Financial Data and Key Metrics Changes - Normalized FFO for Q1 2021 was $61.8 million or $1.28 per share, exceeding expectations and consensus estimates by $0.04 due to higher than forecasted NOI [27] - CAD for Q1 2021 was $47.7 million or $0.99 per share, with a rolling four-quarter CAD payout ratio of 59% [27] - G&A expense for Q1 was $11.3 million, including $5.2 million of estimated business management incentive fees, down from $7.1 million in the same period last year [28] Business Line Data and Key Metrics Changes - Same property cash basis NOI decreased by $1.6 million or 1.8% compared to Q1 2020, slightly outperforming guidance [32] - Leasing results included 575,000 square feet of new and renewal leasing with a 3.2% roll-up in rent and a consolidated occupancy of 90.8% at the end of the quarter [16][27] Market Data and Key Metrics Changes - Current building utilization is at 30% of portfolio square footage, with expectations for tenants to advance re-entry plans into Q3 and Q4 [15] - The overall leasing pipeline remains robust with discussions covering 3.1 million square feet, including 106,000 square feet of new and renewal leasing signed since quarter end [18] Company Strategy and Development Direction - The company is focused on capital recycling, with a plan to dispose of $100 million to $300 million of properties to invest in newer, less capital-intensive buildings [13] - The acquisition pipeline is trending in excess of $400 million, with an active market for acquisitions and a disciplined approach to transactions [11][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the portfolio's performance despite challenges from the COVID-19 pandemic, with rent collections trending above 99% [9] - The company anticipates a decline in same property cash basis NOI for Q2 2021 between 3.5% and 5.5% compared to Q2 2020, driven by known vacancies and lease expirations [33] Other Important Information - The company received the 2021 ENERGY STAR Partner of the Year Sustained Excellence Award, marking the fourth consecutive year of recognition [25] - Interest expense for Q1 was $28.8 million, flat sequentially but up $1.6 million from the prior year due to previous unsecured senior notes issuance [31] Q&A Session Summary Question: On the Boston property that you bought, is there any opportunity to increase occupancy? - Management indicated the goal is to pursue short-term leases while evaluating a larger plan for the consolidated assets in Boston [38] Question: Is the occupancy decline due to the Boston project? - Management clarified that the decline was primarily driven by known move-outs in the Chicago submarket, not the Boston project [39] Question: What are the updated costs and timing for the redevelopment of the vacated property? - The plan is to move forward with redevelopment, targeting Q1 2023 for delivery, with total construction costs around $150 million [41] Question: How competitive is the acquisition pipeline? - Management noted that cap rates for targeted assets remain competitive, with many buyers chasing similar types of assets [42][43] Question: Was the tenant that moved out included in the occupancy numbers? - Management confirmed that the tenant was included in the numbers and will reflect in Q2 [48] Question: What is the expected trajectory for occupancy throughout the year? - Management anticipates occupancy to end the year around 89% to 90%, depending on various factors including asset dispositions [50] Question: Can you break down the leasing pipeline in terms of new leasing versus renewals? - Management indicated that the pipeline is approximately 60% renewal and 40% new leasing [66] Question: What is the coverage of the dividend post-incentive fees? - The year-end projection, including the incentive fee, would result in a payout ratio of about 84% [61]

PART I. Financial Information [Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents unaudited condensed consolidated financial statements for Office Properties Income Trust, including Balance Sheets, Income, Equity, and Cash Flow Statements, with essential notes Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total real estate properties, net** | $3,007,696 | $3,070,229 | | **Cash and cash equivalents** | $184,462 | $42,045 | | **Total assets** | $3,952,579 | $3,946,436 | | **Senior unsecured notes, net** | $2,035,304 | $2,033,242 | | **Total liabilities** | $2,331,581 | $2,337,044 | | **Total shareholders' equity** | $1,620,998 | $1,609,392 | Condensed Consolidated Statements of Comprehensive Income Highlights (in thousands) | Account | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | **Rental income** | $144,524 | $149,885 | | **Total expenses** | $131,044 | $119,751 | | **Gain on sale of real estate** | $54,004 | $10,756 | | **Net income** | $37,860 | $10,840 | | **Net income per share (basic and diluted)** | $0.78 | $0.23 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $57,942 | $37,601 | | **Net cash provided by investing activities** | $113,896 | $42,095 | | **Net cash used in financing activities** | ($27,218) | ($146,386) | | **Increase (decrease) in cash** | $144,620 | ($66,690) | [Notes to Financial Statements - Real Estate Properties (Note 3)](index=9&type=section&id=Note%203.%20Real%20Estate%20Properties) Details the company's **180-property** portfolio, Q1 **2021** dispositions totaling **$130.8 million** with a **$54.0 million** gain, a **$7.7 million** impairment loss, and a planned **$27.0 million** acquisition - As of March 31, **2021**, the portfolio consisted of **180 wholly-owned properties** with approximately **24.6 million rentable square feet**[22](index=22&type=chunk) - During Q1 **2021**, the company entered into **20 leases** for approximately **575,000 rentable square feet** with a weighted average lease term of **5.4 years**[22](index=22&type=chunk) Q1 2021 Disposition and Impairment Activity (in thousands) | Activity | Details | Amount | | :--- | :--- | :--- | | **Dispositions** | Sale of 2 properties (321,000 sq. ft.) | $130,845 (Sales Price) | | | | $54,004 (Gain on Sale) | | **Impairment** | Impairment on 2 properties held for sale | $7,660 (Loss) | - The company has an agreement to acquire a property in Boston, MA for **$27.0 million**, with the acquisition expected to occur before the end of Q2 **2021**[25](index=25&type=chunk) [Notes to Financial Statements - Leases and Concentration (Notes 4 & 5)](index=11&type=section&id=Note%204.%20Leases%20%26%20Note%205.%20Concentration) The company granted **$2,483,000** in COVID-19 rent assistance, while the portfolio shows concentration with the U.S. government as the largest tenant (**25.9% of annualized rental income**) and **36.3%** of income from California, Virginia, and D.C - As of April 26, **2021**, the company granted temporary rent assistance of **$2,483,000** to **18 tenants** impacted by the COVID-19 pandemic, generally structured as 12-month deferral plans[38](index=38&type=chunk)[39](index=39&type=chunk) - The U.S. government is the largest tenant, representing approximately **25.9% of annualized rental income** as of March 31, **2021**, up from **25.0% a year prior**[40](index=40&type=chunk) - The portfolio has geographic concentration, with properties in California (**12.7%**), Virginia (**12.7%**), and the District of Columbia (**10.9%**) accounting for a significant portion of annualized rental income[41](index=41&type=chunk) [Notes to Financial Statements - Indebtedness (Note 6)](index=12&type=section&id=Note%206.%20Indebtedness) Total debt was **$2.24 billion** (**$2.07 billion** unsecured notes, **$170.2 million** mortgages), with **$750 million** available on the credit facility and no outstanding borrowings, and compliance with all debt covenants - Principal debt obligations at March 31, **2021**, were **$2.07 billion** in senior unsecured notes and **$170.2 million** in mortgage notes[42](index=42&type=chunk) - As of March 31, **2021**, there were no amounts outstanding under the **$750 million** revolving credit facility, which matures in January **2023**[44](index=44&type=chunk) - The company believes it was in compliance with all covenants under its credit agreement and senior unsecured notes indentures as of March 31, **2021**[46](index=46&type=chunk) [Notes to Financial Statements - Shareholders' Equity (Note 8)](index=14&type=section&id=Note%208.%20Shareholders'%20Equity) In Q1 **2021**, the company declared and paid a **$0.55 per share** common share distribution, totaling **$26,575**, with a similar distribution declared for Q2 Q1 2021 Common Share Distribution | Declaration Date | Record Date | Paid Date | Per Share | Total (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Jan 14, 2021 | Jan 25, 2021 | Feb 18, 2021 | $0.55 | $26,575 | - On April 15, **2021**, a further quarterly distribution of **$0.55 per share** was declared, payable in May **2021**[51](index=51&type=chunk) [Notes to Financial Statements - Related Party Transactions (Notes 9 & 10)](index=14&type=section&id=Note%209.%20Business%20and%20Property%20Management%20Agreements%20with%20RMR%20LLC%20%26%20Note%2010.%20Related%20Person%20Transactions) The company, managed by RMR LLC, recognized **$9,474,000** in Q1 **2021** business management fees (including **$5,200,000** incentive fee) and **$4,612,000** in property management fees - The company has no employees and is managed by RMR LLC under separate business and property management agreements[52](index=52&type=chunk) - Net business management fees for Q1 **2021** were **$9,474,000**, including **$5,200,000** of estimated business management incentive fees This compares to **$4,699,000** in Q1 **2020**, which had no incentive fee[53](index=53&type=chunk) - Property management and construction supervision fees paid to RMR LLC totaled **$4,612,000** for Q1 **2021**, down from **$5,064,000** in Q1 **2020**[54](index=54&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 **2021** performance, noting stable operations, capital recycling, and strong liquidity, with net income up due to property sales, though Normalized FFO per share decreased from **$1.40** to **$1.28** [Overview and Property Operations](index=16&type=section&id=Overview%20and%20Property%20Operations) The **180-property** portfolio was **90.8%** leased, with **$2,483,000** in COVID-19 rent deferrals; Q1 leasing totaled **575,000 rentable square feet** with a **3.2%** rent roll-up, and the U.S. government is the largest tenant (**25.9% of annualized rental income**) - The COVID-19 pandemic has not had a significant impact on business to date The company granted temporary rent assistance of **$2,483,000** to **18 tenants**, with **$2,118,000 (85.3%)** collected as of April 26, **2021**[63](index=63&type=chunk) Portfolio Occupancy | Metric | March 31, 2021 | March 31, 2020 | | :--- | :--- | :--- | | Total Properties | 180 | 184 | | Total Rentable Sq. Ft. (thousands) | 24,568 | 24,906 | | Percent Leased | **90.8%** | **91.5%** | - In Q1 **2021**, the company executed leases for **575,000 rentable square feet** The weighted average rent increase was **3.2%** above prior rents for the same space, with a weighted average lease term of **5.4 years**[73](index=73&type=chunk) - Tenants with investment-grade credit ratings (or guarantees from investment-grade parents) accounted for **56.1%** of annualized rental income as of March 31, **2021**[87](index=87&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q1 **2021** rental income decreased **3.6%** to **$144,524** due to dispositions, while net income surged to **$37,860** from **$10,840** due to a **$54,004** gain on sales, and G&A rose **58.6%** to **$11,272** Financial Performance Comparison (in thousands) | Metric | Q1 2021 | Q1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Rental Income | $144,524 | $149,885 | (3.6%) | | Net Operating Income (NOI) | $96,499 | $100,186 | (3.7%) | | General & Administrative | $11,272 | $7,109 | 58.6% | | Gain on sale of real estate | $54,004 | $10,756 | n/m | | Net Income | $37,860 | $10,840 | n/m | - The decrease in rental income was primarily due to property disposition activities[98](index=98&type=chunk) - The increase in G&A expenses was primarily the result of **$5.2 million** of estimated business management incentive fees recorded in the **2021** period[104](index=104&type=chunk) [Non-GAAP Financial Measures](index=24&type=section&id=Non-GAAP%20Financial%20Measures) Q1 **2021** NOI was **$96,499** (down from **$100,186**), FFO per diluted share was **$1.17** (down from **$1.34**), and Normalized FFO per diluted share was **$1.28** (down from **$1.40**) NOI Reconciliation (in thousands) | | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net Income | $37,860 | $10,840 | | *Reconciling Items* | ... | ... | | **NOI** | **$96,499** | **$100,186** | FFO and Normalized FFO Reconciliation (in thousands, except per share) | | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net Income | $37,860 | $10,840 | | **FFO** | **$56,609** | **$64,268** | | **Normalized FFO** | **$61,809** | **$67,550** | | FFO per diluted share | $1.17 | $1.34 | | Normalized FFO per diluted share | $1.28 | $1.40 | [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$750 million** available on its credit facility and no debt maturities until **2022**; Q1 operating cash flow was **$57,942**, and **$130.8 million** in property sales funded capital recycling - As of April 28, **2021**, the company had **$750 million** available under its revolving credit facility and no debt maturities until **2022**[121](index=121&type=chunk) - The capital recycling program is a key strategy, with two properties sold in Q1 **2021** for **$130.8 million** and another sold in April **2021** for **$39.0 million**[123](index=123&type=chunk) Debt Maturities as of March 31, 2021 (in thousands) | Year | Debt Maturities | | :--- | :--- | | 2021 | $896 | | 2022 | $625,518 | | 2023 | $143,784 | | 2024 | $350,000 | | 2025 | $650,000 | | Thereafter | $472,000 | | **Total** | **$2,242,198** | [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure, managed by **$2.24 billion** in fixed-rate debt; the **$750 million** revolving credit facility is LIBOR-tied, and the company monitors LIBOR's phase-out - At March 31, **2021**, total outstanding fixed-rate debt was **$2.24 billion**[141](index=141&type=chunk) - A hypothetical immediate one percentage point increase in interest rates would decrease the fair value of the company's fixed-rate debt obligations by approximately **$103.6 million**[143](index=143&type=chunk) - At March 31, **2021**, the company had no outstanding floating-rate debt Its **$750 million** revolving credit facility is tied to LIBOR, which is expected to be phased out[147](index=147&type=chunk)[152](index=152&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, **2021**, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures are effective as of March 31, **2021**[153](index=153&type=chunk) - There were no material changes in internal control over financial reporting during the first quarter of **2021**[154](index=154&type=chunk) PART II. Other Information [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's **2020** Annual Report on Form 10-K - There have been no material changes to the risk factors from those previously disclosed in our **2020** Annual Report[170](index=170&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, debt indentures, officer certifications, and XBRL data files - The report includes a list of filed exhibits, such as the Amended and Restated Declaration of Trust, various debt indentures, and required officer certifications[171](index=171&type=chunk)[173](index=173&type=chunk)

Fort Mill, SC OFFICE PROPERTIES FOURTH QUARTER 2020 Supplemental Operating and Financial Data ALL AMOUNTS IN THIS REPORT ARE UNAUDITED. Table of Contents CORPORATE INFORMATION Please refer to Non-GAAP Financial Measures and Certain Definitions for terms used throughout this document. | --- | --- | |---------------------------------------------------------------------------------------|-------| | Company Profile | | | Investor Information . | | | Research Coverage | | | FINANCIALS | | | Key Financial Data | ...

Office Properties Income Trust (NASDAQ:OPI) Q4 2020 Earnings Conference Call February 19, 2021 10:00 AM ET Company Participants Olivia Snyder - Manager, Investor Relations Chris Bilotto - President and Chief Executive Officer Matt Brown - Chief Financial Officer and Treasurer Conference Call Participants Bryan Maher - B. Riley Securities Jason Idoine - RBC Capital Omotayo Okusanya - Mizuho James Feldman - Bank of America/Merrill Lynch Operator Good morning and welcome to the Office Properties Income Trust F ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) Office Properties Income Trust (OPI) is a REIT focused on owning, operating, and leasing properties primarily to single tenants and those with high credit quality, with the U.S. government as its largest tenant, managing a 24.9 million square foot portfolio through capital recycling and external management [Our Company and COVID-19 Pandemic](index=8&type=section&id=Our%20Company%20and%20COVID-19%20Pandemic) OPI's 2020 portfolio comprised 181 properties totaling 24.9 million square feet, with the U.S. government as its largest tenant, and the company provided **$2.5 million** in temporary rent assistance due to COVID-19 while maintaining strong liquidity Portfolio Overview as of December 31, 2020 | Metric | Value | | :--- | :--- | | Wholly Owned Properties | 181 | | Rentable Square Feet | 24.9 million | | Undepreciated Carrying Value | $3.5 billion | | Number of Tenants | 349 | | Weighted Average Remaining Lease Term | 5.1 years | | Largest Tenant (U.S. Government) | 25.2% of annualized rental income | - In response to the COVID-19 pandemic, OPI granted temporary rent assistance of **$2.5 million** to 19 tenants, representing **3.3%** of annualized rental income, with **78.5%** of these deferrals collected as of February 16, 2021[31](index=31&type=chunk) - As of February 18, 2021, the company had **$750.0 million** available under its revolving credit facility and no significant debt maturities until 2022, providing substantial liquidity[35](index=35&type=chunk) [Business and Growth Strategy](index=10&type=section&id=Business%20and%20Growth%20Strategy) OPI's strategy focuses on acquiring and managing single-tenant and high-credit-quality properties, employing a capital recycling program to enhance portfolio quality and pursuing growth through strategic acquisitions - The company's business plan focuses on owning properties leased to single tenants and tenants with high credit quality, such as government entities[41](index=41&type=chunk) - OPI employs a capital recycling program, selectively selling properties to reinvest proceeds into new acquisitions that aim to reduce the average property age, lengthen the weighted average lease term, and lower ongoing capital requirements[43](index=43&type=chunk)[45](index=45&type=chunk) - Acquisition targets are primarily U.S. office properties in strong economic markets, focusing on single-tenant properties strategic to the tenant and properties leased to government agencies with high security needs[49](index=49&type=chunk) [Financing Policies and Other Information](index=13&type=section&id=Financing%20Policies%20and%20Other%20Information) OPI funds operations and growth through capital recycling, a **$750 million** credit facility, and debt/equity issuances, aiming for investment-grade ratings, while being externally managed by The RMR Group LLC and emphasizing sustainability - OPI's financing strategy involves using proceeds from its capital recycling program, its **$750.0 million** revolving credit facility, and debt/equity issuances to fund operations, acquisitions, and distributions, while aiming to maintain investment-grade ratings[60](index=60&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - The company has no employees; all personnel and services are provided by its external manager, The RMR Group LLC (RMR LLC)[65](index=65&type=chunk)[66](index=66&type=chunk) - As of December 31, 2020, **28 properties** (**18.2%** of total rentable square feet) were LEED® designated, and as of February 16, 2021, **31 properties** had been awarded ENERGY STAR certification[68](index=68&type=chunk)[69](index=69&type=chunk) [Material United States Federal Income Tax Considerations](index=16&type=section&id=Material%20United%20States%20Federal%20Income%20Tax%20Considerations) This section outlines the complex U.S. federal income tax rules for OPI as a REIT and its shareholders, detailing the stringent tests for REIT qualification and the tax implications of distributions - OPI has elected to be taxed as a REIT and believes it has operated in compliance with REIT qualification rules since its 2009 taxable year, generally not being subject to federal income tax on income distributed to shareholders[84](index=84&type=chunk)[85](index=85&type=chunk) - To maintain REIT status, OPI must annually satisfy two gross income tests (**75%** and **95%** from real estate-related sources) and several asset tests at the end of each quarter[105](index=105&type=chunk)[115](index=115&type=chunk) - OPI is required to distribute at least **90%** of its annual REIT taxable income (excluding net capital gains) to shareholders to maintain its REIT qualification[60](index=60&type=chunk)[120](index=120&type=chunk) - Distributions to non-corporate U.S. shareholders are generally not eligible for the preferential tax rates on qualified dividends but may be eligible for a deduction under Section 199A of the IRC for taxable years before 2026[85](index=85&type=chunk)[135](index=135&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business risks from the COVID-19 pandemic, tenant issues, and government budgetary pressures, alongside management and relationship risks due to its external manager, and financial and tax risks related to debt and REIT status - **Business Risks**: The COVID-19 pandemic may adversely affect tenants' ability to pay rent and reduce demand for office space; the company faces risks of non-renewal of leases, tenant bankruptcies, and dependence on single tenants; government budgetary pressures and a property concentration in the Washington, D.C. market also pose significant risks[179](index=179&type=chunk)[185](index=185&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[191](index=191&type=chunk) - **Management and Relationship Risks**: OPI is dependent on its external manager, RMR LLC, for all operations, creating potential conflicts of interest due to cross-ownership and management of other companies, with management agreements not negotiated at arm's length and containing substantial termination fees that could discourage a change of control[222](index=222&type=chunk)[224](index=224&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) - **Financial and Tax Risks**: REIT distribution requirements may limit the company's ability to retain cash for operations and growth; the company has significant debt, and failure to comply with covenants could trigger defaults; failure to maintain REIT tax status would have severe adverse consequences, including corporate-level taxation[196](index=196&type=chunk)[202](index=202&type=chunk)[245](index=245&type=chunk) - **Organizational and Securities Risks**: Ownership limitations (**9.8%**) and provisions in governing documents may deter a change in control; the value of the company's securities is subject to market conditions, including interest rate changes, and future issuances of debt or equity could dilute existing shareholders[234](index=234&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) [Properties](index=54&type=section&id=Item%202.%20Properties) As of December 31, 2020, OPI's portfolio included 181 wholly-owned properties across 34 states, totaling 24.9 million square feet with a **$3.6 billion** carrying value, plus interests in three joint venture properties, with some properties encumbered by mortgages Wholly Owned Properties by State (Top 5 by Annualized Rental Income) as of Dec 31, 2020 | State | Number of Properties | Undepreciated Carrying Value ($ thousands) | Annualized Rental Income ($ thousands) | | :--- | :--- | :--- | :--- | | Virginia | 26 | $498,308 | $71,088 | | California | 24 | $483,503 | $70,978 | | District of Columbia | 7 | $548,385 | $62,997 | | Texas | 16 | $260,241 | $48,206 | | Maryland | 14 | $255,011 | $37,847 | | **Grand Total (All States)** | **181** | **$3,577,232** | **$578,018** | - In addition to its wholly-owned portfolio, OPI has noncontrolling ownership interests (**51%** and **50%**) in three properties through two unconsolidated joint ventures[269](index=269&type=chunk) - As of year-end 2020, seven properties were encumbered by mortgages totaling **$170.8 million**[272](index=272&type=chunk) Part II [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes OPI's 2020 financial performance, covering property operations, capital recycling activities, a decline in rental income and net income due to dispositions, and strong liquidity, along with non-GAAP reconciliations and critical accounting estimates [Property Operations](index=56&type=section&id=Property%20Operations) As of December 31, 2020, OPI's portfolio occupancy was **91.2%**, with **1.97 million** square feet leased at a **6.9%** rent increase, and **$93.1 million** in capital expenditures, while the U.S. Government remained the largest tenant Occupancy Data Comparison | Metric | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | All Properties Percent Leased | 91.2% | 92.4% | | Comparable Properties Percent Leased | 92.1% | 93.3% | 2020 Leasing Activity | Metric | Value | | :--- | :--- | | Total Square Feet Leased | 1,965,000 | | Change in Rent vs. Prior Leases | +6.9% | | Weighted Average Lease Term | 7.3 years | | Total Leasing Costs & Concessions ($ millions) | $43.4 | 2020 Capital Expenditures ($ thousands) | Category | Amount | | :--- | :--- | | Lease related costs | $34,972 | | Building improvements | $41,280 | | Development, redevelopment and other | $16,858 | | **Total Capital Expenditures** | **$93,110** | - As of December 31, 2020, leases representing **16.1%** of leased square feet and **12.1%** of annualized rental income are scheduled to expire in 2021[297](index=297&type=chunk) [Acquisition, Disposition, and Financing Activities](index=61&type=section&id=Acquisition%2C%20Disposition%2C%20and%20Financing%20Activities) In 2020, OPI acquired two properties for **$46.6 million** and sold ten for **$110.5 million**, while issuing **$412 million** in new senior notes and repaying **$552 million** in existing debt - During 2020, OPI acquired two properties for an aggregate purchase price of **$46.6 million**[307](index=307&type=chunk) - The company sold 10 properties for an aggregate sales price of **$110.5 million** during 2020[310](index=310&type=chunk) - Key financing activities in 2020 included issuing **$412 million** in new senior unsecured notes and redeeming or repaying **$552 million** in existing senior and mortgage notes[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) [Results of Operations](index=63&type=section&id=Results%20of%20Operations) OPI's net income significantly decreased in 2020 to **$6.7 million** (**$0.14** per share) from **$30.3 million** (**$0.63** per share) in 2019, primarily due to a **$90.5 million** decline in rental income from property dispositions and lower gains on real estate sales Consolidated Results of Operations (Year Ended Dec 31, $ in thousands) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Rental Income | $587,919 | $678,404 | | Total Operating Expenses | $195,968 | $228,962 | | Net Operating Income (NOI) | $391,951 | $449,442 | | Gain on sale of real estate | $10,855 | $105,131 | | Interest Expense | ($108,303) | ($134,880) | | **Net Income** | **$6,678** | **$30,335** | | **Net Income per Share** | **$0.14** | **$0.63** | - The **$90.5 million** (**13.3%**) decrease in consolidated rental income was primarily due to property dispositions[323](index=323&type=chunk)[325](index=325&type=chunk) - Total operating expenses decreased by **$33.0 million** (**14.4%**), also mainly due to property sales, with utility expenses for comparable properties declining due to cost savings initiatives implemented during the COVID-19 pandemic[323](index=323&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk) [Non-GAAP Financial Measures](index=65&type=section&id=Non-GAAP%20Financial%20Measures) OPI's 2020 NOI decreased to **$392.0 million**, FFO to **$255.1 million** (**$5.30** per share), and Normalized FFO to **$259.2 million** (**$5.39** per share), reflecting property dispositions Reconciliation of Net Income to NOI ($ in thousands) | Line Item | 2020 | 2019 | | :--- | :--- | :--- | | Net income | $6,678 | $30,335 | | Adjustments (Depreciation, G&A, Interest, etc.) | $385,273 | $419,107 | | **NOI** | **$391,951** | **$449,442** | FFO and Normalized FFO Reconciliation ($ in thousands, except per share) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net Income | $6,678 | $30,335 | | Depreciation & Amortization | $256,369 | $295,788 | | Loss on Impairment | $2,954 | $22,255 | | (Gain) on Sale of Real Estate | ($10,855) | ($105,131) | | Loss on Equity Securities, net | $0 | $44,007 | | **FFO** | **$255,146** | **$287,254** | | FFO per share | $5.30 | $5.98 | | Adjustments | $4,071 | $1,451 | | **Normalized FFO** | **$259,217** | **$288,705** | | Normalized FFO per share | $5.39 | $6.01 | [Liquidity and Capital Resources](index=67&type=section&id=Liquidity%20and%20Capital%20Resources) OPI maintains strong liquidity through operating cash flow, property sales, and a fully available **$750 million** revolving credit facility, with net cash from operations increasing to **$233.6 million** in 2020 and no significant debt maturities until 2022 - Primary sources of liquidity are operating cash flows, property sales, and a **$750 million** revolving credit facility, which was fully available as of February 18, 2021[347](index=347&type=chunk)[348](index=348&type=chunk) Summary of Cash Flows ($ in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $233,628 | $215,329 | | Net Cash (Used in) Provided by Investing Activities | ($22,987) | $877,819 | | Net Cash Used in Financing Activities | ($254,482) | ($1,031,395) | - The company has no significant debt maturities until 2022, with **$625.5 million** due that year[348](index=348&type=chunk)[364](index=364&type=chunk) - As of December 31, 2020, the company was in compliance with all debt covenants under its credit agreement and senior note indentures[371](index=371&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) OPI's primary market risk is interest rate exposure, with **$2.24 billion** in fixed-rate debt as of December 31, 2020, and a floating-rate **$750 million** revolving credit facility, while monitoring the LIBOR phase-out Fixed Rate Debt Summary as of December 31, 2020 | Debt Type | Principal Balance ($ thousands) | Weighted Avg. Interest Rate | | :--- | :--- | :--- | | Senior unsecured notes | $2,072,000 | 4.78% | | Mortgage notes | $170,842 | 3.99% | | **Total** | **$2,242,842** | **4.72%** | - A hypothetical **1%** increase in interest rates would decrease the fair value of the company's fixed-rate debt by approximately **$110.5 million**[386](index=386&type=chunk) - The company had no floating-rate debt outstanding at year-end, but its **$750 million** revolving credit facility is exposed to LIBOR fluctuations, and the company is monitoring the planned phase-out of LIBOR[390](index=390&type=chunk)[395](index=395&type=chunk) [Controls and Procedures](index=75&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2020, management concluded that OPI's disclosure controls and procedures and internal control over financial reporting were effective, with no material changes during the fourth quarter - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[398](index=398&type=chunk) - Management's assessment, based on the COSO 2013 framework, concluded that the company's internal control over financial reporting was effective as of December 31, 2020[401](index=401&type=chunk) Part III [Directors, Executive Officers, Compensation, and Corporate Governance](index=76&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information for Items 10-14, covering directors, executive officers, compensation, and corporate governance, is incorporated by reference from the 2021 Proxy Statement, with **1,094,909** common shares available under the 2009 Incentive Share Award Plan as of year-end 2020 - Most information for Part III (Items 10, 11, 12, 13, and 14) is incorporated by reference from the company's definitive Proxy Statement for the 2021 Annual Meeting of Shareholders[407](index=407&type=chunk)[408](index=408&type=chunk)[411](index=411&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk) Equity Compensation Plan Information as of Dec 31, 2020 | Plan Category | Securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by securityholders | None | None | 1,094,909 | Part IV [Exhibits and Financial Statement Schedules](index=77&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section includes OPI's audited consolidated financial statements for 2020, with detailed notes on accounting policies, transactions, and related parties, along with an unqualified audit opinion from Deloitte & Touche LLP on both financial statements and internal controls [Financial Statements and Notes](index=80&type=section&id=Financial%20Statements%20and%20Notes) The audited financial statements for 2020 show total assets of **$3.95 billion**, total liabilities of **$2.34 billion**, and net income of **$6.7 million**, with detailed notes on debt, management agreements, and capital structure Consolidated Balance Sheet Summary (as of Dec 31, $ in thousands) | Account | 2020 | 2019 | | :--- | :--- | :--- | | Total Real Estate Properties, net | $3,070,229 | $3,105,575 | | **Total Assets** | **$3,946,436** | **$4,193,136** | | Total Debt, net | $2,202,971 | $2,327,325 | | **Total Liabilities** | **$2,337,044** | **$2,487,382** | | **Total Shareholders' Equity** | **$1,609,392** | **$1,705,754** | Consolidated Income Statement Summary (Year Ended Dec 31, $ in thousands) | Account | 2020 | 2019 | | :--- | :--- | :--- | | Rental Income | $587,919 | $678,404 | | Total Expenses | $479,163 | $574,512 | | **Net Income** | **$6,678** | **$30,335** | - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion on the 2020 financial statements and the effectiveness of internal control over financial reporting[426](index=426&type=chunk)[437](index=437&type=chunk) - The critical audit matter identified was the impairment of real estate properties, due to the significant management estimates and assumptions required to evaluate recoverability[431](index=431&type=chunk)[433](index=433&type=chunk)

INVESTOR PRESENTATION NOVEMBER 2020 OFFICE PROPERTIES INCOME TRUST WARNING REGARDING FORWARD LOOKING STATEMENTS, DISCLAIMERS AND NON-GAAP FINANCIAL MEASURES This presentation 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 expressi ...

Office Properties Income Trust (NASDAQ:OPI) Q3 2020 Earnings Conference Call October 30, 2020 10:00 AM ET Company Participants Olivia Snyder – Manager-Investor Relations David Blackman – President and Chief Executive Officer Matt Brown – Chief Financial Officer and Treasurer Chris Bilotto – Vice President and Chief Operating Officer Conference Call Participants Bryan Maher – B. Riley FBR Vikram Malhotra – Morgan Stanley Venkat Kommineni – Mizuho Michael Carroll – RBC Capital Markets Operator Good morning an ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-34364 OFFICE PROPERTIES INCOME TRUST | Title of Each Class | Trading Symbol(s) | Name Of Each Exchange On Which Registered | | --- | --- | --- | | Common ...

Office Properties Income Trust (NASDAQ:OPI) Q2 2020 Earnings Conference Call July 30, 2020 10:00 AM ET Company Participants Olivia Snyder - Manager of Investor Relations David Blackman - President & Chief Executive Officer Chris Bilotto - Vice President & Chief Operating Officer Matt Brown - Chief Financial Officer & Treasurer Conference Call Participants Bryan Maher - B. Riley FBR Adam Gabalski - Morgan Stanley Michael Carroll - RBC Capital Markets Operator Hello, and welcome to the Office Properties Incom ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-34364 OFFICE PROPERTIES INCOME TRUST (Exact Name of Registrant as Specified in Its Charter) Maryland 26-4273474 (State or Other Jurisdiction of Incorporation ...