The Rmr Group Inc. · NASDAQ:RMR
The Rmr — Q3 2023 Earnings Presentation
26 slides from The Rmr's earnings presentation, Aug 10, 2023
Slide 1: The RMR Group Inc. Announces Third Quarter Fiscal 2023 Financial Results
Exhibit 99.2 The RMR Group Inc. Announces Third Quarter Fiscal 2023 Financial Results August 9, 2023
Slide 2: The RMR Group Inc. Announces Third Quarter Fiscal 2023 Financial Results
THE RMR GROUP INC. ANNOUNCES THIRD QUARTER FISCAL 2023 FINANCIAL RESULTS Newton, MA (August 9, 2023). The RMR Group Inc. (Nasdaq: RMR) today announced its financial results for the fiscal quarter ended June 30, 2023. “In light of volatile real estate markets, our Dividend third quarter results once
Slide 3: Warning Regarding Forward-Looking Statements
WARNING REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “
Slide 4: Third Quarter Fiscal 2023 Financial Results
Third Quarter Fiscal 2023 Financial Results
Slide 5: The RMR Group Inc.'s Third Quarter Fiscal 2023 Highlights
THE RMR GROUP INC.'S THIRD QUARTER FISCAL 2023 HIGHLIGHTS • Assets Under Management of $35.7 Billion • Net Income of $55.2 Million, Net Income Attributable to The RMR Group Inc. of $24.6 Million, or $1.48 Per Diluted Share, and Net Income Margin of 59.7% • Adjusted Net Income Attributable to The RMR
Slide 6: AUM by Source
AUM BY SOURCE ($ in thousands) AUM Fee-Earning AUM $7,666,631 $4,414,846 21% 19% 3Q'23 $28,040,326 $18,736,533 79% 81% $35,706,957 $23,151,379 Perpetual ManagedCapital Public Real Estate Capital Private Managed Capital Private Real Estate Capital $4,381,506 $7,581,530 16% 20% 3Q'22 $29,664,375 $22,1
Slide 7: Perpetual Capital AUM
PERPETUAL CAPITAL AUM ($ in thousands) Commercial Real Estate Fee-Earning Sector AUM AUM Service Properties Trust (NASDAQ: SVC) Hotels / Retail $ 11,230,781 $ 7,247,604 Medical Office & Life Science / Diversified Healthcare Trust (NASDAQ: DHC) Residential 7,524,910 3,353,922 Office Properties Income
Slide 8: Private Capital AUM and Investment Performance
PRIVATE CAPITAL AUM AND INVESTMENT PERFORMANCE ($ in thousands) Inception to 3Q'23 Date Fee-Earning Net Internal Net Internal AUM AUM Rate of Return (1) Rate of Return (1) Industrial Real Estate Funds ("Core Plus") * $ 3,943,169 $ 891,810 2% 6% Medical Office & Life Science Real Estate Funds ("Core
Slide 9: AUM by Commercial Real Estate Sector
AUM BY COMMERCIAL REAL ESTATE SECTOR Medical Office & Life Science 14% 19% Office Residential 16% 15% Industrial Retail 18% 18% Hotels 9
Slide 10: Management and Advisory Services Revenues by Source
MANAGEMENT AND ADVISORY SERVICES REVENUES BY SOURCE ($ in thousands) Base Business Management & Advisory Fees Base Property Management Fees $37,736 $11,231 $6,712 $10,624 $31,364 $2,087 $2,031 $7,230 $31,024 $9,144 $8,593 $24,134 3Q'23 3Q'22 3Q'23 3Q'22 Perpetual CapitalReal Estate Capital Managed P
Slide 11: Managed Capital Spend & Construction Supervision Fees Revenue
MANAGED CAPITAL SPEND & CONSTRUCTION SUPERVISION FEES REVENUE ($ in thousands) Managed Capital Spend Construction Supervision Fees $103,453 $97,106 $4,596 $4,418 QTD 3Q'23 QTD 3Q'22 QTD 3Q'23 QTD 3Q'22 QTD $14,120 $321,689 $11,623 $248,358 YTD 3Q'23 YTD 3Q'22 YTD 3Q'23 YTD 3Q'22 YTD 11
Slide 12: GAAP Results: Condensed Consolidated Statements of Income
GAAP RESULTS: CONDENSED CONSOLIDATED STATEMENTS OF INCOME ($ in thousands) (unaudited) 3Q'23 3Q'22 Revenues: Management services (1) $ 45,872 $ 51,819 (2) Termination and incentive business management fees 45,474 — Advisory services 1,141 1,137 Total management and advisory services revenues 92,487
Slide 13: GAAP Results: Earnings Per Common Share
GAAP RESULTS: EARNINGS PER COMMON SHARE (amounts in thousands, except per share amounts) (unaudited) 3Q'23 3Q'22 Numerators: Net income attributable to The RMR Group Inc. $ 24,641 $ 7,570 Less: income attributable to unvested participating securities (273) (72) Net income attributable to The RMR Gro
Slide 14: GAAP Results: Condensed Consolidated Balance Sheets
GAAP RESULTS: CONDENSED CONSOLIDATED BALANCE SHEETS ($ in thousands) (unaudited) June 30, 2023 September 30, 2022 Assets Cash and cash equivalents $ 295,423 $ 189,088 Due from related parties 102,101 108,821 Prepaid and other current assets 6,486 5,372 Total current assets 404,010 303,281 Property a
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures 15
Slide 16: Reconciliation of Adjusted Net Income and Adjusted Net Income Per Diluted Share
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE The following table presents the impact of certain individually significant items on the financial results for the three months ended June 30, 2023, excluding the assumed redemption of the noncontrolling interest’s 15,00
Slide 17: Reconciliation of Adjusted Net Income and Adjusted Net Income Per Diluted Share (Continued)
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE (CONTINUED) The following table presents the impact of certain individually significant items on the financial results for the three months ended June 30, 2022, assuming the redemption of the noncontrolling interest’s 15
Slide 18: Reconciliation of EBITDA and Adjusted EBITDA from Net Income
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA FROM NET INCOME ($ in thousands) (unaudited) 3Q'23 3Q'22 Net income $ 55,171 $ 17,265 Income tax expense 9,214 2,943 Depreciation and amortization 281 253 EBITDA 64,666 20,461 Other asset amortization 2,354 2,354 Operating expenses paid in the form of The
Slide 19: Calculation of Net Income Margin, Adjusted EBITDA Margin, Distributable Earnings
CALCULATION OF NET INCOME MARGIN, ADJUSTED EBITDA MARGIN, DISTRIBUTABLE EARNINGS AND DISTRIBUTABLE EARNINGS PER SHARE (amounts in thousands, except per share amounts) (unaudited) 3Q'23 3Q'22 Calculation of Net Income Margin: Total management and advisory services revenues $ 92,487 $ 52,956 Net incom
Slide 20: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES RMR presents certain “non-GAAP financial measures” within the meaning of the applicable rules of the SEC, including Adjusted Net Income Attributable to The RMR Group Inc., Adjusted Net Income Attributable to The RMR Group Inc. per diluted share, EBITDA, Adjusted EBITDA, A
Slide 21: Notes & Definitions
Notes & Definitions 21
Slide 22: Notes
NOTES Notes to page 8 – PRIVATE CAPITAL AUM AND INVESTMENT PERFORMANCE (1) Net Internal Rate of Return (Net IRR) for the quarter represents a time-weighted return, which is calculated by determining the percentage change in net asset value based on contributions, distributions and unrealized fair va
Slide 23: Notes (Continued)
NOTES (CONTINUED) Notes to page 10 – MANAGEMENT AND ADVISORY SERVICES REVENUES BY SOURCE (CONTINUED) ($ in thousands) 3Q'23 3Q'22 BASE PROPERTY MANAGEMENT FEES DHC $ 1,504 $ 1,282 ILPT 3,132 2,404 OPI 3,572 3,894 SVC 936 1,013 Total Perpetual Capital 9,144 8,593 Other private entities 2,087 2,031 To
Slide 24: Notes (Continued)
NOTES (CONTINUED) Notes to page 12 – GAAP RESULTS: CONDENSED CONSOLIDATED STATEMENTS OF INCOME (1) Management services revenues includes base business management fees earned from the Managed Equity REITs monthly based upon the lower of (i) the average historical cost of each REIT’s properties, and (
Slide 25: Notes (Continued)
NOTES (CONTINUED) Notes to page 13 – GAAP RESULTS: EARNINGS PER COMMON SHARE RMR calculates earnings per share (EPS) using the two-class method. As such, earnings attributable to unvested participating shares are excluded from earnings before calculating per share amounts. In addition, diluted EPS i
Slide 26: Definitions
DEFINITIONS • Assets Under Management (AUM) All references in this presentation to AUM on, or as of, a date are calculated at a point in time. ▪ AUM is calculated as: (i) the historical cost of real estate and related assets, excluding depreciation, amortization, impairment charges or other non-cash