INVESTOR PRESENTATION May 2020 1
WARNING REGARDING FORWARD-LOOKING STATEMENTS AND DISCLAIMERS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Our forward-looking statements reflect our current views, intents and expectations with respect to, among other things, our operations and financial performance. Our forward-looking statements can be identified by the use of words such as “outlook,” “believe,” “expect,” “potential,” “will,” “may,” “estimate,” “anticipate” and derivatives or negatives of such words or similar words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be factors that could cause actual outcomes or results to differ materially from those stated or implied in these statements. We believe these factors include, but are not limited to the following: a) the impact of the novel coronavirus (“COVID-19”) pandemic and the resulting market disruptions on us and our client companies; b) substantially all our revenues are derived from services to a limited number of client companies; c) our revenues are highly variable; d) changing market conditions that may adversely impact our client companies and our business with them; e) potential terminations of our management agreements with our client companies; f) our ability to expand our business depends upon the growth and performance of our client companies and our ability to obtain or create new clients for our business and is often dependent upon circumstances beyond our control; g) the ability of our client companies to operate their businesses profitably and to grow and increase their market capitalizations and total shareholder returns; h) litigation risks; i) risks related to acquisitions, dispositions and other activities by or among our client companies; j) risks related to potential impairment of our equity investments; k) allegations, even if untrue, of any conflicts of interest arising from our management activities; l) our ability to retain the services of our managing directors and other key personnel; and m) risks associated with and costs of compliance with laws and regulations, including securities regulations, exchange listing standards and other laws and regulations affecting public companies. We have based our forward-looking statements on our current expectations about future events that we believe may affect our business, financial condition and results of operations. This presentation also includes non-GAAP financial measures. You can find our presentations of the most directly comparable GAAP measures and our reconciliations in the appendix. In addition, this presentation contains certain annualized financial information, whichis calculated using certain assumptions and estimates based on currently available information, and is not necessarily representative of what actual results would be for the period. See note (3) to the reconciliation of non-GAAP financial measures in the appendix. Because forward- looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, our forward-looking statements should not be relied on as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected or implied in our forward-looking statements. The matters discussed in this warning should not be construed as exhaustive and should be read in conjunction with RMR’s filings with the Securities and Exchange Commission, or the SEC, including RMR’s Form 10-K filed on November 22, 2019, especially the sections entitled “Risk Factors” and “Warning Concerning Forward-Looking Statements”, for other reasons why our forward-looking statements may not occur. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. 2
RMR IS A DYNAMIC ALTERNATIVE ASSET MANAGER The RMR Group Inc. (Nasdaq: RMR) is a holding company and substantially all of its business is conducted by its majority owned operating subsidiary, The RMR Group LLC, an alternative asset manager principally engaged in commercial real estate (CRE) businesses. The RMR Group LLC was founded in 1986 . Over 30 years of experience with buying, selling, financing and operating CRE. • Vertically integrated, nationwide operator of CRE across most real estate sectors. • Scalable platform and a deep bench of experienced management. • Approx . Over Over More than $32B 2,100 600 30 PROPERTIES PROFESSIONALS OFFICES OF GROSS AUM 3 3 Note: As of March 31, 2020.
INVESTMENT HIGHLIGHTS Stable revenue base with over 80% of RMR revenues generated 1 from 20-year evergreen contracts with h fixed ed b base f e fees ees o of 50 bps o of fee p ee paying ng A AUM. Significant potential upside to base and incentive fee revenues 2 as certain underlying Client Company share prices improve from current lows and fee ee paying ng AUM r rec ecover ers. With over $375 million of cash, no debt, and industry leading 3 margins, we have substantial capacity to actively pursue growth opportunities. 4 4 (1 (1) Adjus usted EBITDA i is a a n non-GAAP financial measur ure. See A Appendix for a r reconciliation of Adjus usted E EBITDA to t the m most d directly comparable f finan ancial al measur ure calcul ulated in a accordance with G GAAP.
CLIENT COMPANIES 440 First Street, NW, Washington, DC 5
RMR’S CLIENT COMPANIES SPAN MULTIPLE REAL ESTATE SUBSECTORS GROSS AUM / DESCRIPTION (1) COMPANY TICKER BUSINESS TYPE REVENUES (2) Nasdaq: Owns 329 hotels and 813 NNN service retail Equity REIT $12.5 billion AUM SVC properties Nasdaq: Owns 416 medical office buildings, life science PUBLICLY Equity REIT $8.5 billion AUM DHC buildings and senior living residential communities TRADED EQUITY Nasdaq: Owns 184 multi-tenant and single tenant office REITS Equity REIT $5.7 billion AUM OPI properties Nasdaq: Equity REIT Owns 301 industrial properties $2.6 billion AUM ILPT Nasdaq: Operates more than 260 travel centers located $6.1 billion annual C-corp. TA along the U.S. Interstate Highway System revenues OPERATING Nasdaq: Operates more than 260 senior living residential $1.4 billion annual C-corp. COMPANIES FVE communities throughout the U.S. revenues $49 million annual Private S-corp. Operates more than 70 hotels revenues NYSE SEC Registered Invests in common and preferred securities issued American: $237 million AUM RMR REAL EST AT E by non-client publicly traded REITs (3) closed-end fund INCO ME F UND RIF Open-endcore plus OTHER Invests in multi-tenant urban infill and suburban Private real estate $233 million AUM BUSINESSES office properties in non-gateway cities investment fund Invests in first mortgage loans secured by middle Nasdaq: Mortgage REIT market and transitional CRE $86 million AUM TRMT (1) Information presented is as of March 31, 2020. (2) Information presented represents Gross AUM unless otherwise specified to be annual revenues. Gross AUM information as of March 31, 2020 and annual revenues 6 information as of calendar year ended December 31, 2019. (3) On April 16, 2020, RIF’s shareholders approved its plan to convert from a registered investment company to a commercial mortgage REIT and RIF is in the preliminary stages of implementing a plan to execute this conversion .
RMR’S CONTRACTUAL RELATIONSHIPS Quarter Ended March 31, 2020 Company Contractual Relationship (2) Base e Pro ropert rty Advis isory Total (1 (1) Busines ness Mgmt mt. To Fees ees ($ in 000s) Mgmt. F Fees ees Fees ees RMR earns fees pursuant to Business Management and $10,745 $1,032 $ -- $11, 11,777 Property Management Agreements that renew each year for successive 20 year terms. Base business management revenues principally consist of • 5,923 3,222 -- 9,14 145 monthly fees generally based on 50 bps per annum MANAGED multiplied by the lower of: (1) the historical cost of real EQUITY estate; or (2) average market capitalization. REITS 4,477 5,003 -- 9,480 Property management revenues principally consist of • monthly fees based on 3.0% of gross rents collected at managed properties. 3,382 1,923 -- 5,305 05 Incentive fees are equal to 12% of value generated in excess • of benchmark index total returns per share, subject to caps. 3,379 -- -- 3, 3,37 379 Revenues consist of monthly fees based on 60 bps per annum MANAGED 2,351 -- -- 2,351 2, multiplied by revenues (as defined in the applicable OPERATORS agreement). 567 -- -- 567 Revenues consist of monthly fees based on 85 bps per annum RMR REAL EST AT E -- -- 743 743 multiplied by average daily assets under management. INCO ME F UND Revenues consist of monthly fees equal to 1.0% per annum of the Fund’s net asset value, as well as property management 514 352 -- 866 OTHER fees based on 3.0% of gross rents collected. Revenues consist of monthly fees based on 1.5% per annum of equity and an incentive fee based on 20% of core earnings over -- -- 37 37 37 a 7% hurdle rate (Note: Fees waived from July 2018 to July 2020). (1) Past fees are not an indication of future fees. 7 (2) A full description of the fee provisions can be found in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019.
VALUE PROPOSITION Intercontinental Toronto Canada 8
Recommend
More recommend
