CIM Commercial Trust Corporation (NASDAQ: CMCT and TASE: CMCT-L)
("we", "our", “CMCT”, “CIM Commercial”, or the "Company"), a real
estate investment trust ("REIT") that primarily acquires, owns, and
operates Class A and creative office assets in vibrant and
improving metropolitan communities throughout the United States,
today reported operating results for the three and six months ended
June 30, 2019.
On August 8, 2019, we announced a 1-for-3 reverse stock split on
our common stock, to be effective on September 3, 2019. None of the
share or per share amounts in this release reflect the effect of
such reverse stock split.
Second Quarter 2019 Highlights
- Annualized rent per occupied square foot1 on a same-store2
basis increased 8.1% to $48.94 as of June 30, 2019 compared to
$45.27 as of June 30, 2018; annualized rent per occupied square
foot1 across all properties was $48.94 as of June 30, 2019.
- Our same-store2 office portfolio was 88.2% leased as of June
30, 2019 compared to 92.9% as of June 30, 2018.
- During the second quarter of 2019, we executed 24,115 square
feet of leases with terms longer than 12 months, of which 17,821
square feet were recurring leases executed at our same-store2
office portfolio, representing same-store2 cash rent growth per
square foot of 6.0%.
- Net income attributable to common stockholders was $48,260,000,
or $1.07 per diluted share, for the second quarter of 2019 compared
to net loss attributable to common stockholders of $(1,876,000), or
$(0.04) per diluted share, for the second quarter of 2018.
- Same-store2 office segment net operating income3 ("NOI")
decreased 5.0%, while same-store2 office cash NOI3 decreased 5.5%,
for the second quarter of 2019 as compared to the corresponding
period in 2018.
- Funds from operations (“FFO”) attributable to common
stockholders4 was $3,024,000, or $0.07 per diluted share, for the
second quarter of 2019, inclusive of $4,911,000, or $0.11 per
diluted share, in loss on early extinguishment of debt, compared to
$11,449,000, or $0.26 per diluted share, for the second quarter of
2018.
_____________________________
1
Annualized rent per occupied square foot
represents gross monthly base rent under leases commenced as of the
specified periods, multiplied by twelve. This amount reflects total
cash rent before abatements. Where applicable, annualized rent has
been grossed up by adding annualized expense reimbursements to base
rent. Annualized rent for certain office properties includes rent
attributable to retail.
2
Please see our definition of "same-store
properties" on page 12.
3
Please see our reconciliations of office,
hotel, lending, and total segment NOI to net income attributable to
the Company starting on page 13.
4
Please see page 9 for a reconciliation of
net income (loss) attributable to common stockholders to FFO
attributable to common stockholders and a discussion of the
benefits and limitations of FFO as a supplemental measure of
operating performance.
Program to Unlock Embedded Value in Our Portfolio and Improve
Trading Liquidity of Our Common Stock
As described in a separate release, our Board of Directors
declared a special cash dividend of $14.00 per share of common
stock primarily funded by the net proceeds (after the repayment of
debt) received from the sale of 10 properties during 2019 and
borrowings on our revolving credit facility.
We have also been informed that approximately 31.9 million of
the shares of our common stock held by our principal stockholder
(the "Fund”), representing approximately 72.8% of the outstanding
shares of our common stock, will be distributed to approximately 19
members of the Fund by the end of August 2019. Such distribution
will increase the public float of our common stock, which we
believe will in turn increase the trading liquidity of our common
stock and improve our access to capital, benefiting both preferred
and common stockholders. Following such distribution, the Fund is
expected to own approximately 16.9% of the outstanding shares of
our common stock.
No further property sales will be made under the program to
unlock embedded value in our portfolio and improve the trading
liquidity of our common stock. Our remaining portfolio, after the
sale of two office properties and one development site, all in
Washington, D.C., in July 2019, consists of approximately 1.3
million rentable square feet of office space in Los Angeles, San
Francisco and Oakland, California, and Austin, Texas and a 503-room
hotel and ancillary parking garage in Sacramento, California. Three
properties in Oakland and Sacramento, California, and Austin, Texas
include additional development opportunities.
Guidance
We are initiating guidance for 2019 NOI and net income (loss)
attributable to common stockholders as follows:
2019 Outlook
Low
High
(Unaudited, estimated and in
millions)
Cash NOI from retained properties and
lending activities
$
47.1
$
48.1
Non-cash adjustments from retained
properties and lending activities
4.1
4.1
Segment NOI from retained properties and
lending activities
51.2
52.2
Segment NOI from sold properties
16.0
16.0
Total Segment NOI
67.2
68.2
Asset management and other fees to related
parties and G&A
(21.0
)
(20.5
)
Depreciation and amortization, interest
expense, non-segment interest and other income, provision for
income taxes, redeemable preferred stock dividends declared or
accumulated, and net income attributable to noncontrolling
interests
(52.2
)
(52.2
)
Gain on sale of real estate, impairment of
real estate, loss on early extinguishment of debt, and transaction
costs
333.6
333.6
Net income attributable to common
stockholders
$
327.6
$
329.1
Key 2019 Assumptions
- No acquisitions or additional dispositions after the sale of
two office properties and one development site, all in Washington,
D.C., on July 30, 2019, occur during the remainder of 2019.
- No future transaction costs, offerings or share repurchases
have been assumed, except for continued monthly issuances of Series
A preferred units.
Financial Highlights
As of June 30, 2019, our real estate portfolio consisted of 14
assets, all of which are fee-simple properties. The portfolio
included 12 office properties (including two development sites, one
of which is being used as a parking lot), totaling approximately
1.9 million rentable square feet, and one hotel, with an ancillary
parking garage, which has 503 rooms. Two of such properties and one
development site in Washington, D.C. were sold in July 2019. We
also own and operate a lending business.
Second Quarter 2019
Net income attributable to common stockholders was $48,260,000,
or $1.07 per diluted share of common stock, for the three months
ended June 30, 2019, compared to net loss attributable to common
stockholders of $(1,876,000), or $(0.04) per diluted share of
common stock, for the three months ended June 30, 2018. The
increase is primarily attributable to the gain on sale of real
estate of $55,221,000, a decrease of $6,140,000 in depreciation and
amortization, a decrease of $4,497,000 in interest expense not
allocated to our operating segments, a decrease of $1,767,000 in
asset management and other fees to related parties not allocated to
our operating segments, an increase of $1,499,000 in interest and
other income not allocated to our operating segments, and a
decrease of $406,000 in general and administrative expense not
allocated to our operating segments, partially offset by a decrease
of $11,340,000 in net operating income5 of our operating segments,
a $4,911,000 loss on early extinguishment of debt, a $2,800,000
impairment of real estate, and an increase of $488,000 in
redeemable preferred stock dividends declared or accumulated.
FFO attributable to common stockholders6 was $3,024,000, or
$0.07 per diluted share of common stock, for the three months ended
June 30, 2019, compared to $11,449,000, or $0.26 per diluted share
of common stock, for the three months ended June 30, 2018. The
decrease in FFO attributable to common stockholders6 is primarily
attributable to a decrease of $11,340,000 in the NOI5 of our
operating segments, a $4,911,000 loss on early extinguishment of
debt, and an increase of $488,000 in redeemable preferred stock
dividends declared or accumulated, partially offset by a decrease
of $4,497,000 in interest expense not allocated to our operating
segments, a decrease of $1,767,000 in asset management and other
fees to related parties not allocated to our operating segments, an
increase of $1,499,000 in interest and other income not allocated
to our operating segments, and a decrease of $406,000 in general
and administrative expense not allocated to our operating
segments.
Year to Date 2019
Net income attributable to common stockholders was $335,891,000,
or $7.36 per diluted share of common stock, for the six months
ended June 30, 2019, compared to net loss attributable to common
stockholders of $(4,902,000), or $(0.11) per diluted share of
common stock, for the six months ended June 30, 2018.
FFO attributable to common stockholders6 was $(11,096,000), or
$(0.25) per diluted share of common stock, for the six months ended
June 30, 2019, compared to $21,571,000, or $0.49 per diluted share
of common stock, for the six months ended June 30, 2018.
____________________________
5
Please see our reconciliations of office,
hotel, lending, and total segment NOI to net income attributable to
the Company starting on page 13.
6
Please see page 9 for a reconciliation of
net income (loss) attributable to common stockholders to FFO
attributable to common stockholders and a discussion of the
benefits and limitations of FFO as a supplemental measure of
operating performance.
Segment Information
Our reportable segments during the three months ended June 30,
2019 and 2018 consisted of two types of commercial real estate
properties, namely, office and hotel, as well as a segment for our
lending business. Net income attributable to common stockholders
was $48,260,000, or $1.07 per diluted share of common stock, for
the three months ended June 30, 2019, compared to net loss
attributable to common stockholders of $(1,876,000), or $(0.04) per
diluted share of common stock, for the three months ended June 30,
2018, which represents an increase of $50,136,000, or $1.11 per
diluted share of common stock. Total segment NOI7 was $18,012,000
for the three months ended June 30, 2019, compared to $29,352,000
for the three months ended June 30, 2018.
Office
Same-Store8
Same-store8 office segment NOI7 decreased 5.0% on a GAAP basis
and decreased 5.5% on a cash basis for the three months ended June
30, 2019 compared to the three months ended June 30, 2018. The
decrease in same-store8 office segment NOI7 is primarily due to
lower revenues at an office property in Los Angeles, California
that is being repositioned into vibrant, collaborative office space
after the expiration in April 2019 of a lease agreement for 100% of
such property, which space has been partially occupied by a related
party since May 2019. This was partially offset by increases in
rental revenue at certain of our properties due to increases in
rental rates as a result of leasing activity.
At June 30, 2019, the Company’s same-store8 office portfolio was
88.1% occupied, a decrease of 460 basis points year-over-year on a
same-store8 basis, and 88.2% leased, a decrease of 470 basis points
year-over-year on a same-store8 basis. The annualized rent per
occupied square foot9 on a same-store8 basis was $48.94 at June 30,
2019 compared to $45.27 at June 30, 2018. For the three months
ended June 30, 2019, the Company executed 17,821 square feet of
recurring leases at our same-store8 office portfolio, representing
same-store8 cash rent growth per square foot of 6.0%.
____________________________
7
Please see our reconciliations of office,
hotel, lending, and total segment NOI to net income attributable to
the Company starting on page 13.
8
Please see our definition of "same-store
properties" on page 12.
9
Annualized rent per occupied square foot
represents gross monthly base rent under leases commenced as of the
specified periods, multiplied by twelve. This amount reflects total
cash rent before abatements. Where applicable, annualized rent has
been grossed up by adding annualized expense reimbursements to base
rent. Annualized rent for certain office properties includes rent
attributable to retail.
Total
Office segment NOI10 decreased to $12,935,000 for the three
months ended June 30, 2019, from $23,863,000 for the three months
ended June 30, 2018. The decrease is primarily attributable to the
sale of three office properties and a parking garage in Oakland,
California, the sale of an office property in Washington, D.C., and
the sale of an office property in San Francisco, California, all of
which were consummated in March 2019, the sale of an office
property in Oakland, California, which was consummated in May 2019,
and lower revenues at an office property in Los Angeles, California
that is being repositioned into vibrant, collaborative office space
after the expiration in April 2019 of a lease agreement for 100% of
such property, which space has been partially occupied by a related
party since May 2019, partially offset by increases in rental
revenue at certain of our properties due to increases in rental
rates as a result of leasing activity.
Hotel
Hotel segment NOI10 was $3,522,000 for the three months ended
June 30, 2019, compared to $4,110,000 for the three months ended
June 30, 2018. The decrease is primarily due to lower food and
beverage revenue during the three months ended June 30, 2019.
Lending
Our lending segment primarily consists of our SBA 7(a) lending
platform, which is a national lender that primarily originates
loans to small businesses in the hospitality industry. Lending
segment NOI10 was $1,555,000 for the three months ended June 30,
2019, compared to $1,379,000 for the three months ended June 30,
2018. The increase was primarily due to higher revenue as a result
of the recognition of accretion of discounts related to increased
prepayments on our loans and increases in the prime rate, partially
offset by an increase in interest expense as a result of the
issuance of the SBA 7(a) loan-backed notes in May 2018.
Debt and Equity
During the three months ended June 30, 2019, we issued 455,464
Series A preferred units, with each Series A preferred unit
consisting of one share of Series A preferred stock and one warrant
to purchase 0.25 shares of our common stock, resulting in net
proceeds of approximately $10,415,000. Net proceeds represent gross
proceeds offset by costs specifically identifiable to the offering
of the Series A preferred units, such as commissions, dealer
manager fees, and other offering fees and expenses.
On May 16, 2019, one mortgage loan with an outstanding principal
balance of $39,500,000 at such time, was legally defeased in
connection with the sale of the related property in Oakland,
California.
Dispositions
On May 16, 2019, we sold a 100% fee-simple interest in one
office property in San Francisco, California to an unrelated
third-party and recognized a gain of $55,221,000.
Dividends
On June 4, 2019, we declared a quarterly cash dividend of $0.125
per share of our common stock, which was paid on June 27, 2019 to
stockholders of record at the close of business on June 14,
2019.
Further, we declared a quarterly cash dividend of $0.34375 per
share of our Series A preferred stock, or portion thereof for
issuances during the period from April 1, 2019 to June 30, 2019,
which was paid on July 15, 2019 to stockholders of record at the
close of business on July 5, 2019.
____________________________
10
Please see our reconciliations of office,
hotel, lending, and total segment NOI to net income attributable to
the Company starting on page 13.
About CIM Commercial
CIM Commercial is a real estate investment trust that primarily
acquires, owns, and operates Class A and creative office assets in
vibrant and improving metropolitan communities throughout the
United States. Its properties are primarily located in Los Angeles
and the San Francisco Bay Area. CIM Commercial is operated by
affiliates of CIM Group, L.P., a vertically-integrated owner and
operator of real assets with multi-disciplinary expertise and
in-house research, acquisition, credit analysis, development,
finance, leasing, and onsite property management capabilities
(www.cimcommercial.com).
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, including, among others, statements about CIM Commercial's
outlook for net income (loss), NOI and derivations thereof. Such
forward-looking statements are based on particular assumptions that
management of CIM Commercial has made in light of its experience,
as well as its perception of expected future developments and other
factors that it believes are appropriate under the circumstances.
Forward-looking statements are necessarily estimates reflecting the
judgment of CIM Commercial and involve a number of risks and
uncertainties that could cause actual results to differ materially
from those suggested by the forward-looking statements. These risks
and uncertainties include those associated with (i) the timing,
manner and extent, if any, of the distribution of shares of common
stock held by the principal stockholder of CMCT to its members,
(ii) the timing, manner and extent, if any, of repurchases of
Series L preferred stock by the Company, and (iii) general
economic, market and other conditions. For a further list and
description of the risks and uncertainties inherent in
forward-looking statements, see CIM Commercial's Annual Report on
Form 10-K for the fiscal year ended December 31, 2018 and the
Registration Statement on Form S-11 (No. 333-210880) relating to
the Series A preferred stock.
Forward-looking statements are not guarantees of performance or
results and speak only as of the date such statements are made. CIM
Commercial undertakes no obligation to publicly update or release
any revisions to its forward-looking statements, whether to reflect
new information, future events, changes in assumptions or
circumstances or otherwise, except as required by law.
CIM COMMERCIAL TRUST
CORPORATION AND SUBSIDIARIES
Consolidated Balance
Sheets
(Unaudited and in thousands,
except share and per share amounts)
June 30, 2019
December 31, 2018
ASSETS
Investments in real estate, net
$
504,302
$
1,040,937
Cash and cash equivalents
373,665
54,931
Restricted cash
10,824
22,512
Loans receivable, net
72,485
83,248
Accounts receivable, net
4,821
6,640
Deferred rent receivable and charges,
net
33,158
84,230
Other intangible assets, net
8,252
9,531
Other assets
10,069
18,197
Assets held for sale, net
178,927
22,175
TOTAL ASSETS
$
1,196,503
$
1,342,401
LIABILITIES, REDEEMABLE PREFERRED
STOCK, AND EQUITY
LIABILITIES:
Debt, net
$
162,337
$
588,671
Accounts payable and accrued expenses
13,288
41,598
Intangible liabilities, net
1,938
2,872
Due to related parties
6,775
10,951
Other liabilities
9,357
16,535
Liabilities associated with assets held
for sale, net
3,245
28,766
Total liabilities
196,940
689,393
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK: Series A,
$0.001 par value; 36,000,000 shares authorized; 1,460,245 and
1,459,045 shares issued and outstanding, respectively, at June 30,
2019 and 1,566,386 and 1,565,346 shares issued and outstanding,
respectively, at December 31, 2018; liquidation preference of
$25.00 per share, subject to adjustment
33,303
35,733
EQUITY:
Series A cumulative redeemable preferred
stock, $0.001 par value; 36,000,000 shares authorized; 2,154,248
and 2,142,676 shares issued and outstanding, respectively, at June
30, 2019 and 1,287,169 and 1,281,804 shares issued and outstanding,
respectively, at December 31, 2018; liquidation preference of
$25.00 per share, subject to adjustment
53,327
31,866
Series L cumulative redeemable preferred
stock, $0.001 par value; 9,000,000 shares authorized; 8,080,740
shares issued and outstanding at June 30, 2019 and December 31,
2018; liquidation preference of $28.37 per share, subject to
adjustment
229,251
229,251
Common stock, $0.001 par value;
900,000,000 shares authorized; 43,805,741 and 43,795,073 shares
issued and outstanding at June 30, 2019 and December 31, 2018,
respectively
44
44
Additional paid-in capital
788,655
790,354
Accumulated other comprehensive income
—
1,806
Distributions in excess of earnings
(105,634
)
(436,883
)
Total stockholders' equity
965,643
616,438
Noncontrolling interests
617
837
Total equity
966,260
617,275
TOTAL LIABILITIES, REDEEMABLE PREFERRED
STOCK, AND EQUITY
$
1,196,503
$
1,342,401
CIM COMMERCIAL TRUST
CORPORATION AND SUBSIDIARIES
Consolidated Statements of
Operations
(Unaudited and in thousands,
except per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
REVENUES:
Rental and other property income
$
22,419
$
37,825
$
56,000
$
72,969
Hotel income
9,549
10,160
19,353
19,849
Interest and other income
4,888
3,559
8,780
7,020
36,856
51,544
84,133
99,838
EXPENSES:
Rental and other property operating
15,658
20,765
35,911
38,681
Asset management and other fees to related
parties
4,288
6,143
10,174
12,354
Interest
2,550
6,811
6,595
13,444
General and administrative
1,621
1,915
3,409
5,291
Transaction costs
216
344
260
344
Depreciation and amortization
7,185
13,325
16,815
26,473
Loss on early extinguishment of debt
4,911
—
29,982
—
Impairment of real estate
2,800
—
69,000
—
39,229
49,303
172,146
96,587
Gain on sale of real estate
55,221
—
432,802
—
INCOME BEFORE PROVISION FOR INCOME
TAXES
52,848
2,241
344,789
3,251
Provision for income taxes
281
292
599
680
NET INCOME
52,567
1,949
344,190
2,571
Net (income) loss attributable to
noncontrolling interests
(1
)
(12
)
173
(16
)
NET INCOME ATTRIBUTABLE TO THE COMPANY
52,566
1,937
344,363
2,555
Redeemable preferred stock dividends
declared or accumulated
(4,302
)
(3,814
)
(8,464
)
(7,459
)
Redeemable preferred stock redemptions
(4
)
1
(8
)
2
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
STOCKHOLDERS
$
48,260
$
(1,876
)
$
335,891
$
(4,902
)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
STOCKHOLDERS PER SHARE:
Basic
$
1.10
$
(0.04
)
$
7.67
$
(0.11
)
Diluted
$
1.07
$
(0.04
)
$
7.36
$
(0.11
)
WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDING:
Basic
43,791
43,791
43,793
43,788
Diluted
45,853
43,791
45,804
43,788
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIES Funds from Operations (Unaudited and in thousands,
except per share amounts)
We believe that FFO is a widely recognized and appropriate
measure of the performance of a REIT and that it is frequently used
by securities analysts, investors and other interested parties in
the evaluation of REITs, many of which present FFO when reporting
their results. FFO represents net income (loss) attributable to
common stockholders, computed in accordance with generally accepted
accounting principles ("GAAP"), which reflects the deduction of
redeemable preferred stock dividends accumulated, excluding gains
(or losses) from sales of real estate, impairment of real estate,
and real estate depreciation and amortization. We calculate FFO in
accordance with the standards established by the National
Association of Real Estate Investment Trusts (the "NAREIT").
Like any metric, FFO should not be used as the only measure of
our performance because it excludes depreciation and amortization
and captures neither the changes in the value of our real estate
properties that result from use or market conditions nor the level
of capital expenditures and leasing commissions necessary to
maintain the operating performance of our properties, all of which
have real economic effect and could materially impact our operating
results. Other REITs may not calculate FFO in accordance with the
standards established by the NAREIT; accordingly, our FFO may not
be comparable to the FFOs of other REITs. Therefore, FFO should be
considered only as a supplement to net income (loss) as a measure
of our performance and should not be used as a supplement to or
substitute measure for cash flows from operating activities
computed in accordance with GAAP. FFO should not be used as a
measure of our liquidity, nor is it indicative of funds available
to fund our cash needs, including our ability to pay dividends.
The following table sets forth a reconciliation of net income
(loss) attributable to common stockholders to FFO attributable to
common stockholders for the three and six months ended June 30,
2019 and 2018:
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Numerator:
Net income (loss) attributable to common
stockholders
$
48,260
$
(1,876
)
$
335,891
$
(4,902
)
Depreciation and amortization
7,185
13,325
16,815
26,473
Impairment of real estate
2,800
—
69,000
—
Gain on sale of depreciable assets11
(55,221
)
—
(432,802
)
—
FFO attributable to common
stockholders
$
3,024
$
11,449
$
(11,096
)
$
21,571
Redeemable preferred stock dividends
declared on dilutive shares12
—
71
(1
)
102
Diluted FFO attributable to common
stockholders
$
3,024
$
11,520
$
(11,097
)
$
21,673
Denominator:
Basic weighted average shares of Common
Stock outstanding
43,791
43,791
43,793
43,788
Effect of dilutive securities—contingently
issuable shares12
8
305
4
228
Diluted weighted average shares and common
stock equivalents outstanding
43,799
44,096
43,797
44,016
FFO attributable to common stockholders
per share:
Basic
$
0.07
$
0.26
$
(0.25
)
$
0.49
Diluted
$
0.07
$
0.26
$
(0.25
)
$
0.49
____________________________
11
In connection with the sale of certain
properties during the three and six months ended June 30, 2019, we
recognized $4,911,000 and $29,982,000, respectively, or $0.11 and
$0.68 per diluted share of common stock, respectively, in loss on
early extinguishment of debt primarily related to the legal
defeasance and prepayment of mortgage loans collateralized by such
properties. Such loss on early extinguishment of debt is not
included in the adjustment for the gain on sale of depreciable
assets presented in the table above.
12
For the three and six months ended June
30, 2019 and 2018, the effect of certain shares of redeemable
preferred stock were excluded from the computation of diluted FFO
attributable to common stockholders and the diluted weighted
average shares and common stock equivalents outstanding as such
inclusion would be anti-dilutive.
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIES Earnings Per Share (Unaudited and in thousands, except
per share amounts)
Earnings per share ("EPS") for the year-to-date period may
differ from the sum of quarterly EPS amounts due to the required
method for computing EPS for the respective periods. In addition,
EPS is calculated independently for each component and may not be
additive due to rounding.
The following table reconciles the numerator and denominator
used in computing our basic and diluted per-share amounts for net
income (loss) attributable to common stockholders for the three and
six months ended June 30, 2019 and 2018:
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Numerator:
Net income (loss) attributable to common
stockholders
$
48,260
$
(1,876
)
$
335,891
$
(4,902
)
Redeemable preferred stock dividends
declared on dilutive shares
659
—
1,151
—
Diluted net income (loss) attributable to
common stockholders
$
48,919
$
(1,876
)
$
337,042
$
(4,902
)
Denominator:
Basic weighted average shares of Common
Stock outstanding
43,791
43,791
43,793
43,788
Effect of dilutive securities—contingently
issuable shares
2,062
—
2,011
—
Diluted weighted average shares and common
stock equivalents outstanding
45,853
43,791
45,804
43,788
Net income (loss) attributable to
common stockholders per share:
Basic
$
1.10
$
(0.04
)
$
7.67
$
(0.11
)
Diluted
$
1.07
$
(0.04
)
$
7.36
$
(0.11
)
CIM COMMERCIAL TRUST CORPORATION AND
SUBSIDIARIES Reconciliation of Net Operating Income (Unaudited and
in thousands)
We internally evaluate the operating performance and financial
results of our real estate segments based on segment NOI, which is
defined as rental and other property income and expense
reimbursements less property related expenses and excludes
non-property income and expenses, interest expense, depreciation
and amortization, corporate related general and administrative
expenses, gain (loss) on sale of real estate, gain (loss) on early
extinguishment of debt, impairment of real estate, transaction
costs, and provision for income taxes. For our lending segment, we
define segment NOI as interest income net of interest expense and
general overhead expenses. We also evaluate the operating
performance and financial results of our operating segments using
cash basis NOI, or "cash NOI". We define cash NOI as segment NOI
adjusted to exclude the effect of the straight lining of rents,
acquired above/below market lease amortization and other
adjustments required by GAAP.
Segment NOI and cash NOI are not measures of operating results
or cash flows from operating activities as measured by GAAP and
should not be considered alternatives to income from continuing
operations, or to cash flows as a measure of liquidity, or as an
indication of our performance or of our ability to pay dividends.
Companies may not calculate segment NOI or cash NOI in the same
manner. We consider segment NOI and cash NOI to be useful
performance measures to investors and management because, when
compared across periods, they reflect the revenues and expenses
directly associated with owning and operating our properties and
the impact to operations from trends in occupancy rates, rental
rates and operating costs, providing a perspective not immediately
apparent from income from continuing operations. Additionally, we
believe that cash NOI is helpful to investors because it eliminates
straight line rent and other non-cash adjustments to revenue and
expenses.
To facilitate a comparison of our segments and portfolio between
reporting periods, we calculate comparable amounts for a subset of
our segments and portfolio referred to as our “same-store
properties.” Our same-store properties are ones which we have owned
and operated in a consistent manner and reported in our
consolidated results during the entire span of the periods being
reported. We excluded from our same-store property set this quarter
any properties (i) acquired on or after April 1, 2018; (ii) sold or
otherwise removed from our consolidated financial statements on or
before June 30, 2019; or (iii) that underwent a major repositioning
project we believed significantly affected its results at any point
during the period commencing on April 1, 2018 and ending on June
30, 2019.
CIM COMMERCIAL TRUST
CORPORATION AND SUBSIDIARIES
Reconciliation of Net
Operating Income (Continued)
(Unaudited and in
thousands)
Below is a reconciliation of cash NOI to
segment NOI and net income for the three months ended June 30, 2019
and 2018.
Three Months Ended June 30,
2019
Same- Store Office
Non- Same- Store
Office
Total Office
Hotel
Lending
Total
Cash net operating income excluding lease
termination income
$
12,116
$
19
$
12,135
$
3,516
$
1,555
$
17,206
Cash lease termination income
—
—
—
—
—
—
Cash net operating income
12,116
19
12,135
3,516
1,555
17,206
Deferred rent and amortization of
intangible assets, liabilities, and lease inducements
606
194
800
6
—
806
Straight line lease termination income
—
—
—
—
—
—
Segment net operating income
12,722
213
12,935
3,522
1,555
18,012
Interest and other income
1,499
Asset management and other fees to related
parties
(3,737
)
Interest expense
(2,014
)
General and administrative
(1,021
)
Transaction costs
(216
)
Depreciation and amortization
(7,185
)
Loss on early extinguishment of debt
(4,911
)
Impairment of real estate
(2,800
)
Gain on sale of real estate
55,221
Income before provision for income
taxes
52,848
Provision for income taxes
(281
)
Net income
52,567
Net income attributable to noncontrolling
interests
(1
)
Net income attributable to the Company
$
52,566
CIM COMMERCIAL TRUST
CORPORATION AND SUBSIDIARIES
Reconciliation of Net
Operating Income (Continued)
(Unaudited and in
thousands)
Three Months Ended June 30,
2018
Same- Store Office
Non- Same- Store
Office
Total Office
Hotel
Lending
Total
Cash net operating income excluding lease
termination income
$
12,816
$
9,615
$
22,431
$
4,103
$
1,372
$
27,906
Cash lease termination income
10
—
10
10
—
20
Cash net operating income
12,826
9,615
22,441
4,113
1,372
27,926
Deferred rent and amortization of
intangible assets, liabilities, and lease inducements
561
861
1,422
(3
)
—
1,419
Straight line rent, below-market ground
lease and amortization of intangible assets
—
—
—
—
7
7
Straight line lease termination income
—
—
—
—
—
—
Segment net operating income
13,387
10,476
23,863
4,110
1,379
29,352
Asset management and other fees to related
parties
(5,504
)
Interest expense
(6,511
)
General and administrative
(1,427
)
Transaction costs
(344
)
Depreciation and amortization
(13,325
)
Income before provision for income
taxes
2,241
Provision for income taxes
(292
)
Net income
1,949
Net income attributable to noncontrolling
interests
(12
)
Net income attributable to the Company
$
1,937
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190808005945/en/
For CIM Commercial Trust Corporation Media Relations: Bill
Mendel, 212-397-1030 bill@mendelcommunications.com
or
Shareholder Relations: Steve Altebrando, 646-652-8473
shareholders@cimcommercial.com
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