Hudson Pacific Properties, Inc. (NYSE: HPP) (the
"Company," "Hudson Pacific," or "HPP"), a unique provider of
end-to-end real estate solutions for dynamic tech and media tenants
in global epicenters for these synergistic, converging and secular
growth industries, today announced financial results for the second
quarter 2023.
"We continued to focus on the controllable aspects of our
business during the quarter, which included leasing and expense
management, given the industry challenges we are working to
navigate," said Victor Coleman, Chairman & CEO. "Last month,
the national entertainment strike expanded, with the actors joining
the writers on strike for the first time since 1960. A strike of
this magnitude, while rare and historically short-term, can be
extremely impactful and far-reaching. We’re working diligently to
mitigate its impact and to ensure our studio business is well
positioned to capture the potential surge in production upon
resolution. Regarding our office portfolio, a greater percentage of
our tenants are starting to enforce back-to-office requirements,
which we believe could ultimately result in the need for more
office space as workforces have grown on a net basis over the past
five years in many industries central to our leasing efforts. The
timeline for tenant decision making remains extended, but increased
interest is signaling that office fundamentals could begin to
evolve in a more positive manner in our west coast markets. With
our attention to capital preservation and addressing our debt
maturities, we expect to overcome today’s challenges and capitalize
on longer-term tenant activity within our attractive
portfolio."
Financial Results Compared to Second Quarter 2022
- Total revenue of $245.2 million compared to $251.4 million,
primarily due to previously communicated vacancies at Skyport Plaza
and 10900-10950 Washington and the sales of 6922 Hollywood and
Skyway Landing
- Net loss attributable to common stockholders of $36.2 million,
or $0.26 per diluted share, compared to net loss of $7.4 million,
or $0.05 per diluted share, driven by the aforementioned tenant
move-outs and asset sales, higher operating expenses associated
with the Quixote acquisition and increased interest expense
- FFO, excluding specified items, of $34.5 million, or $0.24 per
diluted share, compared to $74.6 million, or $0.51 per diluted
share. Specified items consist of transaction-related income
(rather than expense) of $2.5 million, or $0.02 per diluted share
(includes lowering accruals for future earn-outs related to the Zio
Studio Services acquisition); prior-period property tax
reimbursement of $1.5 million, or $0.01 per diluted share; deferred
tax asset write-off expense of $3.5 million, or $0.02 per diluted
share; and, gain on debt extinguishment of $7.2 million (net of
taxes), or $0.05 per diluted share. Prior year specified items
consisted of transaction-related expenses of $1.1 million, or $0.01
per diluted share; and prior-period property tax expense of $0.5
million, or $0.00 per diluted share
- FFO of $42.2 million, or $0.29 per diluted share, compared to
$73.0 million, or $0.50 per diluted share
- AFFO of $31.1 million, or $0.22 per diluted share, compared to
$60.3 million, or $0.41 per diluted share
- Same-store cash NOI of $127.6 million up 4.7% compared to
$121.9 million, mostly attributable to significant office lease
commencements at One Westside and Harlow
Leasing
- Executed 61 new and renewal leases totaling 403,231 square
feet, including a 56,000-square-foot renewal and extension with
Rivian Automotive at Clocktower Square through 2028
- GAAP and cash rents decreased 3.8% and 8.1%, respectively, from
prior levels
- In-service office portfolio ended the quarter at 85.2% occupied
and 87.0% leased, with the change primarily attributable to small-
to mid-sized expirations in the Peninsula and Silicon Valley, and
to a lesser extent, Vancouver
- On average over the trailing 12 months, the in-service studio
portfolio was 86.5% leased, and the related 35 stages were 95.7%
leased
Balance Sheet as of June 30, 2023
- $581.2 million of total liquidity comprised of $109.2 million
of unrestricted cash and cash equivalents and $472.0 million of
undrawn capacity under the unsecured revolving credit facility
- $90.0 million and $32.4 million of undrawn capacity under
construction loans secured by One Westside/Westside Two and Sunset
Glenoaks Studios, respectively
- HPP's share of net debt to HPP's share of undepreciated book
value was 38.7% with 85.3% of debt fixed or capped and no material
maturities until the loan secured by One Westside, which is 100%
leased to Google through 2036, matures in December 2024
- Repaid the Quixote loan for $150.0 million, a $10.0 million
discount on the principal balance, with funds from the unsecured
revolving credit facility
Dividend
- The Company's Board of Directors declared and paid dividends on
its common stock of $0.125 per share, and on its 4.750% Series C
cumulative preferred stock of $0.296875 per share
ESG Leadership
- Issued 2022 Corporate Responsibility Report outlining
achievements, including ranking #1 amongst office companies in the
Americas in the GRESB Real Estate Assessment, winning Nareit’s
Office Leader in the Light Award, inclusion in the Bloomberg
Gender-Equality Index, and launch of HPPx2030 with ambitious
targets to reduce climate impact and diversify management
2023 Outlook
Due to continued uncertainty around the duration of the
studio-related union strikes, the Company will continue to provide
certain assumptions relevant to its full-year 2023 office outlook,
but has not reinstated its outlook for 2023 full-year FFO or
studio-related assumptions. Current assumptions reflect
management’s view of current and future market conditions,
including assumptions with respect to rental rates, occupancy
levels and the earnings impact of events referenced in this press
release and in earlier announcements. It otherwise excludes any
impact from new acquisitions, dispositions, debt financings or
repayments, recapitalizations, capital markets activity or similar
matters. There can be no assurance that actual results will not
differ materially from these estimates.
Unaudited, in thousands, except share
data
Full Year 2023
Assumptions
Metric
Low
High
Growth in office same-store cash
NOI(1)(2)
1.00%
2.00%
GAAP non-cash revenue (straight-line rent
and above/below-market rents)(3)
$13,500
$23,500
GAAP non-cash expense (straight-line rent
expense and above/below-market ground rent)
$(7,100)
$(9,100)
General and administrative expenses(4)
$(70,000)
$(76,000)
Interest expense(5)
$(212,000)
$(222,000)
Non-real estate depreciation and
amortization
$(34,000)
$(36,000)
FFO from unconsolidated joint ventures
$500
$2,500
FFO attributable to non-controlling
interests
$(42,000)
$(46,000)
FFO attributable to preferred
units/shares
$(21,000)
$(21,000)
Weighted average common stock/units
outstanding—diluted(6)
143,000,000
144,000,000
(1)
Same-store office for the full year 2023
is defined as the 43 office properties owned and included in the
Company's stabilized portfolio as of January 1, 2022, and
anticipated to still be owned and included in the stabilized
portfolio through December 31, 2023.
(2)
Please see non-GAAP information below for
definition of cash NOI.
(3)
Includes non-cash straight-line rent
associated with the office properties.
(4)
Includes non-cash compensation expense,
which the Company estimates at $22,000 in 2023.
(5)
Includes non-cash interest expense, which
the Company estimates at $13,000 in 2023.
(6)
Diluted shares represent ownership in the
Company through shares of common stock, OP Units and other
convertible or exchangeable instruments. The weighted average fully
diluted common stock/units outstanding for 2023 includes an
estimate for the dilution impact of stock grants to the Company's
executives under its long-term incentive programs. This estimate is
based on the projected award potential of such programs as of the
end of the most recently completed quarter, as calculated in
accordance with the ASC 260, Earnings Per Share.
The Company does not provide a reconciliation for non-GAAP
estimates on a forward-looking basis, where it is unable to provide
a meaningful or accurate calculation or estimation of reconciling
items and the information is not available without unreasonable
effort. This is due to the inherent difficulty of forecasting the
timing and/or amount of various items that would impact net income
attributable to common stockholders per diluted share, which is the
most directly comparable forward-looking GAAP financial measure.
This includes, for example, acquisition costs and other non-core
items that have not yet occurred, are out of the Company's control
and/or cannot be reasonably predicted. For the same reasons, the
Company is unable to address the probable significance of the
unavailable information. Forward-looking non-GAAP financial
measures provided without the most directly comparable GAAP
financial measures may vary materially from the corresponding GAAP
financial measures.
Supplemental Information
Supplemental financial information regarding Hudson Pacific's
second quarter 2023 results may be found on the Investors section
of the Company's website at HudsonPacificProperties.com. This
supplemental information provides additional detail on items such
as property occupancy, financial performance by property and debt
maturity schedules.
Conference Call
The Company will hold a conference call to discuss second
quarter 2023 financial results at 9:00 a.m. PT / 12:00 p.m. ET on
August 2, 2023. Please dial (833) 470-1428 and enter passcode
861397 to access the call. International callers should dial (404)
975-4839 and enter the same passcode. A live, listen-only webcast
and replay can be accessed via the Investors section of the
Company's website at HudsonPacificProperties.com.
About Hudson Pacific Properties
Hudson Pacific Properties (NYSE: HPP) is a real estate
investment trust serving dynamic tech and media tenants in global
epicenters for these synergistic, converging and secular growth
industries. Hudson Pacific’s unique and high-barrier tech and media
focus leverages a full-service, end-to-end value creation platform
forged through deep strategic relationships and niche expertise
across identifying, acquiring, transforming and developing
properties into world-class amenitized, collaborative and
sustainable office and studio space. For more information visit
HudsonPacificProperties.com.
Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements relate to expectations, beliefs, projections, future
plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. In
some cases, you can identify forward-looking statements by the use
of forward-looking terminology such as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts," or "potential" or the negative of these
words and phrases or similar words or phrases that are predictions
of or indicate future events, or trends and that do not relate
solely to historical matters. Forward-looking statements involve
known and unknown risks, uncertainties, assumptions and
contingencies, many of which are beyond the Company's control,
which may cause actual results to differ significantly from those
expressed in any forward-looking statement. All forward-looking
statements reflect the Company's good faith beliefs, assumptions
and expectations, but they are not guarantees of future
performance. Furthermore, the Company disclaims any obligation to
publicly update or revise any forward-looking statement to reflect
changes in underlying assumptions or factors, of new information,
data or methods, future events or other changes. For a further
discussion of these and other factors that could cause the
Company's future results to differ materially from any
forward-looking statements, see the section entitled "Risk Factors"
in the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission, or SEC, and other risks
described in documents subsequently filed by the Company from time
to time with the SEC.
(FINANCIAL TABLES FOLLOW)
Consolidated Balance Sheets
In thousands, except share data
June 30, 2023
December 31, 2022
(Unaudited)
ASSETS
Investment in real estate, at cost
$
8,856,229
$
8,716,572
Accumulated depreciation and
amortization
(1,686,943
)
(1,541,271
)
Investment in real estate, net
7,169,286
7,175,301
Non-real estate property, plant and
equipment, net
119,526
130,289
Cash and cash equivalents
109,220
255,761
Restricted cash
18,583
29,970
Accounts receivable, net
18,921
16,820
Straight-line rent receivables, net
294,050
279,910
Deferred leasing costs and intangible
assets, net
371,525
393,842
Operating lease right-of-use assets
393,911
401,051
Prepaid expenses and other assets, net
128,836
98,837
Investment in unconsolidated real estate
entities
218,422
180,572
Goodwill
263,549
263,549
Assets associated with real estate held
for sale
—
93,238
TOTAL ASSETS
$
9,105,829
$
9,319,140
LIABILITIES AND EQUITY
Liabilities
Unsecured and secured debt, net
$
4,473,107
$
4,585,862
Joint venture partner debt
66,136
66,136
Accounts payable, accrued liabilities and
other
274,294
264,098
Operating lease liabilities
395,170
399,801
Intangible liabilities, net
30,798
34,091
Security deposits, prepaid rent and
other
92,021
83,797
Liabilities associated with real estate
held for sale
—
665
Total liabilities
5,331,526
5,434,450
Redeemable preferred units of the
operating partnership
9,815
9,815
Redeemable non-controlling interest in
consolidated real estate entities
119,136
125,044
Equity
HPP stockholders' equity:
4.750% Series C cumulative redeemable
preferred stock, $0.01 par value, $25.00 per share liquidation
preference, 18,400,000 authorized; 17,000,000 shares outstanding at
June 30, 2023 and December 31, 2022
425,000
425,000
Common stock, $0.01 par value, 481,600,000
authorized, 140,937,702 shares and 141,054,478 shares outstanding
at June 30, 2023 and December 31, 2022, respectively
1,403
1,409
Additional paid-in capital
2,783,858
2,889,967
Accumulated other comprehensive income
(loss)
6,413
(11,272
)
Total HPP stockholders' equity
3,216,674
3,305,104
Non-controlling interest—members in
consolidated real estate entities
355,270
377,756
Non-controlling interest—units in the
operating partnership
73,408
66,971
Total equity
3,645,352
3,749,831
TOTAL LIABILITIES AND EQUITY
$
9,105,829
$
9,319,140
Consolidated Statements of
Operations
Unaudited, in thousands, except share
data
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
REVENUES
Office
Rental revenues
$
203,486
$
211,836
$
406,143
$
418,028
Service and other revenues
3,805
4,408
7,781
9,616
Total office revenues
207,291
216,244
413,924
427,644
Studio
Rental revenues
16,374
13,438
32,627
26,832
Service and other revenues
21,503
21,748
50,880
41,467
Total studio revenues
37,877
35,186
83,507
68,299
Total revenues
245,168
251,430
497,431
495,943
OPERATING EXPENSES
Office operating expenses
76,767
78,558
150,821
152,189
Studio operating expenses
34,679
20,686
71,923
39,669
General and administrative
18,941
21,871
37,665
42,383
Depreciation and amortization
98,935
91,438
196,074
183,631
Total operating expenses
229,322
212,553
456,483
417,872
OTHER INCOME (EXPENSES)
(Loss) income from unconsolidated real
estate entities
(715
)
1,780
(1,460
)
2,083
Fee income
2,284
1,140
4,686
2,211
Interest expense
(54,648
)
(33,719
)
(108,455
)
(64,555
)
Interest income
236
920
607
1,830
Management services reimbursement
income—unconsolidated real estate entities
1,059
1,068
2,123
2,176
Management services expense—unconsolidated
real estate entities
(1,059
)
(1,068
)
(2,123
)
(2,176
)
Transaction-related expenses
2,530
(1,126
)
1,344
(1,382
)
Unrealized loss on non-real estate
investments
(843
)
(1,818
)
(4
)
(168
)
Gain on extinguishment of debt
10,000
—
10,000
—
Gain on sale of real estate
—
—
7,046
—
Impairment loss
—
(3,250
)
—
(23,753
)
Other income (expense)
138
(21
)
135
(9
)
Total other expenses
(41,018
)
(36,094
)
(86,101
)
(83,743
)
(Loss) income before income tax
(provision) benefit
(25,172
)
2,783
(45,153
)
(5,672
)
Income tax (provision) benefit
(6,302
)
763
(1,140
)
1,603
Net (loss) income
(31,474
)
3,546
(46,293
)
(4,069
)
Net income attributable to Series A
preferred units
(153
)
(153
)
(306
)
(306
)
Net income attributable to Series C
preferred shares
(5,047
)
(5,047
)
(10,094
)
(10,337
)
Net income attributable to participating
securities
(297
)
(300
)
(850
)
(594
)
Net income attributable to non-controlling
interest in consolidated real estate entities
(346
)
(7,081
)
(1,377
)
(15,642
)
Net loss attributable to redeemable
non-controlling interest in consolidated real estate entities
508
1,506
1,402
3,396
Net loss attributable to common units in
the operating partnership
646
93
928
323
NET LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS
$
(36,163
)
$
(7,436
)
$
(56,590
)
$
(27,229
)
BASIC AND DILUTED PER SHARE
AMOUNTS
Net loss attributable to common
stockholders—basic
$
(0.26
)
$
(0.05
)
$
(0.40
)
$
(0.19
)
Net loss attributable to common
stockholders—diluted
$
(0.26
)
$
(0.05
)
$
(0.40
)
$
(0.19
)
Weighted average shares of common stock
outstanding—basic
140,910
143,817
140,967
146,487
Weighted average shares of common stock
outstanding—diluted
140,910
143,817
140,967
146,487
Funds from Operations(1)
Unaudited, in thousands, except per share
data
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
RECONCILIATION OF NET (LOSS) INCOME TO
FUNDS FROM OPERATIONS (“FFO”)(1):
Net (loss) income
$
(31,474
)
$
3,546
$
(46,293
)
$
(4,069
)
Adjustments:
Depreciation and
amortization—consolidated
98,935
91,438
196,074
183,631
Depreciation and amortization—non-real
estate assets
(8,832
)
(4,485
)
(17,224
)
(8,917
)
Depreciation and amortization—HPP's share
from unconsolidated real estate entities(2)
1,195
1,320
2,458
2,689
Gain on sale of real estate
—
—
(7,046
)
—
Impairment loss—real estate assets
—
3,250
—
15,253
Unrealized loss on non-real estate
investments
843
1,818
4
168
FFO attributable to non-controlling
interests
(13,239
)
(18,687
)
(26,862
)
(38,687
)
FFO attributable to preferred shares and
units
(5,200
)
(5,200
)
(10,400
)
(10,643
)
FFO to common stock/unit
holders
42,228
73,000
90,711
139,425
Specified items impacting FFO:
Transaction-related expenses
(2,530
)
1,126
(1,344
)
1,382
Impairment loss—trade name
—
—
—
8,500
Prior period net property tax
adjustment—Company’s share
(1,469
)
477
(1,469
)
451
Deferred tax asset valuation allowance
3,516
—
3,516
—
One-time gain on debt extinguishment
(10,000
)
—
(10,000
)
—
One-time tax impact of gain on debt
extinguishment
2,751
—
2,751
—
FFO (excluding specified items) to
common stock/unit holders
$
34,496
$
74,603
$
84,165
$
149,758
Weighted average common stock/units
outstanding—diluted
143,428
146,344
143,379
149,249
FFO per common stock/unit—diluted
$
0.29
$
0.50
$
0.63
$
0.93
FFO (excluding specified items) per common
stock/unit—diluted
$
0.24
$
0.51
$
0.59
$
1.00
(1)
We calculate Funds from Operations ("FFO")
in accordance with the White Paper on FFO approved by the Board of
Governors of the National Association of Real Estate Investment
Trusts. The White Paper defines FFO as net income or loss
calculated in accordance with generally accepted accounting
principles in the United States (“GAAP”), excluding gains and
losses from sales of depreciable real estate and impairment
write-downs associated with depreciable real estate, plus the HPP’s
share of real estate-related depreciation and amortization,
excluding amortization of deferred financing costs and depreciation
of non-real estate assets. The calculation of FFO includes the
HPP’s share of amortization of deferred revenue related to
tenant-funded tenant improvements and excludes the depreciation of
the related tenant improvement assets.
FFO is a non-GAAP financial measure we
believe is a useful supplemental measure of our operating
performance. The exclusion from FFO of gains and losses from the
sale of operating real estate assets allows investors and analysts
to readily identify the operating results of the assets that form
the core of our activity and assists in comparing those operating
results between periods. Also, because FFO is generally recognized
as the industry standard for reporting the operations of REITs, it
facilitates comparisons of operating performance to other REITs.
However, other REITs may use different methodologies to calculate
FFO, and accordingly, our FFO may not be comparable to all other
REITs.
Implicit in historical cost accounting for
real estate assets in accordance with GAAP is the assumption that
the value of real estate assets diminishes predictably over time.
Since real estate values have historically risen or fallen with
market conditions, many industry investors and analysts have
considered presentations of operating results for real estate
companies using historical cost accounting alone to be
insufficient. Because FFO excludes depreciation and amortization of
real estate assets, we believe that FFO along with the required
GAAP presentations provides a more complete measurement of our
performance relative to our competitors and a more appropriate
basis on which to make decisions involving operating, financing and
investing activities than the required GAAP presentations alone
would provide. We use FFO per share to calculate annual cash
bonuses for certain employees.
However, FFO should not be viewed as an
alternative measure of our operating performance because it does
not reflect either depreciation and amortization costs or the level
of capital expenditures and leasing costs necessary to maintain the
operating performance of our properties, which are significant
economic costs and could materially impact our results from
operations.
(2)
HPP's share is a Non-GAAP financial
measure calculated as the measure on a consolidated basis, in
accordance with GAAP, plus our Operating Partnership’s share of the
measure from our unconsolidated joint ventures (calculated based
upon the Operating Partnership’s percentage ownership interest),
minus our partners’ share of the measure from our consolidated
joint ventures (calculated based upon the partners’ percentage
ownership interests). We believe that presenting HPP’s share of
these measures provides useful information to investors regarding
the Company’s financial condition and/or results of operations
because we have several significant joint ventures, and in some
cases, we exercise significant influence over, but do not control,
the joint venture. In such instances, GAAP requires us to account
for the joint venture entity using the equity method of accounting,
which we do not consolidate for financial reporting purposes. In
other cases, GAAP requires us to consolidate the venture even
though our partner(s) own(s) a significant percentage interest.
Adjusted Funds from
Operations(1)
Unaudited, in thousands, except per share
data
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
FFO (excluding specified items)
$
34,496
$
74,603
$
84,165
$
149,758
Adjustments:
GAAP non-cash revenue (straight-line rent
and above/below-market rents)
(2,660
)
(9,770
)
(11,796
)
(21,760
)
GAAP non-cash expense (straight-line rent
expense and above/below-market ground rent)
1,814
970
3,637
1,936
Non-real estate depreciation and
amortization
8,832
4,485
17,224
8,917
Non-cash interest expense
5,025
2,407
9,701
4,810
Non-cash compensation expense
6,229
5,993
11,385
11,322
Recurring capital expenditures, tenant
improvements and lease commissions
(22,599
)
(18,386
)
(48,124
)
(35,885
)
AFFO
$
31,137
$
60,302
$
66,192
$
119,098
(1)
Adjusted Funds from Operations ("AFFO") is
a non-GAAP financial measure we believe is a useful supplemental
measure of our performance. We compute AFFO by adding to FFO
(excluding specified items) HPP's share of non-cash compensation
expense and amortization of deferred financing costs, and
subtracting recurring capital expenditures related to HPP's share
of tenant improvements and leasing commissions (excluding
pre-existing obligations on contributed or acquired properties
funded with amounts received in settlement of prorations), and
eliminating the net effect of HPP’s share of straight-line rents,
amortization of lease buy-out costs, amortization of above-and
below-market lease intangible assets and liabilities, amortization
of above-and below-market ground lease intangible assets and
liabilities and amortization of loan discounts/premiums. AFFO is
not intended to represent cash flow for the period. We believe that
AFFO provides useful information to the investment community about
our financial position as compared to other REITs since AFFO is a
widely reported measure used by other REITs. However, other REITs
may use different methodologies for calculating AFFO and,
accordingly, our AFFO may not be comparable to other REITs.
Net Operating Income(1)
Unaudited, in thousands
Three Months Ended June
30,
2023
2022
Net (loss) income
$
(31,474
)
$
3,546
Adjustments:
Loss (income) from unconsolidated real
estate entities
715
(1,780
)
Fee income
(2,284
)
(1,140
)
Interest expense
54,648
33,719
Interest income
(236
)
(920
)
Management services reimbursement
income—unconsolidated real estate entities
(1,059
)
(1,068
)
Management services expense—unconsolidated
real estate entities
1,059
1,068
Transaction-related expenses
(2,530
)
1,126
Unrealized loss on non-real estate
investment
843
1,818
Impairment loss
—
3,250
Gain on extinguishment of debt
(10,000
)
—
Other (income) expense
(138
)
21
Income tax provision (benefit)
6,302
(763
)
General and administrative
18,941
21,871
Depreciation and amortization
98,935
91,438
NOI
$
133,722
$
152,186
NOI Detail
Same-store office cash revenues
189,190
181,225
Straight-line rent
3,049
12,640
Amortization of above/below-market leases,
net
1,589
1,891
Amortization of lease incentive costs
(262
)
(398
)
Same-store office revenues
193,566
195,358
Same-store studios cash revenues
17,153
20,025
Straight-line rent
417
646
Amortization of lease incentive costs
(9
)
(9
)
Same-store studio revenues
17,561
20,662
Same-store revenues
211,127
216,020
Same-store office cash expenses
69,322
67,196
Straight-line rent
399
402
Non-cash compensation expense
35
25
Amortization of above/below-market ground
leases, net
676
675
Same-store office expenses
70,432
68,298
Same-store studio cash expenses
9,396
12,152
Non-cash compensation expense
113
69
Same-store studio expenses
9,509
12,221
Same-store expenses
79,941
80,519
Same-store NOI
131,186
135,501
Non-same-store NOI
2,536
16,685
NOI
$
133,722
$
152,186
(1)
We evaluate performance based upon
property Net Operating Income ("NOI") from continuing operations.
NOI is not a measure of operating results or cash flows from
operating activities or cash flows as measured by GAAP and should
not be considered an alternative to income from continuing
operations, as an indication of our performance, or as an
alternative to cash flows as a measure of liquidity, or our ability
to make distributions. All companies may not calculate NOI in the
same manner. We consider NOI to be a useful performance measure to
investors and management because when compared across periods, NOI
reflects 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. We calculate NOI as net income (loss)
excluding corporate general and administrative expenses,
depreciation and amortization, impairments, gains/losses on sales
of real estate, interest expense, transaction-related expenses and
other non-operating items. We define NOI as operating revenues
(rental revenues, other property-related revenue, tenant recoveries
and other operating revenues), less property-level operating
expenses (external management fees, if any, and property-level
general and administrative expenses). NOI on a cash basis is NOI
adjusted to exclude the effect of straight-line rent and other
non-cash adjustments required by GAAP. We believe that NOI on a
cash basis is helpful to investors as an additional measure of
operating performance because it eliminates straight-line rent and
other non-cash adjustments to revenue and expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801989169/en/
Investor Contact Laura Campbell Executive Vice President,
Investor Relations & Marketing (310) 622-1702
lcampbell@hudsonppi.com
Media Contact Laura Murray Senior Director,
Communications (310) 622-1781 lmurray@hudsonppi.com
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