Dispositions:
SIR has not disposed of any properties since January 1, 2016.
(1) In February 2016, SIR also acquired its joint venture partner's 11% interest in a 344,476 square foot net leased office building located in Duluth, GA for $3,908. As a result of that acquisition, SIR now
wholly owns that property. In January 2017, SIR also acquired a land parcel adjacent to one of its properties located in McAlester, OK for $226 in order to expand the building for the existing tenant.
These purchase prices exclude acquisition related costs.
(2) Represents the gross purchase price, excluding acquisition related costs, purchase price allocations and assumed mortgage debt, if any.
(3) Represents the ratio of (x) annual straight line rental income, excluding the impact of above and below market lease amortization, based on existing leases as of the date of acquisition, less estimated
annual property operating expenses as of the date of acquisition, excluding depreciation and amortization expense, to (y) the acquisition purchase price, including the principal amount of any assumed
debt and excluding acquisition related costs.
(4) Average remaining lease term in years is weighted based on rental revenues as of the date acquired.
(5) Percent leased is as of the date acquired.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 21
CALCUL
ATION OF PROPERT
Y NET OPER
ATING INCOME (NOI)
AND CASH BASIS NO
I
CALCULATION OF PROPERTY NET OPERATING INCOME (NOI) AND CASH BASIS NOI (1)
(dollars in thousands)
(1) See Definitions of Certain Non-GAAP Financial Measures on page 25 for a definition of NOI and Cash Basis NOI, a description of why we believe they are appropriate supplemental measures and a description of how we use
these measures.
(2) 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 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 common stock in June 2015. A portion of this liability is being amortized on a
straight line basis through December 31, 2035 as a reduction to property management fees, which are included in other operating expenses.
For the Three Months Ended For the Year Ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015 12/31/2016 12/31/2015
Calculation of NOI and Cash Basis NOI:
Rental income $ 96,503 $ 96,037 $ 96,615 $ 97,860 $ 96,750 $ 387,015 $ 364,139
Tenant reimbursements and other income 18,332 18,999 18,289 19,372 18,044 74,992 64,226
Real estate taxes (11,314) (10,755) (10,522) (10,288) (10,213) (42,879) (37,460)
Other operating expenses (12,970) (14,394) (12,635) (12,958) (11,832) (52,957) (41,953)
NOI 90,551 89,887 91,747 93,986 92,749 366,171 348,952
Non-cash straight line rent adjustments included in rental income (2) (5,690) (6,483) (6,269) (6,302) (6,975) (24,744) (27,370)
Lease value amortization included in rental income (2) (434) (443) (419) (436) (548) (1,732) (3,430)
Lease termination fees included in rental income (2) — — — — (75) — (123)
Non-cash amortization included in other operating expenses (3) (213) (213) (213) (213) (215) (852) (430)
Cash Basis NOI $ 84,214 $ 82,748 $ 84,846 $ 87,035 $ 84,936 $ 338,843 $ 317,599
Reconciliation of Cash Basis NOI and NOI to Net Income:
Cash Basis NOI $ 84,214 $ 82,748 $ 84,846 $ 87,035 $ 84,936 $ 338,843 $ 317,599
Non-cash straight line rent adjustments included in rental income (2) 5,690 6,483 6,269 6,302 6,975 24,744 27,370
Lease value amortization included in rental income (2) 434 443 419 436 548 1,732 3,430
Lease termination fees included in rental income (2) — — — — 75 — 123
Non-cash amortization included in other operating expenses (3) 213 213 213 213 215 852 430
NOI 90,551 89,887 91,747 93,986 92,749 366,171 348,952
Depreciation and amortization (33,522) (33,366) (33,405) (33,469) (32,727) (133,762) (122,906)
Acquisition related costs (235) (13) — (58) (267) (306) (21,987)
General and administrative (6,699) (7,553) (7,374) (6,976) (6,371) (28,602) (25,859)
Loss on asset impairment (5,484) — — — — (5,484) —
Operating income 44,611 48,955 50,968 53,483 53,384 198,017 178,200
Dividend income 396 397 475 — 1,666 1,268 1,666
Interest expense (20,737) (20,690) (20,584) (20,609) (20,175) (82,620) (73,885)
Loss on early extinguishment of debt — — — — — — (6,845)
Loss on distribution to common shareholders of RMR common stock — — — — (23,717) — (23,717)
Income before income tax expense and equity in earnings (loss) of an investee 24,270 28,662 30,859 32,874 11,158 116,665 75,419
Income tax expense (78) (107) (124) (139) (191) (448) (515)
Equity in earnings (loss) of an investee 30 13 17 77 (50) 137 20
Net income $ 24,222 $ 28,568 $ 30,752 $ 32,812 $ 10,917 $ 116,354 $ 74,924
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 22RECONCILI
ATION OF NOI
TO SAME PROPERT
Y NOI
AND CALCUL
ATION OF SAME PROPERT
Y
CASH BASIS NO
I RECONCILIATION OF NOI TO SAME PROPERTY NOI AND
CALCULATION OF SAME PROPERTY CASH BASIS NOI (1)
(dollars in thousands)
For the Three Months Ended For the Year Ended
12/31/2016 12/31/2015 12/31/2016 12/31/2015
Reconciliation of NOI to Same Property NOI (2)(3):
Rental income $ 96,503 $ 96,750 $ 387,015 $ 364,139
Tenant reimbursements and other income 18,332 18,044 74,992 64,226
Real estate taxes (11,314) (10,213) (42,879) (37,460)
Other operating expenses (12,970) (11,832) (52,957) (41,953)
NOI 90,551 92,749 366,171 348,952
Less:
NOI of properties not included in same property results (1,017) (338) (178,027) (156,746)
Same property NOI $ 89,534 $ 92,411 $ 188,144 $ 192,206
Calculation of Same Property Cash Basis NOI (2)(3):
Same property NOI $ 89,534 $ 92,411 $ 188,144 $ 192,206
Less:
Non-cash straight line rent adjustments included in rental income (4) (5,585) (6,944) (11,194) (14,035)
Lease value amortization included in rental income (4) (553) (621) (268) (425)
Lease termination fees included in rental income (4) — (75) — (123)
Non-cash amortization included in other operating expenses (5) (213) (215) (536) (268)
Same property Cash Basis NOI $ 83,183 $ 84,556 $ 176,146 $ 177,355
(1) See Definitions of Certain Non-GAAP Financial Measures on page 25 for a definition of NOI and Cash Basis NOI, a description of why we believe they are appropriate supplemental measures and a
description of how we use these measures.
(2) For the three months ended December 31, 2016, same property NOI and Cash Basis NOI are based on properties we owned as of December 31, 2016, and which we owned continuously since October 1,
2015.
(3) For the year ended December 31, 2016, same property NOI and Cash Basis NOI are based on properties we owned as of December 31, 2016, and which we owned continuously since January 1, 2015.
(4) 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 non-cash
amortization of intangible lease assets and liabilities and lease termination fees, if any.
(5) 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 common stock in June 2015. A portion of this liability
is being amortized on a straight line basis through December 31, 2035 as a reduction to property management fees, which are included in other operating expenses.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 23
CALCUL
ATION OF EBITD
A
AND
ADJUSTED EBITD
A
CALCULATION OF EBITDA AND ADJUSTED EBITDA (1)
(dollars in thousands)
For the Three Months Ended For the Year Ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015 12/31/2016 12/31/2015
Net income $ 24,222 $ 28,568 $ 30,752 $ 32,812 $ 10,917 $ 116,354 $ 74,924
Plus: interest expense 20,737 20,690 20,584 20,609 20,175 82,620 73,885
Plus: income tax expense 78 107 124 139 191 448 515
Plus: depreciation and amortization 33,522 33,366 33,405 33,469 32,727 133,762 122,906
EBITDA 78,559 82,731 84,865 87,029 64,010 333,184 272,230
Plus: acquisition related costs 235 13 — 58 267 306 21,987
Plus: general and administrative expense paid in common shares (2) 166 578 607 272 156 1,623 1,751
Plus: loss on asset impairment (3) 5,484 — — — — 5,484 —
Plus: loss on early extinguishment of debt (4) — — — — — — 6,845
Plus: loss on distribution to common shareholders of RMR common stock (5) — — — — 23,717 — 23,717
Adjusted EBITDA $ 84,444 $ 83,322 $ 85,472 $ 87,359 $ 88,150 $ 340,597 $ 326,530
(1) See Definitions of Certain Non-GAAP Financial Measures on page 25 for a definition of EBITDA and Adjusted EBITDA and a description of why we believe they
are appropriate supplemental measures.
(2) Amount represents the portion of business management fees that were payable in our common shares as well as equity based compensation to our trustees,
officers and certain other employees of RMR’s operating subsidiary, RMR LLC. Beginning June 1, 2015, all business management fees are paid in cash.
(3) We recorded a $5,484 loss on asset impairment in the fourth quarter of 2016 in connection with one vacant property located in Maynard, MA.
(4) We recorded a $6,845 loss on early extinguishment of debt in the first quarter of 2015 in connection with the termination of a bridge loan and the refinancing of our
revolving credit facility and term loan.
(5) Amount represents a non-cash loss recorded as a result of the closing price of RMR common stock being lower than our carrying amount per share on the day we
distributed RMR common stock to our shareholders.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 24CALCUL
ATION OF FUNDS FROM OPER
ATIONS (FFO)
A
TTRIBUTED
TO SIR
AND NORMALIZE
D
FFO
A
TTRIBUTED
TO SI
R
CALCULATION OF FUNDS FROM OPERATIONS (FFO) ATTRIBUTED TO SIR AND NORMALIZED FFO
ATTRIBUTED TO SIR (1)
(amounts in thousands, except per share data)
For the Three Months Ended For the Year Ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015 12/31/2016 12/31/2015
Net income attributed to SIR $ 24,222 $ 28,568 $ 30,752 $ 32,779 $ 10,876 $ 116,321 $ 74,748
Plus: depreciation and amortization 33,522 33,366 33,405 33,469 32,727 133,762 122,906
Plus: loss on asset impairment 5,484 — — — — 5,484 —
Plus: net income allocated to noncontrolling interest — — — 33 41 33 176
Less: FFO allocated to noncontrolling interest — — — (77) (118) (77) (436)
FFO attributed to SIR 63,228 61,934 64,157 66,204 43,526 255,523 197,394
Plus: acquisition related costs 235 13 — 58 267 306 21,987
Plus: loss on early extinguishment of debt — — — — — — 6,845
Plus: loss on distribution to common shareholders of RMR common stock (2) — — — — 23,717 — 23,717
Less: normalized FFO from noncontrolling interest, net of FFO — — — — — — (62)
Normalized FFO attributed to SIR $ 63,463 $ 61,947 $ 64,157 $ 66,262 $ 67,510 $ 255,829 $ 249,881
Weighted average common shares outstanding - basic 89,331 89,308 89,292 89,286 89,285 89,304 86,699
Weighted average common shares outstanding - diluted 89,335 89,334 89,315 89,295 89,291 89,324 86,708
Net income attributed to SIR per common share - basic and diluted $ 0.27 $ 0.32 $ 0.34 $ 0.37 $ 0.12 $ 1.30 $ 0.86
FFO attributed to SIR per common share - basic and diluted $ 0.71 $ 0.69 $ 0.72 $ 0.74 $ 0.49 $ 2.86 $ 2.28
Normalized FFO attributed to SIR per common share - basic and diluted $ 0.71 $ 0.69 $ 0.72 $ 0.74 $ 0.76 $ 2.86 $ 2.88
(1) See Definitions of Certain Non-GAAP Financial Measures on page 25 for a definition of FFO attributed to SIR and Normalized FFO attributed to SIR, a description
of why we believe they are appropriate supplemental measures and a description of how we use these measures.
(2) Amount represents a non-cash loss recorded as a result of the closing price of RMR common stock being lower than our carrying amount per share on the day we
distributed RMR common stock to our shareholders.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 25
DEFINITIONS OF CER
TAIN NON-GAA
P FINANCIA
L MEASURE
S
DEFINITIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
NOI and Cash Basis NOI:
The calculations of NOI and Cash Basis NOI exclude certain components of net income in order to provide results that are more closely related to our property level results of operations. We
calculate NOI and Cash Basis NOI as shown on page 21. We define NOI as income from our rental of real estate less our property operating expenses. NOI excludes amortization of capitalized
tenant improvement costs and leasing commissions because we record those amounts as depreciation and amortization. We define Cash Basis NOI as NOI excluding non-cash straight line rent
adjustments, lease value amortization, lease termination fees, if any, and non-cash amortization included in other operating expenses. We consider NOI and Cash Basis NOI to be appropriate
supplemental measures to net income because they may help both investors and management to understand the operations of our properties. We use NOI and Cash Basis NOI to evaluate
individual and company wide property level performance, and we believe that NOI and Cash Basis NOI provide useful information to investors regarding our results of operations because they
reflect only those income and expense items that are generated and incurred at the property level and may facilitate comparisons of our operating performance between periods and with other
REITs. NOI and Cash Basis NOI do not represent cash generated by operating activities in accordance with GAAP and should not be considered as an alternative to net income, net income
attributed to SIR or operating income as an indicator of our operating performance or as a measure of our liquidity. These measures should be considered in conjunction with net income, net
income attributed to SIR and operating income as presented in our Consolidated Statements of Income. Other real estate companies and REITs may calculate NOI and Cash Basis NOI differently
than we do.
EBITDA and Adjusted EBITDA:
We calculate EBITDA and Adjusted EBITDA as shown on page 23. We consider EBITDA and Adjusted EBITDA to be appropriate supplemental measures of our operating performance, along with
net income, net income attributed to SIR and operating income. We believe that EBITDA and Adjusted EBITDA provide useful information to investors because by excluding the effects of certain
historical amounts, such as interest, depreciation and amortization expense, EBITDA and Adjusted EBITDA may facilitate a comparison of current operating performance with our past operating
performance. EBITDA and Adjusted EBITDA do not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net
income attributed to SIR or operating income as an indicator of operating performance or as a measure of our liquidity. These measures should be considered in conjunction with net income, net
income attributed to SIR and operating income as presented in our Consolidated Statements of Income. Other real estate companies and REITs may calculate EBITDA and Adjusted EBITDA
differently than we do.
FFO Attributed to SIR and Normalized FFO Attributed to SIR:
We calculate FFO attributed to SIR and Normalized FFO attributed to SIR as shown on page 24. FFO attributed to SIR is calculated on the basis defined by The National Association of Real
Estate Investment Trusts, or NAREIT, which is net income, calculated in accordance with GAAP, plus real estate depreciation and amortization, loss on asset impairment and the difference
between net income and FFO allocated to noncontrolling interest, as well as certain other adjustments currently not applicable to us. Our calculation of Normalized FFO attributed to SIR differs
from NAREIT’s definition of FFO because we include business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as expense in accordance
with GAAP due to their quarterly volatility not necessarily being indicative of our core operating performance and the uncertainty as to whether any such business management incentive fees will
ultimately be payable when all contingencies for determining any such fees are determined at the end of the calendar year and we exclude acquisition related costs, loss on early extinguishment
of debt, loss on distribution to common shareholders of RMR common stock and Normalized FFO from noncontrolling interest, net of FFO, if any. We consider FFO attributed to SIR and
Normalized FFO attributed to SIR to be appropriate supplemental measures of operating performance for a REIT, along with net income, net income attributed to a REIT and operating income. We
believe that FFO attributed to SIR and Normalized FFO attributed to SIR provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation
expense, FFO attributed to SIR and Normalized FFO attributed to SIR may facilitate a comparison of our operating performance between periods and with other REITs. FFO attributed to SIR and
Normalized FFO attributed to SIR 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 and availability of cash to pay our obligations. FFO attributed to SIR and Normalized FFO
attributed to SIR do not represent cash generated by operating activities in accordance with GAAP and should not be considered as alternatives to net income, net income attributed to SIR or
operating income as an indicator of our operating performance or as a measure of our liquidity. These measures should be considered in conjunction with net income, net income attributed to SIR
and operating income as presented in our Consolidated Statements of Income. Other real estate companies and REITs may calculate FFO and Normalized FFO differently than we do.
26
PORTFOLIO INFORMATION
26
19100 Ridgewood Parkway, San Antonio, TX
Square Feet: 618,017
Tesoro Corporation (NYSE: TSO) Corporate Headquarters
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 27
PORTFOLIO SUMMA
RY
B
Y PROPERT
Y TYP
E
PORTFOLIO SUMMARY BY PROPERTY TYPE
(dollars and sq. ft. in thousands)
(1) See page 21 for the calculation of NOI and Cash Basis NOI and a reconciliation of those amounts to net income determined in accordance with GAAP.
As of and For the Three Months Ended December 31, 2016
Mainland Mainland Subtotal Mainland Hawaii
Key Statistic Office Industrial Properties Properties Total
Number of properties 66 44 110 11 121
Percent of total 54.5% 36.4% 90.9% 9.1% 100.0%
Leasable buildings, land parcels and easements 87 46 133 229 362
Percent of total 24.0% 12.7% 36.7% 63.3% 100.0%
Total square feet 12,720 14,315 27,035 17,778 44,813
Percent of total 28.4% 31.9% 60.3% 39.7% 100.0%
Leased square feet 12,335 14,315 26,650 16,712 43,362
Percent leased 97.0% 100.0% 98.6% 94.0% 96.8%
Total revenues $ 72,064 $ 19,937 $ 92,001 $ 22,834 $ 114,835
Percent of total 62.7% 17.4% 80.1% 19.9% 100.0%
NOI (1) $ 54,945 $ 17,951 $ 72,896 $ 17,655 $ 90,551
Percent of total 60.7% 19.8% 80.5% 19.5% 100.0%
Cash Basis NOI (1) $ 50,797 $ 16,746 $ 67,543 $ 16,671 $ 84,214
Percent of total 60.3% 19.9% 80.2% 19.8% 100.0%
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 28
SAME PROPERT
Y RESU
LTS OF OPER
ATION
S
SAME PROPERTY RESULTS OF OPERATIONS
(sq. ft. in thousands)
As of and For the Three Months Ended (1) As of and For the Year Ended (2)
12/31/2016 12/31/2015 12/31/2016 12/31/2015
Number of Properties:
Mainland Office 63 63 28 28
Mainland Industrial 44 44 12 12
Subtotal Mainland Properties 107 107 40 40
Hawaii Properties 11 11 11 11
Total 118 118 51 51
Leasable Buildings, Land Parcels and Easements:
Mainland Office 84 84 39 39
Mainland Industrial 46 46 13 13
Subtotal Mainland Properties 130 130 52 52
Hawaii Properties 229 229 229 229
Total 359 359 281 281
Square Feet (3):
Mainland Office 12,513 12,513 5,345 5,345
Mainland Industrial 14,315 14,315 4,548 4,548
Subtotal Mainland Properties 26,828 26,828 9,893 9,893
Hawaii Properties 17,778 17,778 17,778 17,778
Total 44,606 44,606 27,671 27,671
Percent Leased (4):
Mainland Office 96.9% 100.0% 92.8% 100.0%
Mainland Industrial 100.0% 100.0% 100.0% 100.0%
Subtotal Mainland Properties 98.6% 100.0% 96.1% 100.0%
Hawaii Properties 94.0% 94.4% 94.0% 94.4%
Total 96.7% 97.8% 94.8% 96.4%
(1) Consists of properties that we owned continuously since October 1, 2015.
(2) Consists of properties that we owned continuously since January 1, 2015.
(3) Subject to modest adjustments when space is re-measured or re-configured for new tenants and when land leases are converted to building leases.
(4) Includes (i) space being fitted out for occupancy pursuant to existing leases, if any, and (ii) space that is leased but is not occupied or is being offered for sublease by tenants, if any.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 29
SAME PROPERT
Y RESU
LTS OF OPER
ATIONS (CONTINUED
)
SAME PROPERTY RESULTS OF OPERATIONS (CONTINUED)
(dollars in thousands)
As of and For the Three Months Ended (1) As of and For the Year Ended (2)
12/31/2016 12/31/2015 12/31/2016 12/31/2015
Total Revenues:
Mainland Office $ 70,643 $ 71,355 $ 114,647 $ 116,222
Mainland Industrial 19,937 20,148 27,992 27,716
Subtotal Mainland Properties 90,580 91,503 142,639 143,938
Hawaii Properties 22,834 22,815 91,324 89,856
Total $ 113,414 $ 114,318 $ 233,963 $ 233,794
NOI (3):
Mainland Office $ 53,928 $ 55,669 $ 92,336 $ 95,316
Mainland Industrial 17,951 18,580 24,820 25,060
Subtotal Mainland Properties 71,879 74,249 117,156 120,376
Hawaii Properties 17,655 18,162 70,988 71,830
Total $ 89,534 $ 92,411 $ 188,144 $ 192,206
Cash Basis NOI (3):
Mainland Office $ 49,766 $ 50,621 $ 85,632 $ 86,164
Mainland Industrial 16,746 16,975 23,083 22,884
Subtotal Mainland Properties 66,512 67,596 108,715 109,048
Hawaii Properties 16,671 16,960 67,431 68,307
Total $ 83,183 $ 84,556 $ 176,146 $ 177,355
NOI % Change:
Mainland Office -3.1% -3.1%
Mainland Industrial -3.4% -1.0%
Subtotal Mainland Properties -3.2% -2.7%
Hawaii Properties -2.8% -1.2%
Total -3.1% -2.1%
Cash Basis NOI % Change:
Mainland Office -1.7% -0.6%
Mainland Industrial -1.3% 0.9%
Subtotal Mainland Properties -1.6% -0.3%
Hawaii Properties -1.7% -1.3%
Total -1.6% -0.7%
(1) Consists of properties that we owned continuously since October 1, 2015.
(2) Consists of properties that we owned continuously since January 1, 2015.
(3) See page 21 for the calculation of NOI and Cash Basis NOI and a reconciliation of those amounts to net income determined in accordance with GAAP and see page 22 for a
calculation and reconciliation of same property NOI and same property Cash Basis NOI.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 30
LEASING SUMMA
RY LEASING SUMMARY
(dollars and sq. ft. in thousands, except per sq. ft. data)
The above leasing summary is based on leases entered into during the periods indicated.
As of and For the Three Months Ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Properties 121 120 119 119 119
Leasable buildings, land parcels and easements 362 361 360 360 360
Total sq. ft. (1) 44,813 44,763 44,706 44,706 44,706
Square feet leased 43,362 43,333 43,279 43,700 43,712
Percentage leased 96.8% 96.8% 96.8% 97.8% 97.8%
Leasing Activity (Sq. Ft.):
New leases 100 8 15 42 72
Renewals 253 989 133 438 97
Total 353 997 148 480 169
% Change in GAAP Rent (2):
New leases -16.3% 16.4% -21.9% 19.7% 25.5%
Renewals 35.4% 4.8% 24.6% 13.6% 26.6%
Weighted average 32.0% 4.9% 15.5% 13.9% 26.1%
Leasing Costs and Concession Commitments (3):
New leases $ 52 $ 3 $ 66 $ 349 $ 720
Renewals 35 845 25 12,263 27
Total $ 87 $ 848 $ 91 $ 12,612 $ 747
Leasing Costs and Concession Commitments per Sq. Ft. (3):
New leases $ 0.52 $ 0.38 $ 4.40 $ 8.31 $ 10.00
Renewals $ 0.14 $ 0.85 $ 0.19 $ 28.00 $ 0.28
Total $ 0.25 $ 0.85 $ 0.61 $ 26.28 $ 4.42
Weighted Average Lease Term by Sq. Ft. (years):
New leases 3.1 7.0 4.3 21.9 21.7
Renewals 23.1 9.1 13.2 15.3 16.9
Total 17.4 9.1 12.3 15.8 18.9
Leasing Costs and Concession Commitments per Sq. Ft. per Year (3) (4):
New leases $ 0.17 $ 0.05 $ 1.02 $ 0.38 $ 0.46
Renewals $ 0.01 $ 0.09 $ 0.01 $ 1.83 $ 0.02
Total $ 0.01 $ 0.09 $ 0.05 $ 1.66 $ 0.23
(1) Subject to modest adjustments when space is re-measured or re-configured for new tenants and when land leases are converted to building leases.
(2) Percent difference in prior rents charged for same space. Rents include estimated recurring expense reimbursements and exclude lease value amortization.
(3) Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent.
(4) Amounts are per square foot per year for the weighted average lease term by leased square feet.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 31
OCCU
PANC
Y
AND LEASING
ANA
LYSIS B
Y PROPERT
Y TYP
E
OCCUPANCY AND LEASING ANALYSIS BY PROPERTY TYPE
(sq. ft. in thousands)
Total Sq. Ft. (1) Sq. Ft. Leases Executed During
As of the Three Months Ended 12/31/2016
Property Type 12/31/2016 New Renewals Total
Mainland Office 12,720 — — —
Mainland Industrial 14,315 — — —
Subtotal Mainland Properties 27,035 — — —
Hawaii Properties 17,778 100 253 353
Total 44,813 100 253 353
Sq. Ft. Leased
As of 9/30/2016 New and Acquisitions / As of 12/31/2016
Property Type 9/30/2016 % Leased (2) Expired Renewals (Sales) 12/31/2016 % Leased
Mainland Office 12,285 97.0% — — 50 12,335 97.0%
Mainland Industrial 14,315 100.0% — — — 14,315 100.0%
Subtotal Mainland Properties 26,600 98.6% — — 50 26,650 98.6%
Hawaii Properties 16,733 94.1% (374) 353 — 16,712 94.0%
Total 43,333 96.8% (374) 353 50 43,362 96.8%
(1) Subject to modest adjustments when space is re-measured or re-configured for new tenants and when land leases are converted to building leases.
(2) Excludes effects of space remeasurements during the period, if any. Percent leased includes (i) space being fitted out for occupancy pursuant to
existing leases as of the period, if any, and (ii) space which is leased but is not occupied or is being offered for sublease by tenants, if any.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 32
TENANT DIVERSIT
Y
AND CREDIT CHARACTERISTIC
S
TENANT DIVERSITY AND CREDIT CHARACTERISTICS
As of December 31, 2016
% of Annualized
Tenant Industry Rental Revenue (1)
Technology & Communications 24.1%
Retail & Food 18.6%
Real Estate & Financial 13.0%
Manufacturing & Transportation 11.5%
Energy Services 10.2%
Industrial 8.1%
Legal & Consulting 7.8%
Other 6.7%
100.0%
% of Annualized
Tenant Credit Characteristics Rental Revenue (1)
Leased Hawaii lands 15.1% (2)
Investment grade rated 39.5% (3)
Unrated or non-investment grade 45.4%
100.0%
% of Annualized Rental Revenue (1)
% of Annualized Rental Revenue (1)
(1) We define annualized rental revenue as the annualized contractual rents, as of December 31, 2016, from tenants pursuant to existing leases, including straight line rent adjustments
but excluding lease value amortization. Annualized rental revenue also includes tenant concessions, including free rent and amounts reimbursed to tenants, and estimated recurring
expense reimbursements from tenants pursuant to existing leases.
(2) Excludes certain Hawaii lands which are leased by investment grade rated tenants and included in the investment grade rated tenant credit category.
(3) Includes certain Hawaii lands which are leased by investment grade rated tenants.
Technology & Communications
Retail & Food
Real Estate & Financial
Manufacturing &
Transportation
Energy Services
Industrial
Legal & Consulting
Other
24.1%
18.6%
13.0%
11.5%
10.2%
8.1%
7.8%
6.7%
Leased Hawaii lands (2)
Investment grade rated (3)
Unrated or non-investment
grade
15.1%
39.5%
45.4%
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 33
TENANTS REPRESENTING 1% OR MORE OF
TO
TA
L ANNUALIZED REN
TA
L REVENU
E
TENANTS REPRESENTING 1% OR MORE OF TOTAL ANNUALIZED RENTAL REVENUE
(sq. ft. in thousands)
% of
% of Total Annualized Rental
Tenant Property Type Sq. Ft. (1) Sq. Ft. (1) Revenue (2)
1. Shook, Hardy & Bacon L.L.P. Mainland Office 596 1.4% 3.9%
2. Tellabs, Inc. Mainland Office 820 1.9% 3.7%
3. Amazon.com, Inc. Mainland Industrial 3,048 7.0% 3.5%
4. Noble Energy, Inc. Mainland Office 497 1.1% 3.1%
5. Bank of America, National Association Mainland Office 554 1.3% 3.1%
6. Tesoro Corporation Mainland Office 618 1.4% 3.0%
7. Cinram Group, Inc. Mainland Industrial 1,873 4.3% 2.9%
8. F5 Networks, Inc. Mainland Office 299 0.7% 2.9%
9. WestRock Company Mainland Office 311 0.7% 2.4%
10. Orbital ATK, Inc. Mainland Office 337 0.8% 2.3%
11. Tyson Foods, Inc. Mainland Office 248 0.6% 2.1%
12. Novell, Inc. Mainland Office 406 0.9% 1.7%
13. FedEx Corporation Mainland Office; Mainland Industrial 795 1.8% 1.7%
14. PNC Bank, National Association Mainland Office 441 1.0% 1.4%
15. Allstate Insurance Company Mainland Office 458 1.1% 1.3%
16. ServiceNow, Inc. Mainland Office 149 0.3% 1.3%
17. Church & Dwight Co., Inc. Mainland Office 250 0.6% 1.3%
18. Restoration Hardware, Inc. Mainland Industrial 1,195 2.8% 1.3%
19. Tailored Brands, Inc. Mainland Office 206 0.5% 1.2%
20. Primerica Life Insurance Company Mainland Office 344 0.8% 1.2%
21. United Launch Alliance, LLC Mainland Industrial 168 0.4% 1.1%
22. American Tire Distributors, Inc. Mainland Office 722 1.7% 1.1%
23. Compass Group USA, Inc. Mainland Office 227 0.5% 1.1%
24. The Southern Company Mainland Office 448 1.0% 1.1%
25. Red Hat, Inc. Mainland Office 175 0.4% 1.0%
Total 15,185 35.0% 50.7%
As of December 31, 2016
(1) Pursuant to existing leases as of December 31, 2016 and includes (i) space being fitted out for occupancy, if any, and (ii) space which is leased but is not
occupied or is being offered for sublease by tenants, if any.
(2) We define annualized rental revenue as the annualized contractual rents, as of December 31, 2016, from tenants pursuant to existing leases, including
straight line rent adjustments but excluding lease value amortization. Annualized rental revenue also includes tenant concessions, including free rent and
amounts reimbursed to tenants, and estimated recurring expense reimbursements from tenants pursuant to existing leases.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 34
THREE
YEAR LEASE EXPIR
ATION SCHEDULE B
Y PROPERT
Y TYP
E
THREE YEAR LEASE EXPIRATION SCHEDULE BY PROPERTY TYPE
(dollars and sq. ft. in thousands)As of December 31, 2016
2020 and
Total 2017 2018 2019 Thereafter
Mainland Office:
Total sq. ft. 12,720
Leased sq. ft. (1) 12,335 135 753 206 11,241
Percent 1.1% 6.1% 1.7% 91.1%
Annualized rental revenue (2) $ 282,541 $ 2,519 $ 9,397 $ 4,292 $ 266,333
Percent 0.9% 3.3% 1.5% 94.3%
Mainland Industrial:
Total sq. ft. 14,315
Leased sq. ft. (1) 14,315 93 55 95 14,072
Percent 0.6% 0.4% 0.7% 98.3%
Annualized rental revenue (2) $ 80,469 $ 1,332 $ 1,004 $ 585 $ 77,548
Percent 1.7% 1.2% 0.7% 96.4%
Subtotal Mainland Properties:
Total sq. ft. 27,035
Leased sq. ft. (1) 26,650 228 808 301 25,313
Percent 0.9% 3.0% 1.1% 95.0%
Annualized rental revenue (2) $ 363,010 $ 3,851 $ 10,401 $ 4,877 $ 343,881
Percent 1.1% 2.9% 1.3% 94.7%
Hawaii Properties:
Total sq. ft. 17,778
Leased sq. ft. (1) 16,712 257 185 1,638 14,632
Percent 1.5% 1.1% 9.8% 87.6%
Annualized rental revenue (2) $ 90,771 $ 1,433 $ 1,430 $ 3,948 $ 83,960
Percent 1.6% 1.6% 4.3% 92.5%
Total:
Total sq. ft. 44,813
Leased sq. ft. (1) 43,362 485 993 1,939 39,945
Percent 1.1% 2.3% 4.5% 92.1%
Annualized rental revenue (2) $ 453,781 $ 5,284 $ 11,831 $ 8,825 $ 427,841
Percent 1.2% 2.6% 1.9% 94.3%
(1) Pursuant to existing leases as of December 31, 2016 and includes (i) space being fitted out for occupancy, if any, and (ii) space which is leased but is not occupied, or is
being offered for sublease, if any.
(2) We define annualized rental revenue as the annualized contractual rents, as of December 31, 2016, from tenants pursuant to existing leases, including straight line rent
adjustments but excluding lease value amortization. Annualized rental revenue also includes tenant concessions, including free rent and amounts reimbursed to tenants, and
estimated recurring expense reimbursements from tenants pursuant to existing leases.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 35
PORTFOLIO LEASE EXPIR
ATION SCHEDUL
E
PORTFOLIO LEASE EXPIRATION SCHEDULE
(dollars and sq. ft. in thousands)As of December 31, 2016
Cumulative
% of Total Cumulative % % of Total % of Total
Rented Rented of Total Rented Annualized Annualized Annualized
Number of Square Feet Square Feet Square Feet Rental Revenue Rental Revenue Rental Revenue
Period / Year Tenants Expiring (1) Expiring (1) Expiring (1) Expiring (2) Expiring (2) Expiring (2)
2017 17 485 1.1% 1.1% $ 5,284 1.2% 1.2%
2018 26 993 2.3% 3.4% 11,831 2.6% 3.8%
2019 19 1,939 4.5% 7.9% 8,825 1.9% 5.7%
2020 16 1,009 2.3% 10.2% 9,207 2.0% 7.7%
2021 20 1,442 3.3% 13.5% 12,716 2.8% 10.5%
2022 69 3,847 8.9% 22.4% 49,059 10.8% 21.3%
2023 24 2,943 6.8% 29.2% 38,394 8.5% 29.8%
2024 23 7,001 16.1% 45.3% 68,684 15.1% 44.9%
2025 17 1,770 4.1% 49.4% 26,263 5.8% 50.7%
2026 8 1,701 3.9% 53.3% 26,166 5.8% 56.5%
Thereafter 105 20,232 46.7% 100.0% 197,352 43.5% 100.0%
Total 344 43,362 100.0% $ 453,781 100.0%
Weighted average remaining lease term (in years) 10.5 10.1
(1) Rented square feet is pursuant to existing leases as of December 31, 2016, and includes (i) space being fitted out for occupancy pursuant to existing leases, if any, and (ii) space which is leased but
is not occupied or is being offered for sublease by tenants, if any.
(2) We define annualized rental revenue as the annualized contractual rents, as of December 31, 2016, from tenants pursuant to existing leases, including straight line rent adjustments but excluding
lease value amortization. Annualized rental revenue also includes tenant concessions, including free rent and amounts reimbursed to tenants, and estimated recurring expense reimbursements from
tenants pursuant to existing leases.
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 36
HA
W
AII LAND RENT RESET SUMMA
RY HAWAII LAND RENT RESET SUMMARY
(dollars and sq. ft. in thousands)
Historical Hawaii Land Rent Resets:
For the Three Months Ended
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Number of leases subject to resets — 1 — — 1
Square feet — 86 — — 70
Percent change in GAAP rent (1) —% 43.0% —% —% 44.3%
Scheduled Hawaii Land Rent Resets:
As of December 31, 2016
Number Annualized
of Resets Sq. Ft. Rental Revenue (2)
2017 5 303 $ 1,681
2018 8 380 2,525
2019 20 2,498 10,811
2020 and Thereafter 39 2,823 19,608
Total 72 6,004 $ 34,625
(1) Percent difference in prior rents charged for same space. Reset rents include estimated recurring expense reimbursements and exclude lease value
amortization.
(2) We define annualized rental revenue as the annualized contractual rents, as of December 31, 2016, from tenants pursuant to existing leases, including straight
line rent adjustments but excluding lease value amortization. Annualized rental revenue also includes tenant concessions, including free rent and amounts
reimbursed to tenants, and estimated recurring expense reimbursements from tenants pursuant to existing leases.
37EXHIBIT
Mapunapuna Ground Leases, Honolulu, HI
129 leasable land parcels and easements
Approximate Square Feet: 6,541,000
37
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 38
PROPERT
Y DE
TAI
L
PROPERTY DETAIL
(dollars and square feet in thousands) EXHIBIT AAs of December 31, 2016
(1) Land parcels include four easements.
(2) We define annualized rental revenue as the annualized contractual rents, as of December 31, 2016, from tenants pursuant to existing leases, including straight line rent adjustments but excluding lease value amortization. Annualized rental
revenue also includes tenant concessions, including free rent and amounts reimbursed to tenants, and estimated recurring expense reimbursements from tenants pursuant to existing leases.
(3) Excludes the value of real estate intangibles.
(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 February 2012 in connection with our initial public offering.
(5) Weighted based on square feet.
Weighted
Number of Average Year
Buildings & Annualized Built or
Contiguous Rental Undepreciated Depreciated Date Substantially
Property City State Land Parcels (1) Property Type Square Feet % Leased Revenue (2) Carrying Value (3) Carrying Value (3) Acquired (4) Renovated (5)
1. Inverness Center Birmingham AL 3 Mainland Office Building 448 100.0% $ 4,843 $ 38,631 $ 33,710 12/9/2010; 4/17/2015 1985
2. Cinram Distribution Center Huntsville AL 1 Mainland Industrial Building 1,371 100.0% 9,210 73,001 65,702 8/31/2012 2007
3. 445 Jan Davis Drive Huntsville AL 1 Mainland Office Building 57 100.0% 927 10,286 10,189 7/22/2016 2007
4. 4501 Industrial Drive Fort Smith AR 1 Mainland Industrial Building 64 100.0% 465 4,385 4,218 1/29/2015 2013
5. 16001 North 28th Avenue Phoenix AZ 1 Mainland Office Building 106 100.0% 1,845 13,692 13,233 4/16/2015 2007
6. 2149 West Dunlap Avenue Phoenix AZ 1 Mainland Office Building 123 100.0% 2,437 20,110 19,418 1/29/2015 1983
7. Regents Center Tempe AZ 2 Mainland Office Building 101 100.0% 1,847 13,213 8,526 6/30/1999 1988
8. Campbell Place Carlsbad CA 2 Mainland Office Building 95 100.0% 2,598 21,314 19,408 9/21/2012 2007
9. Folsom Corporate Center Folsom CA 1 Mainland Office Building 96 100.0% 3,418 28,954 25,128 12/17/2010 2009
10. Bayside Technology Park Fremont CA 1 Mainland Office Building 101 100.0% 2,162 10,581 9,593 3/19/2009 1990
11. 100 Redwood Shores Parkway Redwood City CA 1 Mainland Office Building 63 100.0% 3,095 35,531 34,418 1/29/2015 2014
12. 3875 Atherton Road Rocklin CA 1 Mainland Office Building 19 100.0% 410 4,180 3,989 1/29/2015 1991
13. 2090 Fortune Drive San Jose CA 1 Mainland Office Building 72 100.0% 914 7,698 7,602 1/29/2015 2014
14. 2115 O’Nel Drive San Jose CA 1 Mainland Office Building 99 100.0% 3,138 33,098 31,895 1/29/2015 2013
15. 6448-6450 Via Del Oro San Jose CA 1 Mainland Office Building 76 100.0% 1,736 14,737 14,182 1/29/2015 1983
16. North First Street San Jose CA 1 Mainland Office Building 64 100.0% 1,959 14,494 13,894 12/23/2013 2013
17. Rio Robles Drive San Jose CA 3 Mainland Office Building 186 100.0% 4,590 44,924 42,800 12/23/2013 2011
18. 2450 & 2500 Walsh Avenue Santa Clara CA 2 Mainland Office Building 132 100.0% 4,489 44,797 43,043 1/29/2015 2014
19. 3250 and 3260 Jay Street Santa Clara CA 2 Mainland Office Building 149 100.0% 6,018 63,959 61,465 1/29/2015 2013
20. 350 West Java Drive Sunnyvale CA 1 Mainland Office Building 96 100.0% 2,859 24,013 22,715 11/15/2012 2012
21. 7958 South Chester Street Centennial CO 1 Mainland Office Building 168 100.0% 5,030 31,013 29,894 1/29/2015 2000
22. 350 Spectrum Loop Colorado Springs CO 1 Mainland Office Building 156 100.0% 2,713 23,265 22,299 1/29/2015 2000
23. 955 Aeroplaza Drive Colorado Springs CO 1 Mainland Industrial Building 125 100.0% 896 8,212 7,857 1/29/2015 2012
24. 13400 East 39th Avenue and 3800 Wheeling Street Denver CO 2 Mainland Industrial Building 394 100.0% 1,367 16,101 15,472 1/29/2015 1996
25. 333 Inverness Drive South Englewood CO 1 Mainland Office Building 140 100.0% 2,389 15,446 14,062 6/15/2012 1998
26. 150 Greenhorn Drive Pueblo CO 1 Mainland Industrial Building 54 100.0% 545 4,377 4,177 1/29/2015 2013
27. 2 Tower Drive Wallingford CT 1 Mainland Industrial Building 62 100.0% 406 3,644 3,084 10/24/2006 1978
28. 1 Targeting Center Windsor CT 1 Mainland Office Building 97 100.0% 1,119 9,076 8,278 7/20/2012 1999
29. 235 Great Pond Road Windsor CT 1 Mainland Industrial Building 171 100.0% 1,383 11,869 10,823 7/20/2012 2004
30. 10350 NW 112th Avenue Miami FL 1 Mainland Office Building 79 100.0% 3,026 23,469 22,513 1/29/2015 2002
31. 2100 NW 82nd Ave Miami FL 1 Mainland Industrial Building 37 100.0% 265 1,897 1,237 3/19/1998 2013
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 39
PROPERT
Y DE
TAI
L (CONTINUED
)
PROPERTY DETAIL (CONTINUED)
(dollars and square feet in thousands) EXHIBIT AAs of December 31, 2016
(1) Land parcels include four easements.
(2) We define annualized rental revenue as the annualized contractual rents, as of December 31, 2016, from tenants pursuant to existing leases, including straight line rent adjustments but excluding lease value amortization. Annualized rental
revenue also includes tenant concessions, including free rent and amounts reimbursed to tenants, and estimated recurring expense reimbursements from tenants pursuant to existing leases.
(3) Excludes the value of real estate intangibles.
(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 February 2012 in connection with our initial public offering.
(5) Weighted based on square feet.
(6) Excludes annual tenant percentage rent generally received and recognized during the first quarter of each year for the previous year. Percentage rent recognized during the first quarter of 2016 totaled $846.
Weighted
Number of Average Year
Buildings & Annualized Built or
Contiguous Rental Undepreciated Depreciated Date Substantially
Property City State Land Parcels (1) Property Type Square Feet % Leased Revenue (2) Carrying Value (3) Carrying Value (3) Acquired (4) Renovated (5)
32. One Primerica Parkway Duluth GA 1 Mainland Office Building 344 100.0% 5,221 57,333 54,916 1/29/2015 2013
33. King Street Ground Lease Honolulu HI 1 Hawaii Properties Land 21 100.0% 237 1,342 1,342 12/5/2003 —
34. Mapunapuna Ground Leases Honolulu HI 129 Hawaii Properties Land 6,541 100.0% 49,051 344,478 341,291 12/5/2003;11/21/2012 —
35. Safeway Shopping Center Honolulu HI 3 Hawaii Properties Land 158 100.0% 3,407 11,604 11,519 12/5/2003 —
36. Salt Lake Shopping Center Honolulu HI 2 Hawaii Properties Land 334 100.0% 1,702 9,660 9,660 12/5/2003 —
37. Sand Island Buildings Honolulu HI 8 Hawaii Properties Building 295 98.2% 4,917 39,133 33,003 12/5/2003;11/23/2004 1974
38. Sand Island Ground Leases Honolulu HI 40 Hawaii Properties Land 2,152 100.0% 16,343 92,435 92,378 12/5/2003 —
39. Waiwai Ground Leases Honolulu HI 2 Hawaii Properties Land 45 —% — 2,567 2,419 12/5/2003 —
40. Campbell Buildings Kapolei HI 5 Hawaii Properties Building 285 100.0% 3,328 24,167 19,214 6/15/2005 1978
41. Campbell Easements Kapolei HI 3 Hawaii Properties Land — —% — (6) 10,496 10,496 6/15/2005 —
42. Campbell Ground Leases Kapolei HI 35 Hawaii Properties Land 7,901 87.1% 11,535 103,353 103,083 6/15/2005 —
43. Waipahu Ground Lease Waipahu HI 1 Hawaii Properties Land 44 100.0% 250 717 717 12/5/2003 —
44. 5500 SE Delaware Avenue Ankeny IA 1 Mainland Industrial Building 450 100.0% 1,687 19,194 18,380 1/29/2015 2012
45. 951 Trails Road Eldridge IA 1 Mainland Industrial Building 172 100.0% 1,021 8,695 6,817 4/2/2007 2001
46. 8305 NW 62nd Avenue Johnston IA 1 Mainland Office Building 199 100.0% 3,240 34,008 32,498 1/29/2015 2011
47. 2300 N 33rd Ave Newton IA 1 Mainland Industrial Building 317 100.0% 1,458 13,823 11,063 9/29/2008 2008
48. 7121 South Fifth Avenue Pocatello ID 1 Mainland Industrial Building 33 100.0% 370 4,746 4,544 1/29/2015 2007
49. 400 South Jefferson Street Chicago IL 1 Mainland Office Building 248 100.0% 9,591 90,479 86,968 1/29/2015 2012
50. 1230 West 171st Street Harvey IL 1 Mainland Industrial Building 40 100.0% 430 2,473 2,393 1/29/2015 2004
51. 475 Bond Street Lincolnshire IL 1 Mainland Industrial Building 223 100.0% 1,607 20,958 20,189 1/29/2015 2000
52. 1415 West Diehl Road Naperville IL 1 Mainland Office Building 820 100.0% 16,766 188,475 176,463 4/1/2014 2001
53. 5156 American Road Rockford IL 1 Mainland Industrial Building 38 100.0% 173 1,929 1,856 1/29/2015 1996
54. 440 North Fairway Drive Vernon Hills IL 1 Mainland Office Building 100 100.0% 1,679 13,977 13,174 10/15/2013 2009
55. Capitol Tower Topeka KS 1 Mainland Office Building 144 100.0% 2,612 17,616 15,825 7/30/2012 2006
56. The Atrium at Circleport II Erlanger KY 1 Mainland Office Building 86 100.0% 1,210 13,032 9,303 6/30/2003 1999
57. 17200 Manchac Park Lane Baton Rouge LA 1 Mainland Industrial Building 125 100.0% 849 10,560 10,135 1/29/2015 2014
58. 209 South Bud Street Lafayette LA 1 Mainland Industrial Building 60 100.0% 511 5,256 5,038 1/29/2015 2010
59. 300 and 330 Billerica Road Chelmsford MA 2 Mainland Office Building 209 53.1% 1,505 18,635 16,790 1/18/2011;9/27/2012 2001
60. 111 Powdermill Road Maynard MA 1 Mainland Office Building 287 —% — 24,427 18,000 3/30/2007 1990
61. 314 Littleton Road Westford MA 1 Mainland Office Building 175 100.0% 4,577 33,944 32,485 1/29/2015 2013
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 40
PROPERT
Y DE
TAI
L (CONTINUED
)
PROPERTY DETAIL (CONTINUED)
(dollars and square feet in thousands) EXHIBIT AAs of December 31, 2016
(1) Land parcels include four easements.
(2) We define annualized rental revenue as the annualized contractual rents, as of December 31, 2016, from tenants pursuant to existing leases, including straight line rent adjustments but excluding lease value amortization. Annualized rental
revenue also includes tenant concessions, including free rent and amounts reimbursed to tenants, and estimated recurring expense reimbursements from tenants pursuant to existing leases.
(3) Excludes the value of real estate intangibles.
(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 February 2012 in connection with our initial public offering.
(5) Weighted based on square feet.
Weighted
Number of Average Year
Buildings & Annualized Built or
Contiguous Rental Undepreciated Depreciated Date Substantially
Property City State Land Parcels (1) Property Type Square Feet % Leased Revenue (2) Carrying Value (3) Carrying Value (3) Acquired (4) Renovated (5)
62. 7001 Columbia Gateway Drive Columbia MD 1 Mainland Office Building 120 100.0% 3,720 28,292 25,833 12/21/2012 2008
63. 4000 Principio Parkway North East MD 1 Mainland Industrial Building 1,195 100.0% 5,803 75,804 72,377 1/29/2015 2012
64. 3550 Green Court Ann Arbor MI 1 Mainland Office Building 82 100.0% 1,625 13,018 11,947 12/21/2012 1998
65. 3800 Midlink Drive Kalamazoo MI 1 Mainland Industrial Building 158 100.0% 2,185 43,229 41,284 1/29/2015 2014
66. 2401 Cram Avenue SE Bemidji MN 1 Mainland Industrial Building 22 100.0% 183 2,237 2,135 1/29/2015 2013
67. 110 Stanbury Industrial Drive Brookfield MO 1 Mainland Industrial Building 16 100.0% 190 2,059 1,970 1/29/2015 2012
68. 2555 Grand Boulevard Kansas City MO 1 Mainland Office Building 596 100.0% 17,812 78,824 76,207 7/31/2015 2003
69. 628 Patton Avenue Asheville NC 1 Mainland Industrial Building 33 100.0% 180 2,014 1,941 1/29/2015 1994
70. 2300 and 2400 Yorkmont Road Charlotte NC 2 Mainland Office Building 284 100.0% 6,253 47,105 45,088 1/29/2015 1995
71. 3900 NE 6th Street Minot ND 1 Mainland Industrial Building 24 100.0% 341 3,923 3,769 1/29/2015 2013
72. 1415 West Commerce Way Lincoln NE 1 Mainland Industrial Building 222 100.0% 1,094 10,718 10,310 1/29/2015 2000
73. 18010 and 18020 Burt Street Omaha NE 2 Mainland Office Building 203 100.0% 3,993 49,842 47,579 1/29/2015 2012
74. 309 Dulty's Lane Burlington NJ 1 Mainland Industrial Building 634 100.0% 3,325 53,000 50,537 1/29/2015 2001
75. 500 Charles Ewing Boulevard Ewing NJ 1 Mainland Office Building 250 100.0% 5,940 74,374 71,064 1/29/2015 2012
76. 725 Darlington Avenue Mahwah NJ 1 Mainland Industrial Building 167 100.0% 2,292 18,045 17,390 4/9/2014 2010
77. One Jefferson Road Parsippany NJ 1 Mainland Office Building 100 100.0% 4,216 19,107 18,672 11/13/2015 2009
78. 299 Jefferson Road Parsippany NJ 1 Mainland Office Building 151 100.0% 4,031 30,970 29,721 1/29/2015 2011
79. 2375 East Newlands Road Fernley NV 1 Mainland Industrial Building 338 100.0% 1,471 18,700 17,863 1/29/2015 2007
80. 55 Commerce Avenue Albany NY 1 Mainland Industrial Building 125 100.0% 1,091 11,284 10,795 1/29/2015 2013
81. 8687 Carling Road Liverpool NY 1 Mainland Office Building 38 100.0% 746 5,564 4,191 1/6/2006 2007
82. 1212 Pittsford - Victor Road Pittsford NY 1 Mainland Office Building 55 100.0% 1,024 5,531 4,353 11/30/2004 2003
83. 500 Canal View Boulevard Rochester NY 1 Mainland Office Building 95 100.0% 1,563 15,404 10,915 1/6/2006 1997
84. 32150 Just Imagine Drive Avon OH 1 Mainland Industrial Building 645 100.0% 3,479 25,480 21,066 5/29/2009 2000
85. 1415 Industrial Drive Chillicothe OH 1 Mainland Industrial Building 44 100.0% 362 4,465 4,309 1/29/2015 2012
86. 2231 Schrock Road Columbus OH 1 Mainland Office Building 42 100.0% 692 5,451 5,236 1/29/2015 1999
87. 5300 Centerpoint Parkway Groveport OH 1 Mainland Industrial Building 581 100.0% 2,877 32,563 31,132 1/29/2015 2014
88. 200 Orange Point Drive Lewis Center OH 1 Mainland Industrial Building 125 100.0% 1,038 9,913 9,500 1/29/2015 2013
89. 301 Commerce Drive South Point OH 1 Mainland Industrial Building 75 100.0% 485 5,130 4,913 1/29/2015 2013
90. 2820 State Highway 31 McAlester OK 1 Mainland Industrial Building 24 100.0% 218 2,627 2,520 1/29/2015 2012
91. 501 Ridge Avenue Hanover PA 1 Mainland Industrial Building 502 100.0% 3,739 27,030 22,423 9/24/2008 1965
Select Income REIT
Supplemental Operating and Financial Data, December 31, 2016 41
PROPERT
Y DE
TAI
L (CONTINUED
)
PROPERTY DETAIL (CONTINUED)
(dollars and square feet in thousands) EXHIBIT AAs of December 31, 2016
(1) Land parcels include four easements.
(2) We define annualized rental revenue as the annualized contractual rents, as of December 31, 2016, from tenants pursuant to existing leases, including straight line rent adjustments but excluding lease value amortization. Annualized rental
revenue also includes tenant concessions, including free rent and amounts reimbursed to tenants, and estimated recurring expense reimbursements from tenants pursuant to existing leases.
(3) Excludes the value of real estate intangibles.
(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 February 2012 in connection with our initial public offering.
(5) Weighted based on square feet.
Weighted
Number of Average Year
Buildings & Annualized Built or
Contiguous Rental Undepreciated Depreciated Date Substantially
Property City State Land Parcels (1) Property Type Square Feet % Leased Revenue (2) Carrying Value (3) Carrying Value (3) Acquired (4) Renovated (5)
92. 8800 Tinicum Boulevard Philadelphia PA 1 Mainland Office Building 441 100.0% 6,451 71,016 67,800 1/29/2015 2000
93. 9680 Old Bailes Road Fort Mill SC 1 Mainland Office Building 60 100.0% 767 8,857 8,471 1/29/2015 2007
94. 996 Paragon Way Rock Hill SC 1 Mainland Industrial Building 945 100.0% 3,041 38,520 36,799 1/29/2015 2014
95. 510 John Dodd Road Spartanburg SC 1 Mainland Industrial Building 1,016 100.0% 4,664 61,298 58,519 1/29/2015 2012
96. 4836 Hickory Hill Road Memphis TN 1 Mainland Industrial Building 646 100.0% 1,699 12,310 11,765 12/23/2014 2007
97. 2020 Joe B. Jackson Parkway Murfreesboro TN 1 Mainland Industrial Building 1,016 100.0% 5,045 62,759 60,111 1/29/2015 2012
98. 16001 North Dallas Parkway Addison TX 2 Mainland Office Building 554 100.0% 14,175 105,724 96,371 1/16/2013 1996
99. 2115-2116 East Randol Mill Road Arlington TX 1 Mainland Office Building 183 100.0% 1,043 13,242 12,510 1/29/2015 1989
100. Research Park Austin TX 2 Mainland Industrial Building 149 100.0% 2,336 15,463 9,467 6/16/1999 1999
101. 1001 Noble Energy Way Houston TX 1 Mainland Office Building 497 100.0% 14,213 121,886 116,223 1/29/2015 1998
102. 10451 Clay Road Houston TX 1 Mainland Office Building 97 100.0% 2,789 27,012 25,967 1/29/2015 2013
103. 6380 Rogerdale Road Houston TX 1 Mainland Office Building 206 100.0% 5,530 46,880 45,288 1/29/2015 2006
104. 4421 W. John Carp. Freeway Irving TX 1 Mainland Office Building 54 100.0% 655 5,974 3,267 3/19/1998 1995
105. 8675,8701-8711 Freeport Pkwy and 8901 Esters Boulevard Irving TX 3 Mainland Office Building 458 100.0% 6,038 81,610 78,289 1/29/2015 1990
106. 1511 East Common Street New Braunfels TX 1 Mainland Office Building 63 100.0% 1,076 14,412 13,851 1/29/2015 2005
107. 2900 West Plano Parkway Plano TX 1 Mainland Office Building 191 100.0% 1,420 27,491 26,423 1/29/2015 1998
108. 3400 West Plano Parkway Plano TX 1 Mainland Office Building 235 100.0% 1,485 34,392 32,888 1/29/2015 1994
109. 19100 Ridgewood Parkway San Antonio TX 1 Mainland Office Building 618 100.0% 13,809 192,538 183,533 1/29/2015 2008
110. 3600 Wiseman Boulevard San Antonio TX 1 Mainland Office Building 100 100.0% 3,003 15,423 14,277 3/19/2013 2004
111. 1800 Novell Place Provo UT 1 Mainland Office Building 406 100.0% 7,940 85,640 76,595 6/1/2012 2000
112. 4885-4931 North 300 West Provo UT 2 Mainland Office Building 125 100.0% 3,649 29,338 26,852 2/28/2013 2009
113. 1095 South 4800 West Salt Lake City UT 1 Mainland Industrial Building 150 100.0% 1,107 8,413 8,082 1/29/2015 2012
114. 1901 Meadowville Technology Parkway Chester VA 1 Mainland Industrial Building 1,016 100.0% 6,343 71,511 68,276 1/29/2015 2012
115. 501 South 5th Street Richmond VA 1 Mainland Office Building 311 100.0% 10,868 123,672 114,063 7/2/2013 2009
116. Parham Place Richmond VA 3 Mainland Office Building 89 100.0% 1,603 9,864 9,605 7/20/2015 2013
117. 9201 Forest Hill Avenue Richmond VA 1 Mainland Office Building 50 100.0% 1,109 6,094 6,064 10/12/2016 1985
118. 1751 Blue Hills Drive Roanoke VA 1 Mainland Industrial Building 399 100.0% 1,874 23,760 22,796 1/29/2015 2003
119. Orbital Sciences Campus Sterling VA 3 Mainland Office Building 337 100.0% 10,359 72,165 65,810 11/29/2012 2000
120. 181 Battaile Drive Winchester VA 1 Mainland Industrial Building 308 100.0% 1,363 14,341 10,898 4/20/2006 1987
121. 351, 401, 501 Elliott Ave West Seattle WA 3 Mainland Office Building 300 100.0% 12,983 129,633 125,109 1/29/2015 2000
362 44,813 96.8% $ 453,781 $ 4,142,420 $ 3,899,792 2004
