YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, SIR DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Select Income REIT
Consolidated Statements of Income
(amounts in thousands, except per share data)
(unaudited)
       
Three Months Ended March 31,
 
2012   2011
 
Revenues

Rental income

 
$ 24,074 $ 23,737

Tenant reimbursements and other income

 

 
  3,513     4,043

Total revenues

 
27,587 27,780
 
Expenses

Real estate taxes

 
3,641 3,603

Other operating expenses

 
1,777 2,532

Depreciation and amortization

 
2,773 2,712

General and administrative

 
  1,404     1,456

Total expenses

 
  9,595     10,303
 
Operating income 17,992 17,477
 

Interest expense (including amortization of deferred financing

  fees of $53 and $0, respectively)

 
(337 ) -
 

 
   
Net income $ 17,655   $ 17,477
 
Weighted average common shares outstanding   13,205     -
 
Net income per common share $ 1.34   $ -
 
 
Select Income REIT
Funds from Operations
(amounts in thousands, except per share data)
(unaudited)
       
For the Three Months Ended
  3/31/2012       3/31/2011
 
Net income $ 17,655 $ 17,477
Plus: depreciation and amortization   2,773   2,712
FFO (1)   20,428   20,189
 
 

(1) SIR calculates FFO as shown above. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or NAREIT, which, as applicable to SIR, is net income, calculated in accordance with GAAP, plus real estate depreciation and amortization. SIR considers FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. SIR believes that FFO provides useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO can facilitate a comparison of operating performances between periods. FFO is among the factors considered by SIR’s Board of Trustees when determining the amount of distributions, if any, to make to shareholders. Other factors include, but are not limited to, requirements to maintain SIR’s status as a REIT, limitations in SIR’s revolving credit facility, the availability of debt and equity capital to SIR and SIR’s expectation of its future capital requirements and operating performance. FFO does not represent cash generated by operating activities in accordance with GAAP and should not be considered as an alternative to net income, operating income or cash flow from operating activities, determined in accordance with GAAP, or as an indicator of SIR’s financial performance or liquidity, nor is this measure necessarily indicative of sufficient cash flow to fund all of SIR’s needs. SIR believes that FFO may facilitate an understanding of SIR’s consolidated historical operating results. FFO should be considered in conjunction with net income, operating income and cash flow from operating activities as presented in SIR’s Consolidated Statements of Income and Consolidated Statements of Cash Flows. Other REITs and real estate companies may calculate FFO differently than SIR.
Select Income REIT
Consolidated Balance Sheets
(amounts in thousands, except share data)
(unaudited)
       

 
     

 

March 31,2012

December 31,2011
 

ASSETS
 
 
Real estate properties:
Land $ 614,702 $ 614,702
Buildings and improvements   292,850     292,634  
907,552 907,336
Accumulated depreciation   (38,189 )   (36,240 )
869,363 871,096
 
Acquired real estate leases, net 43,111 44,333
Cash and cash equivalents 18,358 -
Rents receivable, net 31,917 35,024
Deferred leasing costs, net 3,571 3,418
Deferred financing costs, net 4,116 -
Due from related persons 1,095 -
Other assets, net   3,698     661  
Total assets $ 975,229   $ 954,532  
 

LIABILITIES AND SHAREHOLDERS' EQUITY
 
Revolving credit facility $ 227,000 $ -
Accounts payable and accrued expenses 15,852 14,217
Assumed real estate lease obligations, net 20,582 21,005
Rents collected in advance 6,397 6,229
Security deposits   8,126     8,281  
Total liabilities   277,957     49,732  
 
Commitments and contingencies
 
Shareholders' equity:
Common shares of beneficial interest, $0.01 par value:

50,000,000 shares authorized, 31,200,000 and 1,000  shares issued and outstanding, respectively
312 -
Additional paid in capital 693,928 -
Cumulative net income 3,032 -
Ownership Interest   -     904,800  
Total shareholders' equity   697,272     904,800  
 
Total liabilities and shareholders' equity $ 975,229   $ 954,532  

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