WAKEFIELD, MA--(Marketwire -02/21/12)- Franklin Street Properties Corp. (the "Company," "FSP," "we" or "our") (AMEX: FSP - News), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $18.5 million and $71.2 million, or $0.22 and $0.87 per share, for the fourth quarter and year ended December 31, 2011, respectively. The Company also announced Net Income of $5.1 million and $43.5 million and Earnings Per Share (EPS) of $0.06 and $0.53 for the fourth quarter and year ended December 31, 2011, respectively, and provided an update on other activities.
The Company evaluates its performance based on Net Income, EPS, FFO, Gains on Sales (GOS) and FFO+GOS, and believes each is an important measure. A reconciliation of Net Income to FFO and FFO+GOS, which are non-GAAP financial measures, is provided prior to the supplemental information.
Three Months Ended
December 31, Year Ended December 31,
-------------------------- --------------------------
(in thousands except Increase Increase
per share data) 2011 2010 (Decrease) 2011 2010 (Decrease)
------- ------- ---------- ------- ------- ----------
Net Income $ 5,062 $ 5,819 $ (757) $43,524 $22,093 $ 21,431
======= ======= ========== ======= ======= ==========
FFO $18,459 $17,519 $ 940 $71,210 $66,922 $ 4,288
GOS - - - 21,939 - 21,939
------- ------- ---------- ------- ------- ----------
FFO+GOS $18,459 $17,519 $ 940 $93,149 $66,922 $ 26,227
======= ======= ========== ======= ======= ==========
Per Share Data:
EPS $ 0.06 $ 0.07 $ (0.01) $ 0.53 $ 0.28 $ 0.25
FFO $ 0.22 $ 0.22 $ - $ 0.87 $ 0.84 $ 0.03
GOS $ - $ - $ - $ 0.27 $ - $ 0.27
FFO+GOS $ 0.22 $ 0.22 $ - $ 1.14 $ 0.84 $ 0.30
Weighted average
shares (diluted) 82,937 80,187 2,750 81,857 79,826 2,031
------- ------- ---------- ------- ------- ----------
Comparing results for the fourth quarter of 2011 to 2010, Net Income and EPS decreased $0.8 million or $0.01 per share, FFO increased $0.9 million and FFO+GOS increased $0.9 million. The increase in FFO was primarily attributable to an increase in real estate FFO of $2.1 million and a decrease in investment banking FFO of $1.2 million. The increase in real estate FFO was primarily from three new acquisitions made in March 2011, a new acquisition in September 2011 and another acquisition in October 2011, and the benefits of increased occupancy in the real estate portfolio at December 31, 2011, compared to December 31, 2010, and was partially offset by the sale of two properties in 2011. One was a property in Falls Church, Virginia sold in January 2011 and the other was a property in Savage, Maryland sold in June 2011. The decrease from investment banking resulted from lower sales of securities by our investment bank, which was $9.2 million for the fourth quarter of 2011 as compared to $25.3 million in the fourth quarter of 2010. Revenue from our investment bank was primarily based on the value of the securities sales. There was no GOS during the fourth quarter of 2011 or 2010.
Comparing results for the years ended December 31, 2011 to the same period in 2010, Net Income and EPS increased $21.4 million or $0.25 per share, FFO increased $4.3 million or $0.03 per share and FFO+GOS increased $26.2 million or $0.30 per share. The increase in FFO was primarily attributable to an increase in real estate FFO of $1.6 million and an increase in investment banking FFO of $2.7 million. The increase in real estate FFO was primarily from three new acquisitions made in March 2011, a new acquisition in September 2011 and another acquisition in October 2011, and the benefits of increased occupancy in the real estate portfolio at December 31, 2011, compared to December 31, 2010, and was partially offset by the sale of two properties in 2011. The increase in investment banking FFO resulted from greater sales of securities by our investment bank, which were $66.8 million during the year ended December 31, 2011 as compared to $36.0 million for the same period in 2010. Revenue from our investment bank was primarily based on the value of the securities sales. The sale of a property in January 2011 located in Falls Church, Virginia contributed $19.6 million and the sale of a property in June 2011 located in Savage, Maryland contributed $2.3 million, or in the aggregate, $0.27 per share of GOS for the year ended December 31, 2011. There was no GOS during the same period in 2010.
George J. Carter, President and CEO, commented as follows:
"For the fourth quarter of 2011, FSP's profits as represented by FFO totaled approximately $18.5 million or $0.22 per share, an increase of approximately $2.1 million or $0.2 per share compared to the third quarter of 2011. Dividend distributions declared for the fourth quarter of 2011, which are payable on February 16, 2012, are approximately $15.8 million or $0.19 per share. For the full-year 2011, FSP's profits as represented by FFO totaled approximately $71.2 million or $0.87 per share, an increase of approximately $4.3 million or $.03 per share compared to full-year 2010. For the full-year 2011, FSP's profits as represented by FFO+GOS totaled approximately $93.1 million or $1.14 per share, an increase of approximately $26.2 million or $0.30 per share compared to full-year 2010.
"Our directly-owned real estate portfolio of 36 properties totaling 7,052,068 square feet was approximately 88.7% leased as of December 31, 2011, up from approximately 88.1% leased as of September 30, 2011. Our property portfolio is primarily suburban office assets. Most of the rental/leasing markets where our properties are located remained stable during the fourth quarter, with some markets showing moderate improvement in occupancy and rental-rate levels. The nation's slow employment growth as well as financial and regulatory uncertainty appear to be factors in deferring many corporate decisions on potential future office space needs. However, we continue to make steady leasing progress in our portfolio. With relatively modest lease expirations over the next three years, we have as our objective to move overall occupancy levels to the 90+% range during 2012.
"There was one new real estate investment completed in the fourth quarter of 2011 for a total initial capital contribution of approximately $76.2 million. The investment is a two-year bridge loan secured by a first mortgage on a CBD office/retail property in Minneapolis, Minnesota. The property is owned by FSP 50 South Tenth Street Corp., a single-asset-REIT affiliate of FSP. The loan also includes a revolving line of credit component for up to $30 million to be used for lender-approved tenant improvement costs, leasing commissions and other incentives necessary to lease space at the property. Consequently, the total loan commitment amount is $106.2 million. The property is a 12-story Class A multi-tenant office/retail property, built in 2001, containing approximately 498,768 rentable square feet of which approximately 90% is office space. FSP sponsored the syndication of the shares of preferred stock in FSP 50 South Tenth Street Corp. between November 2006 and January 2007. The property has maintained an average occupancy in excess of 98% over the past five years and, as of December 31, 2011, was approximately 98.8% leased. The property is located between and connected by a sky-bridge directly to the Target Corporation and U.S. Bancorp corporate headquarters buildings in downtown Minneapolis. FSP has four office properties in the greater Minneapolis area, either owned directly or through affiliates, totaling approximately 1.4 million square feet.
"Additional real estate investments during 2012 are a major objective of FSP. In addition, certain properties owned by some of our single-asset REIT affiliates may be possible candidates for sale as they stabilize their occupancies and the markets in which they are located become more attractive to potential acquirers. There were no property dispositions in the fourth quarter of 2011.
"During the fourth quarter of 2011, we completed the full $62 million subscription of our private placement offering, FSP Union Centre Corp., which began in March. On December 15, 2011, we announced that FSP Investments LLC, our broker-dealer subsidiary, will no longer sponsor the syndication of preferred stock in newly-formed single property companies. FSP Investments LLC may sponsor other types of real estate investments in the future. FSP will continue to manage all the affairs of the 16 existing single property companies that sit outside of FSP. FSP, its subsidiaries and affiliates, and the employees, officers and directors thereof will continue to fulfill and provide all of the responsibilities/duties and services to the individual stockholders of those 16 existing single property companies and the assets that they own as they have done in the past. FSP has meaningful equity and first mortgage loan investments in many of these entities and receives on-going asset management fees from all of them. Original capitalization of these 16 single property companies was in excess of $900 million.
"We believe FSP continues to be in an excellent position to achieve meaningful long term profit growth. Our company will continue to use its capabilities and strong balance sheet to take advantage of competitive tenant leasing requirements and attractive real estate investment opportunities that are presenting themselves as a result of the current cyclical softness in the economy and certain commercial property markets. We are very much looking forward to 2012 and beyond."
Dividend Announcement
On January 13, 2012, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended December 31, 2011 of $0.19 per share of common stock payable on February 16, 2012 to stockholders of record on January 27, 2012.
Real Estate Update
Supplementary Schedules D and E provide property information for our continuing real estate portfolio of 36 properties and for three non-consolidated REITs that we had preferred stock interests in as of December 31, 2011. The Company will also be filing a supplemental information package that will provide stockholders and the financial community with additional operating and financial data. The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com.
A reconciliation of Net Income to FFO and FFO+GOS is shown below and definitions of FFO and FFO+GOS are provided on Supplementary Schedule I. We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently. We also believe that FFO+GOS is an important measure as it considers investment performance.
Reconciliation of Net Income to
FFO and FFO+GOS: Three Months Ended Year Ended
December 31, December 31,
-------------------- --------------------
(In thousands, except per share
amounts) 2011 2010 2011 2010
--------- --------- --------- ---------
Net income $ 5,062 $ 5,819 $ 43,524 $ 22,093
Less gain on sale of
properties - - (21,939) -
GAAP (income) loss from non-
consolidated REITs (978) (152) (4,490) (1,190)
Distributions from non-
consolidated REITs 970 1,247 5,056 5,170
Acquisition costs of new
properties 157 - 620 125
Depreciation & amortization 13,248 10,605 48,439 40,724
--------- --------- --------- ---------
Funds From Operations (FFO) 18,459 17,519 71,210 66,922
Plus gains on sales of assets
(GOS) - - 21,939 -
--------- --------- --------- ---------
FFO+GOS $ 18,459 $ 17,519 $ 93,149 $ 66,922
========= ========= ========= =========
Per Share Data
EPS $ 0.06 $ 0.07 $ 0.53 $ 0.28
FFO $ 0.22 $ 0.22 $ 0.87 $ 0.84
GOS $ - $ - $ 0.27 $ -
FFO+GOS $ 0.22 $ 0.22 $ 1.14 $ 0.84
Weighted average shares (basic
and diluted) 82,937 80,187 81,857 79,826
========= ========= ========= =========
Today's news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com. We routinely post information that may be important to investors in the Investor Relations section of our website. We encourage investors to consult that section of our website regularly for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted, to sign up for E-mail Alerts.
A conference call is scheduled for February 22, 2012 at 10:00 a.m. (ET) to discuss the fourth quarter 2011 results. To access the call, please dial 1-877-317-6789. Internationally, the call may be accessed by dialing 1-412-317-6789. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website (www.franklinstreetproperties.com) at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.
About Franklin Street Properties Corp.
Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on achieving current income and long-term growth through investments in commercial properties. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.
Forward-Looking Statements
Statements made in this press release that state FSP's or management's intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, changes in government regulations, geopolitical events and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the "Risk Factors" set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2011, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.
Franklin Street Properties Corp.
Earnings Release
Supplementary information
Table of Contents
Franklin Street Properties Corp. Financial Results A-C
Real Estate Portfolio Summary Information D
Portfolio and Other Supplementary Information E
Quarterly Information F
Percentage of Leased Space G
Largest 20 Tenants - FSP Owned Portfolio H
Definition of Funds From Operations (FFO) and FFO+GOS I
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income Statements
(Unaudited)
For the For the
Three Months Ended Year Ended
December 31, December 31,
----------------------------------------------------------------------------
(in thousands, except per share
amounts) 2011 2010 2011 2010
----------------------------------------------------------------------------
Revenue:
Revenues:
Rental $ 37,014 $ 29,782 $135,391 $114,638
Related party revenue:
Management fees and interest income
from loans 1,051 719 4,046 2,440
Other 29 54 49 88
----------------------------------------------------------------------------
Total revenues 38,094 30,555 139,486 117,166
----------------------------------------------------------------------------
Expenses:
Real estate operating expenses 9,862 9,602 36,685 33,600
Real estate taxes and insurance 5,426 4,430 20,433 18,077
Depreciation and amortization 13,124 9,694 48,249 36,155
Selling, general and administrative 2,012 1,698 6,913 6,399
Interest 3,261 2,004 12,666 7,284
----------------------------------------------------------------------------
Total expenses 33,685 27,428 124,946 101,515
----------------------------------------------------------------------------
Income before interest income, equity
in earnings of non-consolidated
REITs and taxes on income 4,409 3,127 14,540 15,651
Interest income 3 4 22 25
Equity in earnings of non-
consolidated REITs 978 228 3,685 1,266
----------------------------------------------------------------------------
Income before taxes on income 5,390 3,359 18,247 16,942
Taxes on income 82 55 267 217
----------------------------------------------------------------------------
Income from continuing operations 5,308 3,304 17,980 16,725
----------------------------------------------------------------------------
Discontinued operations:
Income from discontinued operations,
net of income tax (246) 2,515 3,605 5,368
Gain on sale of properties, less
applicable income tax - - 21,939 -
----------------------------------------------------------------------------
Total discontinued operations (246) 2,515 25,544 5,368
----------------------------------------------------------------------------
Net income $ 5,062 $ 5,819 $ 43,524 $ 22,093
============================================================================
Weighted average number of shares
outstanding, basic and diluted 82,937 80,187 81,857 79,826
============================================================================
Earnings per share, basic and diluted,
attributable to:
Continuing operations $ 0.06 $ 0.04 $ 0.22 $ 0.21
Discontinued operations - 0.03 0.31 0.07
----------------------------------------------------------------------------
Net income per share, basic and diluted $ 0.06 $ 0.07 $ 0.53 $ 0.28
============================================================================
Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and par value December 31, December 31,
amounts) 2011 2010
----------------------------------------------------------------------------
Assets:
Real estate assets, net $ 1,006,221 $ 862,698
Acquired real estate leases, less accumulated
amortization of $31,189 and $19,294,
respectively 91,613 40,578
Investment in non-consolidated REITs 87,598 89,327
Assets held for syndication, net - 2,976
Assets held for sale - 74,947
Cash and cash equivalents 23,813 68,213
Restricted cash 493 420
Tenant rent receivables, less allowance for
doubtful accounts of $1,235 and $1,600,
respectively 1,460 1,922
Straight-line rent receivable, less allowance
for doubtful accounts of $135 and $700,
respectively 28,545 18,584
Prepaid expenses 1,223 1,654
Related party mortgage loan receivable 140,516 57,684
Other assets 4,070 853
Office computers and furniture, net of
accumulated depreciation of $428 and $493,
respectively 468 503
Deferred leasing commissions, net of accumulated
amortization of $9,220 and $7,175, respectively 22,641 18,376
----------------------------------------------------------------------------
Total assets $ 1,408,661 $ 1,238,735
============================================================================
Liabilities and Stockholders' Equity:
Liabilities:
Bank note payable $ 449,000 $ 209,968
Term loan payable - 74,850
Accounts payable and accrued expenses 26,446 22,435
Accrued compensation 2,222 1,803
Tenant security deposits 2,008 1,930
Other liabilities: derivative termination
value - 1,077
Acquired unfavorable real estate leases, less
accumulated amortization of $3,759 and
$2,744, respectively 7,618 5,114
----------------------------------------------------------------------------
Total liabilities 487,294 317,177
----------------------------------------------------------------------------
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $.0001 par value, 20,000,000
shares authorized, none issued or outstanding - -
Common stock, $.0001 par value, 180,000,000
shares authorized, 82,937,405 and 81,437,405
shares issued and outstanding, respectively 8 8
Additional paid-in capital 1,042,876 1,025,491
Accumulated other comprehensive loss - (1,077)
Accumulated distributions in excess of
accumulated earnings (121,517) (102,864)
----------------------------------------------------------------------------
Total stockholders' equity 921,367 921,558
----------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 1,408,661 $ 1,238,735
============================================================================
Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the
Year Ended
December 31,
-----------------------
(in thousands) 2011 2010
----------------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 43,524 $ 22,093
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 50,261 39,627
Amortization of above market lease (47) 1,362
Gain on sale of real estate assets (21,939) -
Equity in earnings of non-consolidated REITs (3,086) (1,183)
Distributions from non-consolidated REITs 3,474 1,633
Increase (decrease) in bad debt reserve (365) 980
Changes in operating assets and liabilities:
Restricted cash (73) (86)
Tenant rent receivables, net 827 (1,120)
Straight-line rents, net (9,878) (4,249)
Prepaid expenses and other assets, net 1,611 865
Accounts payable and accrued expenses 4,213 (351)
Accrued compensation 419 387
Tenant security deposits 78 122
Payment of deferred leasing commissions (8,058) (10,515)
----------------------------------------------------------------------------
Net cash provided by operating activities 60,961 49,565
----------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of real estate assets, office computers
and furniture (174,020) (38,781)
Acquired real estate leases (62,230) (15,563)
Investments in non-consolidated REITs (10) (11)
Distributions in excess of earnings from non-
consolidated REITs 1,582 3,537
Investment in related party mortgage loan
receivable (82,832) (21,149)
Changes in deposits on real estate assets 200 (200)
Investment in assets held for syndication, net 2,230 1,319
Proceeds received on sales of real estate assets 96,790 -
----------------------------------------------------------------------------
Net cash used in investing activities (218,290) (70,848)
----------------------------------------------------------------------------
Cash flows from financing activities:
Distributions to stockholders (62,177) (60,586)
Proceeds from offering 18,001 22,701
Equity offering costs (706) (833)
Borrowings under bank note payable 449,000 100,960
Repayment of bank note payable (209,968) -
Repayment of term loan payable (74,850) (150)
Deferred financing costs (5,388) -
Swap termination payment (983) -
----------------------------------------------------------------------------
Net cash provided by financing activities 112,929 62,092
----------------------------------------------------------------------------
Net decrease in cash and cash equivalents (44,400) 40,809
Cash and cash equivalents, beginning of period 68,213 27,404
----------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 23,813 $ 68,213
============================================================================
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary Information
(Unaudited & Approximated)
Commercial portfolio lease expirations (1)
As of December 31, 2011
Total % of
Year Square Feet Portfolio
-------------- ------------- -------------
2012 287,371 4.1%
2013 444,965 6.3%
2014 425,504 6.0%
2015 796,239 11.3%
2016 922,543 13.1%
Thereafter (2) 4,175,446 59.2%
----------------------------
7,052,068 100.0%
============================
(1) Percentages are determined based upon square footage of
expiring commercial leases.
(2) Includes 793,574 square feet of current vacancies.
(dollars & square
feet in thousands) As of December 31, 2011
--------------------------------------------------------
# of % of Square % of
State Properties Investment Portfolio Feet Portfolio
---------- ------------ --------- -------- ---------
Texas 10 $ 295,264 29.3% 2,028 28.8%
Colorado 4 125,615 12.5% 789 11.2%
Virginia 4 101,537 10.1% 685 9.7%
Minnesota 2 38,174 3.8% 626 8.9%
Missouri 3 68,077 6.8% 477 6.8%
North Carolina 3 68,740 6.8% 431 6.1%
Georgia 1 71,627 7.1% 387 5.5%
Illinois 2 50,523 5.0% 372 5.3%
Maryland 1 54,344 5.4% 325 4.6%
Michigan 1 14,995 1.5% 215 3.0%
Florida 1 46,919 4.7% 213 3.0%
Indiana 1 34,668 3.4% 205 2.9%
California 2 21,503 2.1% 182 2.6%
Washington 1 14,235 1.4% 117 1.7%
----------------------------------- -------------------
36 $ 1,006,221 100.0% 7,052 100.0%
=================================== ===================
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
Capital Expenditures
Owned Portfolio Twelve Months Ended
--------------------------
(in thousands) 31-Dec-11 31-Dec-10
------------ ------------
Tenant improvements $ 19,032 $ 7,000
Deferred leasing costs 8,058 10,515
Building improvements 2,826 2,602
------------ ------------
$ 29,916 $ 20,117
============ ============
Square foot & leased percentages December 31, December 31,
2011 2010
------------ ------------
Owned portfolio of commercial real estate
Number of properties (1) 36 33
Square feet 7,052,068 6,422,357
Leased percentage 89% 86%
Preferred stock investments in non-consolidated
REITs
Number of properties 3 3
Square feet 2,001,542 1,995,913
Leased percentage 87% 77%
Single Asset REITs (SARs) managed
Number of properties 13 12
Square feet 3,322,639 2,915,896
Leased percentage 80% 75%
Total owned, investments & managed properties
Number of properties 52 48
Square feet 12,376,249 11,334,166
Leased percentage 86% 81%
(1) Includes asset held for sale at 12/31/2010
The following table shows property information for our preferred stock
investments in non-consolidated REITs:
%
Square % Leased Interest
Single Asset REIT name City State Feet 31-Dec-11 Held
----------------------------- ----------- ----- --------- --------- --------
FSP 303 East Wacker Drive
Corp. Chicago IL 844,953 94.0% 43.7%
FSP Grand Boulevard Corp. Kansas City MO 535,717 82.4% 27.0%
FSP Phoenix Tower Corp. Houston TX 620,872 82.0% 4.6%
-------------------
2,001,542 87.1%
-------------------
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F: Quarterly Information
(Unaudited)
(in thousands)
Q1 Q2 Q3 Q4 Annual
Revenue: 2011 2011 2011 2011 2011
-------- -------- -------- -------- --------
Rental $ 31,099 $ 33,606 $ 33,672 $ 37,014 $135,391
Related party revenue:
Management fees and
interest income from
loans 808 1,150 1,037 1,051 4,046
Other 6 7 7 29 49
----------------------------------------------------------------------------
Total revenues 31,913 34,763 34,716 38,094 139,486
----------------------------------------------------------------------------
Expenses:
Real estate operating
expenses 8,730 8,765 9,328 9,862 36,685
Real estate taxes and
insurance 4,759 5,228 5,020 5,426 20,433
Depreciation and
amortization 10,745 12,029 12,351 13,124 48,249
Selling, general and
administrative 1,645 1,602 1,654 2,012 6,913
Interest 2,408 3,578 3,419 3,261 12,666
----------------------------------------------------------------------------
Total expenses 28,287 31,202 31,772 33,685 124,946
----------------------------------------------------------------------------
Income before interest
income, equity in
earnings of non-
consolidated REITs and
taxes on income 3,626 3,561 2,944 4,409 14,540
Interest income 11 5 3 3 22
Equity in earnings of
non-consolidated REITs 968 1,166 573 978 3,685
----------------------------------------------------------------------------
Income before taxes on
income 4,605 4,732 3,520 5,390 18,247
Taxes on income 50 68 67 82 267
----------------------------------------------------------------------------
Income from continuing
operations 4,555 4,664 3,453 5,308 17,980
----------------------------------------------------------------------------
Discontinued operations:
Income from discontinued
operations, net of tax 619 3,371 (139) (246) 3,605
Gain on sale of
properties, less
applicable income tax 19,593 2,346 - - 21,939
----------------------------------------------------------------------------
Total discontinued
operations 20,212 5,717 (139) (246) 25,544
----------------------------------------------------------------------------
Net income $ 24,767 $ 10,381 $ 3,314 $ 5,062 $ 43,524
============================================================================
FFO and FFO+GOS
calculations:
Net income $ 24,767 $ 10,381 $ 3,314 $ 5,062 $ 43,524
----------------------------------------------------------------------------
(Gain) Loss on sale of
assets (19,593) (2,346) - - (21,939)
GAAP income from non-
consolidated REITs (1,773) (1,166) (573) (978) (4,490)
Distributions from non-
consolidated REITs 1,767 1,215 1,104 970 5,056
Acquisition costs 269 9 185 157 620
Depreciation of real
estate & intangible
amortization 10,812 12,047 12,332 13,248 48,439
----------------------------------------------------------------------------
Funds From Operations
(FFO) 16,249 20,140 16,362 18,459 71,210
Plus gains on sales of
assets 19,593 2,346 - - 21,939
----------------------------------------------------------------------------
FFO+GOS $ 35,842 $ 22,486 $ 16,362 $ 18,459 $ 93,149
============================================================================
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Percentage of Leased Space
(Unaudited & Estimated)
Third Fourth
Quarter Quarter
Average Average
% Leased % % Leased %
Square (1) as of Leased (1) as of Leased
Property Name Location Feet 30-Sep-11 (2) 31-Dec-11 (2)
------------- ------------- --------- --------- ------- --------- -------
1 PARK SENECA Charlotte, NC 109,550 80.9% 80.5% 80.6% 80.6%
2 HILLVIEW Milpitas, CA
CENTER 36,288 100.0% 100.0% 100.0% 100.0%
3 SOUTHFIELD Southfield,
MI 214,697 39.2% 39.2% 39.2% 39.2%
4 FOREST PARK Charlotte, NC 62,212 100.0% 100.0% 100.0% 100.0%
5 CENTENNIAL Colorado
Springs, CO 110,405 66.9% 66.9% 85.4% 73.0%
6 MEADOW POINT Chantilly, VA 138,537 100.0% 100.0% 100.0% 100.0%
7 TIMBERLAKE Chesterfield,
MO 232,766 97.7% 97.7% 97.7% 97.7%
8 FEDERAL WAY Federal Way,
WA 117,010 42.0% 42.0% 47.0% 44.3%
9 NORTHWEST Elk Grove
POINT Village, IL 176,848 100.0% 100.0% 100.0% 100.0%
10 TIMBERLAKE Chesterfield,
EAST MO 116,197 85.9% 90.6% 85.9% 85.9%
11 PARK TEN Houston, TX 155,715 98.8% 98.8% 81.2% 81.2%
12 MONTAGUE San Jose, CA 145,951 100.0% 100.0% 100.0% 100.0%
13 ADDISON Addison, TX 293,787 95.8% 95.8% 95.8% 95.8%
14 COLLINS Richardson,
CROSSING TX 298,766 88.4% 88.4% 88.4% 88.4%
15 GREENWOOD Englewood, CO
PLAZA 197,527 54.3% 54.3% 48.9% 48.4%
16 RIVER Indianapolis,
CROSSING IN 205,059 93.5% 93.5% 93.5% 93.5%
17 LIBERTY PLAZA Addison, TX 218,934 68.6% 68.0% 77.9% 74.8%
18 INNSBROOK Glen Allen,
VA 298,456 86.8% 78.8% 98.3% 90.7%
19 380 Broomfield,
INTERLOCKEN CO 240,184 85.1% 85.1% 85.1% 85.1%
20 BLUE LAGOON Miami, FLA 212,619 100.0% 100.0% 100.0% 100.0%
21 ELDRIDGE Houston, TX
GREEN 248,399 100.0% 100.0% 100.0% 100.0%
22 WILLOW BEND Plano, TX 116,622 83.1% 83.1% 83.1% 83.1%
23 ONE OVERTON Atlanta, GA
PARK 387,267 90.4% 90.6% 89.3% 90.0%
24 390 Broomfield,
INTERLOCKEN CO 241,516 96.6% 96.9% 93.4% 94.3%
25 EAST Baltimore, MD
BALTIMORE 325,445 55.7% 55.7% 55.7% 55.7%
26 PARK TEN Houston, TX
PHASE II 156,746 100.0% 100.0% 100.0% 100.0%
27 LAKESIDE Maryland
CROSSING I Heights, MO 127,778 100.0% 100.0% 100.0% 100.0%
28 LOUDOUN TECH Dulles, VA 135,888 100.0% 100.0% 100.0% 100.0%
29 4807 Chantilly, VA
STONECROFT 111,469 100.0% 100.0% 100.0% 100.0%
30 EDEN BLUFF Eden Prairie,
MN 153,028 100.0% 100.0% 100.0% 100.0%
31 121 SOUTH Minneapolis,
EIGHTH ST MN 472,616 93.6% 93.1% 93.6% 93.6%
32 EMPEROR Durham, NC
BOULEVARD 259,531 100.0% 100.0% 100.0% 100.0%
33 LEGACY Plano, TX
TENNYSON CTR 202,600 100.0% 100.0% 100.0% 100.0%
34 ONE LEGACY Plano, TX 214,110 100.0% 100.0% 100.0% 100.0%
35 909 DAVIS Evanston, IL 195,245 94.8% 94.8% 94.8% 94.8%
36 1410 EAST Richardson,
RENNER TX 122,300 n/a n/a 100.0% 100.0%
--------- --------- ------- --------- -------
TOTAL WEIGHTED AVERAGE 7,052,068 88.1% 87.7% 88.7% 88.1%
--------- --------- ------- --------- -------
(1) % Leased as of month's end includes all leases that expire on the last
day of the quarter.
(2) Average quarterly percentage is the average of the end of the month
leased percentage for each of the 3 months during the quarter.
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule H
Largest 20 Tenants - FSP Owned Portfolio
(Unaudited & Estimated)
The following table includes the largest 20 tenants in FSP's owned portfolio
based on leased square feet:
As of December 31, 2011
% of
Tenant Sq Ft SIC Code Portfolio
-------------------------------------------- --------- -------- ---------
1 TCF National Bank 267,470 60 3.8%
2 Quintiles Transnational Corp 259,531 87 3.7%
3 CITGO Petroleum Corporation 248,399 29 3.5%
4 Burger King Corporation 212,619 58 3.0%
5 Denbury Onshore LLC 202,600 13 2.9%
6 RGA Reinsurance Company 185,501 63 2.6%
7 SunTrust Bank 182,888 60 2.6%
8 Citicorp Credit Services, Inc 176,848 61 2.5%
9 C.H. Robinson Worldwide, Inc 153,028 47 2.2%
10 Houghton Mifflin Harcourt Publishing Company 150,050 27 2.1%
11 Murphy Exploration & Production Company 144,677 13 2.1%
12 Giesecke & Devrient America, Inc. 135,888 73 1.9%
13 Monsanto Company 127,778 28 1.8%
14 Vail Holdings, Inc. 125,632 79 1.8%
15 AT&T Services, Inc. 122,300 48 1.7%
16 Argo Data Resource Corporation 111,687 73 1.6%
17 Northrop Grumman Systems Corporation 111,469 73 1.6%
18 Alliance Data Systems 96,749 73 1.4%
19 Federal National Mortgage Association 92,358 61 1.3%
20 Amdocs, Inc 91,928 73 1.3%
--------- ---------
Total 3,199,400 45.4%
--------- ---------
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule I
Definition of Funds From Operations ("FFO"),
and FFO plus Gains on Sales ("FFO+GOS")
The Company evaluates the performance based on several measures, including Funds From Operations, or FFO, because management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (determined in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs.
FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an indicator of the Company's financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company's liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company's needs. Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.
John Demeritt
(877) 686-9496
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