Assets Under Management of $28.5 Billion, a $1.6 Billion Increase
from Last Year
Net Income Per Share for the Fourth Quarter of $0.31 Includes $0.13
Per Share of One Time Costs Associated with Growth Initiatives
NEWTON, Mass.--(BUSINESS WIRE)--
The RMR Group Inc. (Nasdaq: RMR) today announced its financial results
for the quarter and fiscal year ended September 30, 2017.
Adam Portnoy, President and Chief Executive Officer, made the following
statement regarding the fourth quarter fiscal 2017 results:
“One of our strategic goals for fiscal 2017 was to begin the process
of diversifying RMR's revenues. In September 2017, we completed the $62
million initial public offering for Tremont Mortgage Trust, a commercial
mortgage REIT that is managed by an SEC registered investment advisor
subsidiary of RMR. During the quarter, we also took steps to grow our
real estate securities management business. In September 2017, the RMR
Real Estate Income Fund completed a rights offering that raised $45
million (or approximately $75 million on a levered basis). Collectively,
these initiatives resulted in RMR incurring approximately $6.7 million,
or $0.13 per share, of one time transaction costs during the fourth
quarter.
Fiscal 2018 has also started strong, as our client companies have
publicly reported over $1.5 billion in completed acquisitions, the
majority of which resulted from Government Properties Income Trust's
acquisition of First Potomac Realty Trust.”
Fourth Quarter Fiscal 2017 Highlights:
-
As of September 30, 2017, The RMR Group Inc. had approximately $28.5
billion of total assets under management, compared to total assets
under management of $27.9 billion as of June 30, 2017 and $26.9
billion as of September 30, 2016.
-
The RMR Group Inc. earned management services revenues for the three
months ended September 30, 2017 and 2016 from the following sources
(dollars in thousands):
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
2017
|
|
2016
|
|
Managed Equity REITs (1)
|
|
$
|
36,845
|
|
83.3
|
%
|
|
$
|
36,719
|
|
84.0
|
%
|
|
Managed Operators (2)
|
|
|
6,779
|
|
15.3
|
%
|
|
|
6,636
|
|
15.2
|
%
|
|
Other
|
|
|
634
|
|
1.4
|
%
|
|
|
365
|
|
0.8
|
%
|
|
Total Management Services Revenues
|
|
$
|
44,258
|
|
100.0
|
%
|
|
$
|
43,720
|
|
100.0
|
%
|
|
(1)
|
|
Managed Equity REITs collectively refers to: Government Properties
Income Trust (GOV), Hospitality Properties Trust (HPT), Select
Income REIT (SIR) and Senior Housing Properties Trust (SNH).
|
|
|
|
|
|
(2)
|
|
Managed Operators collectively refers to: Five Star Senior Living
Inc. (FVE), Sonesta International Hotels Corporation and
TravelCenters of America LLC (TA).
|
|
|
|
|
-
For the three months ended September 30, 2017, net income was $13.1
million and net income attributable to The RMR Group Inc. was $5.0
million, or $0.31 per share, compared to net income of $18.8 million
and net income attributable to The RMR Group Inc. of $7.4 million, or
$0.46 per share, for the three months ended September 30, 2016.
-
For the three months ended September 30, 2017, Adjusted EBITDA was
$27.1 million and Adjusted EBITDA Margin was 56.8%, compared to
Adjusted EBITDA of $27.4 million and Adjusted EBITDA Margin of 58.3%
for the three months ended September 30, 2016. Adjusted EBITDA Margin
equals Adjusted EBITDA divided by the contractual management and
advisory fees earned from The RMR Group LLC’s client companies. These
contractual management and advisory fees are calculated pursuant to
The RMR Group LLC’s contracts with its client companies and do not
deduct non-cash asset amortization recognized in accordance with U.S.
generally accepted accounting principles, or GAAP, as a reduction to
management services revenues and do not include incentive business
management fees earned, if any, which may not be recurring.
-
During the fiscal fourth quarter, Tremont Mortgage Trust, or TRMT,
completed a $62.0 million initial public offering, or IPO. TRMT is a
commercial mortgage REIT that principally focuses on originating and
investing in floating rate, first mortgage loans secured by middle
market and transitional commercial real estate. Also during the
quarter, the RMR Real Estate Income Fund, or RIF, completed a $45.0
million rights offering, which will increase RIF's total managed
assets by approximately $75.0 million after including the effects of
additional leverage. RIF is a publicly traded closed end registered
investment company that invests in securities of unaffiliated real
estate companies, including REITs. TRMT and RIF are managed by
separate SEC registered investment advisor subsidiaries of RMR. RMR
incurred approximately $6.7 million, or $0.13 per share, of one time
transaction costs associated with these capital raising activities for
TRMT and RIF during the quarter. In connection with the IPO of TRMT,
RMR also acquired 600,000 common shares of TRMT for $12.0 million.
-
As of September 30, 2017, The RMR Group Inc. had cash and cash
equivalents of $108.6 million and no indebtedness.
Summary Results for the Quarter Ended September 30, 2017:
Total revenues for the quarter ended September 30, 2017 increased 0.7%
to $56.6 million from $56.3 million for the same period in 2016. Net
income attributable to The RMR Group Inc. for the quarter ended
September 30, 2017 was $5.0 million, or $0.31 per share, compared to net
income attributable to The RMR Group Inc. of $7.4 million, or $0.46 per
share, for the quarter ended September 30, 2016. Net income attributable
to The RMR Group Inc. for the quarter ended September 30, 2017 includes
$6.7 million, or $0.13 per share, of transaction costs related to the
TRMT and RIF transactions described above.
Net income attributable to The RMR Group Inc. for the quarter ended
September 30, 2016 included $0.3 million, or $0.01 per share, of
transaction and acquisition related costs.
Adjusted EBITDA for the quarter ended September 30, 2017 was $27.1
million compared to Adjusted EBITDA of $27.4 million for the quarter
ended September 30, 2016.
Summary Results for the Fiscal Year Ended September 30, 2017:
Total revenues for the fiscal year ended September 30, 2017 were $271.7
million, including $52.4 million of incentive business management fees,
compared to $266.9 million, including $62.3 million of incentive
business management fees, for the fiscal year ended September 30, 2016.
Net income attributable to The RMR Group Inc. for the fiscal year ended
September 30, 2017 was $42.3 million, or $2.63 per share, compared to
$37.2 million, or $2.33 per share, for the fiscal year ended
September 30, 2016. Adjusted EBITDA for the fiscal year ended
September 30, 2017 was $107.2 million compared to $100.1 million for the
fiscal year ended September 30, 2016.
Reconciliations to GAAP:
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP
financial measures. Reconciliations of net income determined in
accordance with GAAP to EBITDA and Adjusted EBITDA as well as
calculations of Adjusted EBITDA Margin appear later in this press
release. Also, comparisons of The RMR Group Inc.'s revenues, EBITDA,
Adjusted EBITDA, Adjusted EBITDA Margin, net income and net income
attributable to The RMR Group Inc. for the three months and fiscal year
ended September 30, 2017 to the three months and fiscal year ended
September 30, 2016 are presented later in this press release.
Total Assets Under Management:
The calculation of total assets under management includes: (i) the gross
book value of real estate and related assets, excluding depreciation,
amortization, impairment charges or other non-cash reserves, of the
Managed Equity REITs and ABP Trust, plus (ii) the gross book value of
real estate assets, property and equipment of the Managed Operators,
excluding depreciation, amortization, impairment charges or other
non-cash reserves, plus (iii) the fair value of investments of
Affiliates Insurance Company, the managed assets of RMR Real Estate
Income Fund and the equity of Tremont Mortgage Trust, plus (iv) the
contributed capital and outstanding principal of loans serviced for
certain private clients. This calculation of total assets under
management may include amounts in respect of the Managed Equity REITs
that are higher than the calculations of assets under management used
for purposes of calculating fees under the terms of the business
management agreements, which are based, in part, upon the lesser of the
historical cost of real estate assets or total market capitalization.
For information on the calculation of assets under management of the
Managed Equity REITs for purposes of the fee provisions of the business
management agreements, see The RMR Group Inc.'s Annual Reports on Form
10-K filed with the Securities and Exchange Commission, or SEC. The RMR
Group Inc.'s SEC filings are available at the SEC website: www.sec.gov.
Conference Call:
At 10:00 a.m. Eastern Time this morning, President and Chief Executive
Officer, Adam Portnoy, and Chief Financial Officer and Treasurer, Matt
Jordan, will host a conference call to discuss The RMR Group Inc.’s
fiscal fourth quarter and fiscal year ended September 30, 2017 financial
results.
The conference call telephone number is (877) 329-4297. Participants
calling from outside the United States and Canada should dial (412)
317-5435. No pass code is necessary to access the call from either
number. Participants should dial in about 15 minutes prior to the
scheduled start of the call. A replay of the conference call will be
available through 11:59 p.m. Eastern Time on Tuesday, December 19, 2017.
To access the replay, dial (412) 317-0088. The replay pass code is
10113386. The transcription, recording and retransmission in any way
of The RMR Group Inc.'s fiscal fourth quarter ended September 30, 2017
financial results conference call are strictly prohibited without the
prior written consent of The RMR Group Inc.
The RMR Group Inc. is a holding company, and substantially all of its
business is conducted by its majority-owned subsidiary, The RMR Group
LLC. The RMR Group LLC is an alternative asset management company that
primarily provides management services to publicly traded REITs and real
estate operating companies. As of September 30, 2017, The RMR Group LLC
had approximately $28.5 billion of total assets under management,
including more than 1,400 properties, and employed over 475 real estate
professionals in more than 35 offices throughout the United States; the
companies managed by The RMR Group LLC collectively had over 53,000
employees and total revenues for the 12 months ended September 30, 2017
of over $11 billion. The RMR Group Inc. is headquartered in Newton,
Massachusetts.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND
OTHER SECURITIES LAWS. FORWARD LOOKING STATEMENTS CAN BE IDENTIFIED BY
USE OF WORDS SUCH AS “OUTLOOK”, “BELIEVE”, “EXPECT”, “POTENTIAL”,
“WILL”, “MAY”, “ESTIMATE”, “ANTICIPATE”, AND DERIVATIVES OR NEGATIVES OF
SUCH WORDS OR SIMILAR WORDS. FORWARD LOOKING STATEMENTS IN THIS PRESS
RELEASE ARE BASED UPON PRESENT BELIEFS OR EXPECTATIONS. HOWEVER, FORWARD
LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE NOT GUARANTEED TO OCCUR
AND MAY NOT OCCUR FOR VARIOUS REASONS, INCLUDING SOME REASONS BEYOND THE
RMR GROUP INC.'S CONTROL. FOR EXAMPLE:
-
THIS PRESS RELEASE STATES THAT ONE OF THE RMR GROUP INC.'S STRATEGIC
GOALS FOR 2017 WAS TO BEGIN THE PROCESS OF DIVERSIFYING ITS REVENUES.
THIS PRESS RELEASE ALSO REFERS TO THE COMPLETION OF AN IPO FOR TRMT
AND THE COMPLETION OF A RIGHTS OFFERING BY RIF. THESE STATEMENTS MAY
IMPLY THAT THESE TRANSACTIONS AND OTHER EFFORTS BY THE RMR GROUP INC.
WILL RESULT IN THE RMR GROUP INC. DIVERSIFYING ITS REVENUES. HOWEVER,
THERE CAN BE NO ASSURANCE THAT ANY OF THESE TRANSACTIONS WILL RESULT
IN THE RMR GROUP INC. DIVERSIFYING ITS REVENUES. IN FACT, ONE OR MORE
OF THE RMR GROUP INC.'S EXISTING CLIENT CONTRACTS MAY BE TERMINATED
AND THE RMR GROUP INC.'S REVENUES MAY BECOME LESS DIVERSE THAN THEY
ARE AT PRESENT; AND
-
THIS PRESS RELEASE STATES THAT THE RMR GROUP INC.'S CLIENT COMPANIES
HAVE PUBLICLY REPORTED OVER $1.5 BILLION IN COMPLETED ACQUISITIONS,
THE MAJORITY OF WHICH RESULTED FROM GOV'S ACQUISITION OF FIRST POTOMAC
REALTY TRUST, OR FPO. THIS STATEMENT MAY IMPLY THAT THE RMR GROUP INC.
EXPECTS THAT THE BUSINESS MANAGEMENT FEES AND PROPERTY MANAGEMENT FEES
IT EARNS FROM GOV IN THE FUTURE MAY INCREASE AS A RESULT OF GOV'S
ACQUISITION OF FPO. HOWEVER, THE RMR GROUP INC.'S ABILITY TO REALIZE
INCREASED EARNINGS FROM GOV AS A RESULT OF ITS ACQUISITION OF FPO WILL
DEPEND ON GOV’S ABILITY TO GROW AND MAINTAIN ITS MARKET
CAPITALIZATION, BUSINESS AND SHAREHOLDER RETURNS AND ON THE RMR GROUP
INC.'S ABILITY TO PROVIDE SERVICES PROFITABLY. MOREOVER, DECLINES IN
EARNINGS FROM OTHER CLIENTS OR FOR OTHER REASONS MAY EXCEED ANY
ADDITIONAL EARNINGS THE RMR GROUP INC. MAY REALIZE AS A RESULT OF
GOV’S ACQUISITION OF FPO.
THE INFORMATION CONTAINED IN THE RMR GROUP INC.’S FILINGS WITH THE SEC,
INCLUDING UNDER THE CAPTION “RISK FACTORS” IN THE RMR GROUP INC.’S
PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES IMPORTANT FACTORS
THAT COULD CAUSE DIFFERENCES FROM THE FORWARD LOOKING STATEMENTS IN THIS
PRESS RELEASE. THE RMR GROUP INC.’S FILINGS WITH THE SEC ARE AVAILABLE
ON ITS WEBSITE AT WWW.SEC.GOV.
EXCEPT AS REQUIRED BY LAW, THE RMR GROUP INC. UNDERTAKES NO OBLIGATION
TO UPDATE ANY FORWARD LOOKING STATEMENT, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE.
|
|
|
The RMR Group Inc.
|
|
Consolidated Statements of Income
|
|
(amounts in thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Fiscal Year Ended September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Management services (1)
|
|
$
|
44,258
|
|
|
$
|
43,720
|
|
|
$
|
227,294
|
|
|
$
|
226,660
|
|
|
Reimbursable payroll related and other costs
|
|
|
11,309
|
|
|
|
11,667
|
|
|
|
40,332
|
|
|
|
37,660
|
|
|
Advisory services
|
|
|
1,069
|
|
|
|
879
|
|
|
|
4,102
|
|
|
|
2,620
|
|
|
Total revenues
|
|
|
56,636
|
|
|
|
56,266
|
|
|
|
271,728
|
|
|
|
266,940
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
27,203
|
|
|
|
26,401
|
|
|
|
99,753
|
|
|
|
91,985
|
|
|
Separation costs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,358
|
|
|
General and administrative
|
|
|
6,116
|
|
|
|
5,693
|
|
|
|
25,189
|
|
|
|
23,163
|
|
|
Transaction and acquisition related costs
|
|
|
6,734
|
|
|
|
326
|
|
|
|
9,187
|
|
|
|
1,966
|
|
|
Depreciation and amortization
|
|
|
488
|
|
|
|
435
|
|
|
|
2,038
|
|
|
|
1,768
|
|
|
Total expenses
|
|
|
40,541
|
|
|
|
32,855
|
|
|
|
136,167
|
|
|
|
120,240
|
|
|
Operating income
|
|
|
16,095
|
|
|
|
23,411
|
|
|
|
135,561
|
|
|
|
146,700
|
|
|
Interest and other income
|
|
|
506
|
|
|
|
90
|
|
|
|
1,565
|
|
|
|
234
|
|
|
Income before income tax expense and equity in losses of investees
|
|
|
16,601
|
|
|
|
23,501
|
|
|
|
137,126
|
|
|
|
146,934
|
|
|
Income tax expense
|
|
|
(3,440
|
)
|
|
|
(4,669
|
)
|
|
|
(28,251
|
)
|
|
|
(24,573
|
)
|
|
Equity in losses of investees
|
|
|
(45
|
)
|
|
|
—
|
|
|
|
(206
|
)
|
|
|
—
|
|
|
Net income
|
|
|
13,116
|
|
|
|
18,832
|
|
|
|
108,669
|
|
|
|
122,361
|
|
|
Net income attributable to noncontrolling interest
|
|
|
(8,073
|
)
|
|
|
(11,458
|
)
|
|
|
(66,376
|
)
|
|
|
(85,121
|
)
|
|
Net income attributable to The RMR Group Inc.
|
|
$
|
5,043
|
|
|
$
|
7,374
|
|
|
$
|
42,293
|
|
|
$
|
37,240
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic
|
|
|
16,041
|
|
|
|
16,010
|
|
|
|
16,032
|
|
|
|
16,005
|
|
|
Weighted average common shares outstanding - diluted
|
|
|
16,062
|
|
|
|
16,010
|
|
|
|
16,048
|
|
|
|
16,005
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to The RMR Group Inc. per common share -
basic and diluted
|
|
$
|
0.31
|
|
|
$
|
0.46
|
|
|
$
|
2.63
|
|
|
$
|
2.33
|
|
|
(1)
|
|
Includes business management fees earned from the Managed Equity
REITs based upon the lower of (i) the average historical cost of
each REIT’s properties and (ii) each REIT’s average market
capitalization. The following table presents for each Managed Equity
REIT: a summary of its primary strategy and the lesser of the
historical cost of its assets under management and its market
capitalization as of September 30, 2017 and 2016, as applicable:
|
|
|
|
|
|
|
|
|
|
|
|
Lesser of Historical Cost of Assets Under Management
|
|
|
|
|
|
|
|
or Market Capitalization (a)
|
|
|
|
|
|
|
|
As of September 30,
|
|
REIT
|
|
|
|
Primary Strategy
|
|
2017
|
|
2016
|
|
GOV
|
|
|
|
Office buildings majority leased to government tenants
|
|
$
|
2,221,945
|
|
$
|
2,071,050
|
|
HPT
|
|
|
|
Hotels and travel centers
|
|
|
8,740,307
|
|
|
8,330,553
|
|
SIR
|
|
|
|
Lands and properties primarily leased to single tenants
|
|
|
4,575,215
|
|
|
4,743,774
|
|
SNH
|
|
|
|
Healthcare, senior living and medical office buildings
|
|
|
8,233,984
|
|
|
8,142,327
|
|
|
|
|
|
|
|
$
|
23,771,451
|
|
$
|
23,287,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
The basis on which The RMR Group Inc. calculated its base business
management fees for the three months and fiscal years ended
September 30, 2017 and 2016 may differ from the basis at the end of
the periods presented in this table. As of September 30, 2017, the
market capitalization was lower than the historical costs of assets
under management for HPT, SIR and SNH; the historical costs of
assets under management for HPT, SIR and SNH as of September 30,
2017, were $9,919,649, $4,884,230 and $8,321,575, respectively. For
GOV, the historical cost of assets under management was lower than
its market capitalization of $3,962,327 as of September 30, 2017.
|
|
|
|
|
|
|
|
The RMR Group Inc.
|
|
Reconciliation of EBITDA and Adjusted EBITDA and Calculation of
Adjusted EBITDA Margin (1)
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Fiscal Year Ended September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Reconciliation of EBITDA and Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
13,116
|
|
|
$
|
18,832
|
|
|
$
|
108,669
|
|
|
$
|
122,361
|
|
|
Plus: income tax expense
|
|
|
3,440
|
|
|
|
4,669
|
|
|
|
28,251
|
|
|
|
24,573
|
|
|
Plus: depreciation and amortization
|
|
|
488
|
|
|
|
435
|
|
|
|
2,038
|
|
|
|
1,768
|
|
|
EBITDA
|
|
|
17,044
|
|
|
|
23,936
|
|
|
|
138,958
|
|
|
|
148,702
|
|
|
Plus: other asset amortization
|
|
|
2,354
|
|
|
|
2,354
|
|
|
|
9,416
|
|
|
|
9,416
|
|
|
Plus: operating expenses paid in The RMR Group Inc.'s common shares
|
|
|
949
|
|
|
|
758
|
|
|
|
1,970
|
|
|
|
933
|
|
|
Plus: separation costs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,358
|
|
|
Plus: transaction costs related to the TRMT IPO and RIF rights
offering
|
|
|
6,734
|
|
|
|
—
|
|
|
|
8,850
|
|
|
|
—
|
|
|
Plus: other transaction and acquisition related costs
|
|
|
—
|
|
|
|
326
|
|
|
|
337
|
|
|
|
1,966
|
|
|
Plus: business email compromise fraud costs
|
|
|
89
|
|
|
|
—
|
|
|
|
774
|
|
|
|
—
|
|
|
Less: certain other net adjustments
|
|
|
(77
|
)
|
|
|
—
|
|
|
|
(681
|
)
|
|
|
—
|
|
|
Less: incentive business management fees earned
|
|
|
—
|
|
|
|
—
|
|
|
|
(52,407
|
)
|
|
|
(62,263
|
)
|
|
Adjusted EBITDA
|
|
$
|
27,093
|
|
|
$
|
27,374
|
|
|
$
|
107,217
|
|
|
$
|
100,112
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Adjusted EBITDA Margin:
|
|
|
|
|
|
|
|
|
|
Contractual management and advisory fees (excluding anyincentive
business management fees)(2)
|
|
$
|
47,681
|
|
|
$
|
46,953
|
|
|
$
|
188,405
|
|
|
$
|
176,433
|
|
|
Adjusted EBITDA
|
|
$
|
27,093
|
|
|
$
|
27,374
|
|
|
$
|
107,217
|
|
|
$
|
100,112
|
|
|
Adjusted EBITDA Margin
|
|
|
56.8
|
%
|
|
|
58.3
|
%
|
|
|
56.9
|
%
|
|
|
56.7
|
%
|
|
(1)
|
|
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP
financial measures calculated as presented in the tables above. The
RMR Group Inc. considers EBITDA, Adjusted EBITDA and Adjusted EBITDA
Margin to be appropriate supplemental measures of its operating
performance, along with net income, net income attributable to The
RMR Group Inc. and operating income. The RMR Group Inc. believes
that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin provide
useful information to investors because by excluding the effects of
certain amounts, such as income tax, depreciation and amortization,
incentive business management fees, other asset amortization,
operating expenses paid in The RMR Group Inc.'s common shares,
separation costs, transaction costs related to the TRMT IPO and RIF
rights offering, other transaction and acquisition related costs,
business email compromise fraud costs and certain other net
adjustments, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin may
facilitate a comparison of current operating performance with The
RMR Group Inc.’s historical operating performance and with the
performance of other asset management businesses. In addition, The
RMR Group Inc. believes that providing Adjusted EBITDA Margin may
help investors assess The RMR Group Inc.’s performance of its
business by providing the margin that Adjusted EBITDA represents to
its contractual management and advisory fees (excluding any
incentive business management fees). EBITDA, Adjusted EBITDA and
Adjusted EBITDA Margin do not represent cash generated by operating
activities in accordance with GAAP and should not be considered as
alternatives to net income, net income attributable to The RMR Group
Inc. or operating income as an indicator of The RMR Group Inc.’s
financial performance or as a measure of The RMR Group Inc.’s
liquidity. These measures should be considered in conjunction with
net income, net income attributable to The RMR Group Inc. or
operating income as presented in The RMR Group Inc.'s consolidated
statements of income. Also, other asset management businesses may
calculate EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
differently than The RMR Group Inc. does.
|
|
|
|
|
|
(2)
|
|
These contractual management fees are the base business management
fees, property management fees and advisory fees The RMR Group Inc.
earns pursuant to its management and investment advisory agreements
with its client companies. These amounts are calculated pursuant to
the contractual formulas and do not deduct other asset amortization
of $2,354 for each of the three months ended September 30, 2017 and
2016 and $9,416 for each of the fiscal years ended September 30,
2017 and 2016, required to be recognized as a reduction to
management services revenues in accordance with GAAP and do not
include the incentive business management fees of $52,407 and
$62,263 that The RMR Group Inc. recognized under GAAP pursuant to
such contracts during the fiscal years ended September 30, 2017 and
2016, respectively, which were earned for the calendar years 2016
and 2015, respectively.
|
|
|
|
|
|
|
|
The RMR Group Inc.
|
|
Consolidated Balance Sheets
|
|
(dollars in thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
September 30,
|
|
|
|
2017
|
|
2016
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
108,640
|
|
|
$
|
65,833
|
|
|
Due from related parties
|
|
|
25,161
|
|
|
|
24,862
|
|
|
Prepaid and other current assets
|
|
|
7,092
|
|
|
|
4,690
|
|
|
Total current assets
|
|
|
140,893
|
|
|
|
95,385
|
|
|
|
|
|
|
|
|
Furniture and equipment
|
|
|
4,800
|
|
|
|
5,024
|
|
|
Leasehold improvements
|
|
|
1,094
|
|
|
|
1,077
|
|
|
Capitalized software costs
|
|
|
1,876
|
|
|
|
4,250
|
|
|
Total property and equipment
|
|
|
7,770
|
|
|
|
10,351
|
|
|
Accumulated depreciation
|
|
|
(4,494
|
)
|
|
|
(6,549
|
)
|
|
|
|
|
3,276
|
|
|
|
3,802
|
|
|
Due from related parties, net of current portion
|
|
|
7,551
|
|
|
|
7,754
|
|
|
Equity method investments
|
|
|
12,162
|
|
|
|
—
|
|
|
Goodwill
|
|
|
1,859
|
|
|
|
2,295
|
|
|
Intangible assets, net of amortization
|
|
|
462
|
|
|
|
1,085
|
|
|
Deferred tax asset
|
|
|
45,541
|
|
|
|
45,819
|
|
|
Other assets, net of amortization
|
|
|
171,975
|
|
|
|
181,391
|
|
|
Total assets
|
|
$
|
383,719
|
|
|
$
|
337,531
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable, accrued expenses and deposits
|
|
$
|
26,414
|
|
|
$
|
20,579
|
|
|
Total current liabilities
|
|
|
26,414
|
|
|
|
20,579
|
|
|
Long term portion of deferred rent payable, net of current portion
|
|
|
1,028
|
|
|
|
778
|
|
|
Amounts due pursuant to tax receivable agreement, net of current
portion
|
|
|
59,063
|
|
|
|
62,029
|
|
|
Employer compensation liability, net of current portion
|
|
|
7,551
|
|
|
|
7,754
|
|
|
Total liabilities
|
|
|
94,056
|
|
|
|
91,140
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Class A common stock, $0.001 par value; 31,600,000 shares
authorized; 15,164,066 and 15,082,432 shares issued and
outstanding, respectively
|
|
|
15
|
|
|
|
15
|
|
|
Class B-1 common stock, $0.001 par value; 1,000,000 shares
authorized, issued and outstanding
|
|
|
1
|
|
|
|
1
|
|
|
Class B-2 common stock, $0.001 par value; 15,000,000 shares
authorized, issued and outstanding
|
|
|
15
|
|
|
|
15
|
|
|
Additional paid in capital
|
|
|
95,878
|
|
|
|
94,266
|
|
|
Retained earnings
|
|
|
86,836
|
|
|
|
44,543
|
|
|
Cumulative other comprehensive income
|
|
|
84
|
|
|
|
83
|
|
|
Cumulative common distributions
|
|
|
(33,298
|
)
|
|
|
(17,209
|
)
|
|
Total shareholders’ equity
|
|
|
149,531
|
|
|
|
121,714
|
|
|
Noncontrolling interest
|
|
|
140,132
|
|
|
|
124,677
|
|
|
Total equity
|
|
|
289,663
|
|
|
|
246,391
|
|
|
Total liabilities and equity
|
|
$
|
383,719
|
|
|
$
|
337,531
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171212005468/en/
Source: The RMR Group Inc.