Franklin Street Properties Corp. Announces Fourth Quarter & Year End 2012 Results

Marketwired

WAKEFIELD, MA--(Marketwire - Feb 19, 2013) - Franklin Street Properties Corp. (the "Company," "FSP," "we" or "our") (NYSE MKT: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $20.5 million or $0.25 per share for the fourth quarter ended December 31, 2012; and FFO of $79.0 million or $0.95 per share for the full year ended December 31, 2012. Net income was $5.5 million or $0.07 per share for the fourth quarter and $7.6 million or $0.09 per share for the year ended December 31, 2012. 

The Company evaluates its performance based on FFO, Net Income and EPS and believes each is an important measure. A reconciliation of Net Income to FFO, which is a non-GAAP financial measure, is provided on page 3 of this press release.

           
    Three Months Ended
December 31,
  Year Ended
December 31,
 
(in 000's except per share data)   2012   2011   Increase
(Decrease)
  2012   2011   Increase
(Decrease)
 
                                       
Net Income   $ 5,460   $ 5,062   $ 398   $ 7,633   $ 43,524   $ (35,891 )
                                       
FFO   $ 20,515   $ 18,457   $ 2,058   $ 79,041   $ 71,210   $ 7,831  
Per Share Data:                                      
EPS   $ 0.07   $ 0.06   $ 0.01   $ 0.09   $ 0.53   $ (0.44 )
FFO   $ 0.25   $ 0.22   $ 0.03   $ 0.95   $ 0.87   $ 0.08  
                                       
Weighted average shares (diluted)     82,937     82,937     -     82,937     81,857     1,080  
                                       

Comparing results for the fourth quarter of 2012 to the same period in 2011, FFO increased $2.1 million or $0.03 per share. The FFO increase was primarily from higher property income due to three acquisitions completed since October 2011 and improved occupancy in our portfolio, and increased interest income from secured real estate loans, which was partially offset by higher interest expense and G&A. Net Income and EPS was $5.5 million or $0.07 per share for the fourth quarter of 2012 compared to net income of $5.1 million and $0.06 per share for the fourth quarter of 2011. 

Comparing results for the year ended December 31, 2012 to 2011, FFO increased $7.8 million or $0.08 per share. The FFO increase was primarily from higher property income due to seven acquisitions completed since the start of 2011 and improved occupancy in our portfolio, and increased interest income from loans on secured real estate, which was partially offset by higher interest expense and G&A. Net Income and EPS was $7.6 million and $0.09 per share, respectively, for the year ended December 31, 2012 compared to net income of $43.5 million and $0.53 per share for the same period in 2011. For the year ended December 31, 2012, Net Income includes the effect of a loss from discontinued operations of $15.7 million or $0.19 per share. The loss included a $14.8 million loss on a property sold in December and $0.9 million in losses from the operations of the property we sold. 

George J. Carter, President and CEO, commented as follows:

"For the fourth quarter of 2012, FSP's profits as represented by FFO totaled approximately $20.5 million or $0.25 per share, an increase of approximately $0.6 million or $0.01 per share compared to the third quarter of 2012. Dividend distributions declared for the fourth quarter of 2012, which are payable on February 14, 2013, will be approximately $15.8 million or $0.19 per share. For the full-year 2012, FSP's profits as represented by FFO totaled approximately $79.0 million or $0.95 per share, an increase of approximately $7.8 million or $0.08 per share compared to full-year 2011. We are optimistic about our potential for continued profit growth in 2013.

"Our directly-owned real estate portfolio of 37 properties, totaling approximately 7,854,679 square feet, was approximately 94.0% leased as of December 31, 2012, up from approximately 89.9% leased at the end of the third quarter and up from approximately 88.7% leased as of December 31, 2011. The increase in the percentage of leased space for the fourth quarter and full-year 2012 continues to make a meaningful contribution to our profit growth. Our property portfolio of primarily suburban office assets has relatively modest lease expirations over the next two years which we have continued to proactively reduce during the course of 2012. As of year-end 2012, only 3.55% of our commercial square footage is scheduled to expire in 2013 and, along with our improving occupancy levels, continues to allow overall tenant improvement expenditures and leasing costs to moderate in relation to the level of rental revenues being achieved.

"There was one new real estate investment completed in the fourth quarter of 2012. On November 1, FSP completed the acquisition of a Class A suburban office property in Houston, Texas known as 'Westchase I & II' for $154.8 million. The property is a two-building office complex totaling approximately 629,025 rentable square feet and is located in Houston's Westchase District. Each building is 14 stories, and the entire property is approximately 96.3% leased to numerous tenants. FSP, its affiliates and predecessor have been investing in suburban Houston since 1993 and with the addition of this asset, we own five properties totaling approximately 1,515,682 square feet in Houston as of year-end 2012. Additional potential real estate investment opportunities are actively being explored and we would anticipate further real estate investments during 2013.

"There were two property dispositions completed in the fourth quarter of 2012. First, one of our single-asset REIT affiliates, 'FSP Phoenix Tower Corp.,' sold its 34-story 623,944 square foot office building in Houston, Texas for $123,750,000. FSP's first mortgage loan of $15 million was repaid in full and our equity investment in Phoenix Tower realized a gain of $1.6 million. The second disposition was our Southfield, Michigan property on which we had taken an estimated provision for loss last quarter. We continuously review and evaluate our directly-owned portfolio of 37 properties for potentially advantageous dispositions and would anticipate further potential opportunities in the area during 2013.

"As 2013 begins, FSP will focus on continuing to grow profits by (1) increasing occupancy and rents on its portfolio of properties while (2) acquiring additional real estate investments that have the potential to add to profits.

"We are very optimistic about our prospects for growth during 2013 and beyond." 

Dividend Announcement

On January 26, 2013, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended December 31, 2012 of $0.19 per share of common stock payable on February 14, 2013 to stockholders of record on January 25, 2013. 

Real Estate Update

Supplementary schedules provide property information for the Company's owned real estate portfolio and for three non-consolidated REITs in which the Company holds preferred stock interests as of December 31, 2012. The Company will also be filing an updated 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.

Earnings Call

A conference call is scheduled for February 20, 2013 at 10:00 a.m. (ET) to discuss the fourth quarter and 2012 results. To access the call, please dial 1-888-317-6016. Internationally, the call may be accessed by dialing 1-412-317-6016. 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. 

A reconciliation of Net Income to FFO is shown below and a definition of FFO is provided on Supplementary Schedule I. Management believes FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. The Company has included the NAREIT FFO definition in the table and notes that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. The Company's computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently. 

             
Reconciliation of Net Income to FFO:   Three Months Ended     Year Ended  
    December 31,     December 31,  
                         
(In thousands, except per share amounts)   2012     2011     2012     2011  
                                 
Net income   $ 5,460     $ 5,062     $ 7,633     $ 43,524  
(Gain) loss on sale of or equity interest in properties, less applicable income tax     526       -       14,826       (21,939 )
  GAAP (income) loss from non-consolidated REITs     (972 )     (978 )     (2,033 )     (4,490 )
  Distributions from non-consolidated REITs     76       971       2,810       5,056  
  Depreciation & amortization     15,239       13,247       55,518       48,439  
NAREIT FFO     20,329       18,302       78,754       70,590  
  Acquisition costs of new properties     186       155       287       620  
Funds From Operations (FFO)   $ 20,515     $ 18,457     $ 79,041     $ 71,210  
                                 
Per Share Data                                
EPS   $ 0.07     $ 0.06     $ 0.09     $ 0.53  
FFO   $ 0.25     $ 0.22     $ 0.95     $ 0.87  
                                 
Weighted average shares (basic and diluted)     82,937       82,937       82,937       81,857  
                                 

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. 

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 and regulatory uncertainty, uncertainty about governmental fiscal policy, 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, 2012, 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 - Prior Four Quarters F
  Percentage of Leased Space G
  Largest 20 Tenants - FSP Owned Portfolio H
  Definition of Funds From Operations (FFO) I
     
 
 
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income (Loss) Statements
(Unaudited)
           
    For the
Three Months Ended
December 31,
    For the
Year Ended
December 31,
(in thousands, except per share amounts)   2012     2011     2012     2011
                               
Revenue:                              
  Rental   $ 41,532     $ 36,744     $ 151,656     $ 134,238
Related party revenue:                              
  Management fees and interest income from loans     1,801       1,051       10,947       4,046
Other     87       29       199       49
    Total revenue     43,420       37,824       162,802       138,333
                               
Expenses:                              
  Real estate operating expenses     10,501       9,486       37,441       35,076
  Real estate taxes and insurance     5,960       5,357       22,913       20,114
  Depreciation and amortization     15,225       12,951       54,872       47,622
  Selling, general and administrative     2,462       2,012       9,916       6,913
  Interest     4,167       3,261       16,068       12,666
                               
    Total expenses     38,315       33,067       141,210       122,391
                               
Income before interest income, equity in earnings of non-consolidated REITs and taxes     5,105       4,757       21,592       15,942
Interest income     34       3       51       22
Equity in earnings of non-consolidated REITs     972       978       2,033       3,685
                               
Income before taxes on income     6,111       5,738       23,676       19,649
Taxes on income     99       82       335       267
                               
  Income from continuing operations     6,012       5,656       23,341       19,382
                                 
  Discontinued operations:                              
  Income (loss) from discontinued operations, net of income tax     (26 )     (594 )     (882 )     2,203
  Gain (loss) on sale, less applicable income tax     (526 )     -       (14,826 )     21,939
  Total discontinued operations     (552 )     (594 )     (15,708 )     24,142
                               
Net income (loss)   $ 5,460     $ 5,062     $ 7,633     $ 43,524
                               
Weighted average number of shares outstanding, basic and diluted     82,937       82,937       82,937       81,857
                               
Earnings (loss) per share, basic and diluted, attributable to:                              
  Continuing operations   $ 0.07     $ 0.07     $ 0.28     $ 0.24
  Discontinued operations     -       (0.01 )     (0.19 )     0.29
Net income per share, basic and diluted   $ 0.07     $ 0.06     $ 0.09     $ 0.53
   
   
Franklin Street Properties Corp. Financial Results  
Supplementary Schedule B  
Condensed Consolidated Balance Sheets  
(Unaudited)  
   
    December 31,  
(in thousands, except share and par value amounts)   2012     2011  
Assets:                
Real estate assets, net   $ 1,142,628     $ 991,225  
Acquired real estate leases, less accumulated amortization of $40,062 and $31,189, respectively     111,982       91,613  
Investment in non-consolidated REITs     81,960       87,598  
Assets held for sale     -       15,355  
Cash and cash equivalents     21,267       23,813  
Restricted cash     575       493  
Tenant rent receivables, less allowance for doubtful accounts of $1,300 and $1,235, respectively     1,749       1,460  
Straight-line rent receivable, less allowance for doubtful accounts of $135 and $135, respectively     35,441       28,502  
Prepaid expenses     1,106       1,223  
Related party mortgage loan receivables     93,896       140,516  
Other assets     12,655       4,070  
Office computers and furniture, net of accumulated depreciation of $584 and $428, respectively     544       468  
Deferred leasing commissions, net of accumulated amortization of $11,812 and $9,139, respectively     23,376       22,325  
      Total assets   $ 1,527,179     $ 1,408,661  
                 
Liabilities and Stockholders' Equity:                
Liabilities:                
  Bank note payable   $ 216,750     $ 449,000  
  Term loan payable     400,000       -  
  Accounts payable and accrued expenses     31,122       26,446  
  Accrued compensation     2,540       2,222  
  Tenant security deposits     2,489       2,008  
  Other liabilities: derivative liability     1,219       -  
  Acquired unfavorable real estate leases, less accumulated amortization of $4,870 and $3,759, respectively     8,310       7,618  
      Total liabilities     662,430       487,294  
                 
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 82,937,405 shares issued and outstanding, respectively     8       8  
  Additional paid-in capital     1,042,876       1,042,876  
  Accumulated other comprehensive loss     (1,219 )     -  
  Accumulated distributions in excess of accumulated earnings     (176,916 )     (121,517 )
    Total stockholders' equity     864,749       921,367  
    Total liabilities and stockholders' equity   $ 1,527,179     $ 1,408,661  
   
   
Franklin Street Properties Corp. Financial Results  
Supplementary Schedule C  
Condensed Consolidated Statements of Cash Flows  
(Unaudited)  
   
    December 31,  
(in thousands)   2012     2011  
Cash flows from operating activities:                
  Net income   $ 7,633     $ 43,524  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization expense     57,500       50,261  
    Amortization of above market lease     71       (47 )
    Gain (loss) on sale, less applicable income tax     14,826       (21,939 )
    Equity in earnings of non-consolidated REITs     (2,033 )     (3,086 )
    Distributions from non-consolidated REITs     705       3,474  
    Increase (decrease) in bad debt reserve     65       (365 )
  Changes in operating assets and liabilities:                
    Restricted cash     (82 )     (73 )
    Tenant rent receivables     (354 )     827  
    Straight-line rents     (4,464 )     (9,878 )
    Lease acquisition costs     (2,520 )     -  
    Prepaid expenses and other assets     (328 )     1,611  
    Accounts payable, accrued expenses and other items     3,717       4,213  
    Accrued compensation     318       419  
    Tenant security deposits     481       78  
  Payment of deferred leasing commissions     (5,179 )     (8,058 )
      Net cash provided by operating activities     70,356       60,961  
Cash flows from investing activities:                
  Purchase of real estate assets, office computers and furniture     (183,868 )     (174,020 )
  Acquired real estate leases     (37,302 )     (62,230 )
  Investment in non-consolidated REITs     (1 )     (10 )
  Distributions in excess of earnings from non-consolidated REITs     2,105       1,582  
  Investment in related party mortgage loan receivable     (74,580 )     (82,832 )
  Repayment of related party mortgage loan receivable     121,200       -  
  Changes in deposits on real estate assets     -       200  
  Investment in assets held for syndication     -       2,230  
  Proceeds received on sales of real estate assets     157       96,790  
      Net cash used in investing activities     (172,289 )     (218,290 )
Cash flows from financing activities:                
  Distributions to stockholders     (63,032 )     (62,177 )
  Proceeds from equity offering     -       18,001  
  Offering costs     -       (706 )
  Borrowings under bank note payable     294,750       449,000  
  Repayments of bank note payable     (527,000 )     (209,968 )
  Borrowing (repayment) of term loan payable     400,000       (74,850 )
  Deferred financing costs     (5,331 )     (5,388 )
  Swap termination payment     -       (983 )
      Net cash provided by financing activities     99,387       112,929  
Net increase (decrease) in cash and cash equivalents     (2,546 )     (44,400 )
Cash and cash equivalents, beginning of year     23,813       68,213  
Cash and cash equivalents, end of year   $ 21,267     $ 23,813  
   
   
Franklin Street Properties Corp. Earnings Release  
Supplementary Schedule D  
Real Estate Portfolio Summary Information  
(Unaudited & Approximated)  
   
Commercial portfolio lease expirations (1)  
    Total   % of  
Year   Square Feet   Portfolio  
2013   278,946   3.6 %
2014   417,721   5.3 %
2015   1,074,381   13.7 %
2016   1,099,491   14.0 %
2017   876,268   11.2 %
Thereafter (2)   4,107,872   52.2 %
    7,854,679   100.0 %

(1) Percentages are determined based upon square footage of expiring commercial leases. 
(2) Includes 472,776 square feet of current vacancies.

       
(dollars & square feet in 000's)   As of December 31, 2012  
    # of       % of     Square   % of  
State   Properties   Investment   Portfolio     Feet   Portfolio  
                           
Texas   11   $ 421,397   36.9 %   2,657   33.8 %
Colorado   4     122,335   10.7 %   788   10.0 %
Georgia   2     107,725   9.4 %   774   9.9 %
Virginia   4     99,295   8.7 %   685   8.7 %
Minnesota   2     39,899   3.5 %   628   8.0 %
Missouri   3     66,083   5.8 %   477   6.1 %
North Carolina   3     67,032   5.9 %   431   5.5 %
Illinois   2     49,869   4.3 %   372   4.7 %
Maryland   1     53,377   4.7 %   326   4.2 %
Florida   1     45,569   4.0 %   213   2.7 %
Indiana   1     34,777   3.0 %   205   2.6 %
California   2     21,444   1.9 %   182   2.3 %
Washington   1     13,826   1.2 %   117   1.5 %
    37   $ 1,142,628   100.0 %   7,855   100.0 %
 
 
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
 
Capital Expenditures        
Owned Portfolio   Year Ended
(in thousands)   31-Dec-12   31-Dec-11
             
Tenant improvements   $ 13,037   $ 19,032
Deferred leasing costs     7,427     8,058
Building improvements     3,712     2,826
    $ 24,176   $ 29,916
           
           
Square foot & leased percentages   December 31,     December 31,
    2012     2011
           
Owned portfolio of commercial real estate (a)          
  Number of properties   37     36
  Square feet   7,854,679     7,052,068
  Leased percentage   94 %   89%
           
Investments in non-consolidated REITs (b)          
  Number of properties   2     3
  Square feet   1,392,316     2,001,542
  Leased percentage   65 %   87%
           
Single Asset REITs (SARs) managed          
  Number of properties   13     13
  Square feet   3,323,566     3,322,639
  Leased percentage   87 %   80%
           
Total owned, investments & managed properties (a)          
  Number of properties   52     52
  Square feet   12,570,561     12,376,249
  Leased percentage   89 %   86%
           
(a) 2011 Includes asset sold in 2012.
(b) 2011 Includes FSP Phoenix Tower Corp., which was sold in 2012.
 

The following table shows property information for our investments in non-consolidated REITs:

                         
            Square   % Leased     % Interest  
Single Asset REIT name   City   State   Feet   31-Dec-12     Held  
FSP 303 East Wacker Drive Corp.   Chicago   IL   857,245   55.7 %   43.7 %
FSP Grand Boulevard Corp.   Kansas City   MO   535,071   80.5 %   27.0 %
            1,392,316   65.2 %      
                         
   
   
Franklin Street Properties Corp. Earnings Release  
Supplementary Schedule F: Quarterly Information  
(Unaudited)  
   
(in thousands)                              
    Q1     Q2     Q3     Q4     Annual  
Revenue:   2012     2012     2012     2012     2012  
  Rental   $ 36,303     $ 35,570     $ 38,251     $ 41,532     $ 151,656  
  Related party revenue:                                        
    Management fees and interest income from loans     2,616       3,045       3,485       1,801       10,947  
  Other     34       39       39       87       199  
      Total revenues     38,953       38,654       41,775       43,420       162,802  
Expenses:                                        
    Real estate operating expenses     8,697       8,604       9,639       10,501       37,441  
    Real estate taxes and insurance     5,696       5,493       5,764       5,960       22,913  
    Depreciation and amortization     13,071       13,004       13,572       15,225       54,872  
    Selling, general and administrative     2,077       2,236       3,141       2,462       9,916  
    Interest     3,677       4,037       4,187       4,167       16,068  
      Total expenses     33,218       33,374       36,303       38,315       141,210  
                                         
    Income before interest income, equity in earnings of non-consolidated REITs and taxes on income     5,735       5,280       5,472       5,105       21,592  
    Interest income     8       4       5       34       51  
    Equity in earnings of non-consolidated REITs     391       494       176       972       2,033  
                                             
    Income before taxes on income     6,134       5,778       5,653       6,111       23,676  
    Taxes on income     79       77       80       99       335  
                                             
    Income from continuing operations     6,055       5,701       5,573       6,012       23,341  
    Discontinued operations:                                        
    Income from discontinued operations, net of tax     (317 )     (268 )     (271 )     (26 )     (882 )
    Gain (loss) on sale, less applicable income tax     -       -       (14,300 )     (526 )     (14,826 )
    Total discontinued operations     (317 )     (268 )     (14,571 )     (552 )     (15,708 )
                                             
    Net income   $ 5,738     $ 5,433     $ (8,998 )   $ 5,460     $ 7,633  
                                         
                                         
FFO calculations:                                        
                                         
Net income   $ 5,738     $ 5,433     $ (8,998 )   $ 5,460     $ 7,633  
Gain (loss) on sale, less applicable income tax     -       -       14,300       526       14,826  
    GAAP income from non-consolidated REITs     (391 )     (494 )     (176 )     (972 )     (2,033 )
    Distributions from non-consolidated REITs     929       898       907       76       2,810  
    Acquisition costs     -       -       101       186       287  
    Depreciation of real estate & intangible amortization     13,295       13,205       13,779       15,239       55,518  
                                         
Funds From Operations (FFO)   $ 19,571     $ 19,042     $ 19,913     $ 20,515     $ 79,041  
   
   
Franklin Street Properties Corp. Earnings Release  
Supplementary Schedule G  
Percentage of Leased Space  
(Unaudited & Estimated)  
   
   


Property Name
 


Location
 

Square
Feet
 
%
Leased
(1)

as of
30-Sep-12
  Third
Quarter
Average %
Leased (2)
 
%
Leased
(1)

as of
31-Dec-12
  Fourth
Quarter
Average %
Leased (2)
 
                               
1   PARK SENECA   Charlotte, NC   109,406   77.3 % 78.2 % 79.3 % 79.4 %
2   HILLVIEW CENTER   Milpitas, CA   36,288   100.0 % 100.0 % 100.0 % 100.0 %
3   FOREST PARK   Charlotte, NC   62,212   100.0 % 100.0 % 100.0 % 100.0 %
4   CENTENNIAL   Colorado Springs, CO   110,405   85.4 % 85.4 % 85.4 % 85.4 %
5   MEADOW POINT   Chantilly, VA   138,537   100.0 % 100.0 % 100.0 % 100.0 %
6   TIMBERLAKE   Chesterfield, MO   232,766   97.0 % 97.0 % 97.0 % 97.0 %
7   FEDERAL WAY   Federal Way, WA   117,010   47.0 % 47.0 % 47.0 % 47.0 %
8   NORTHWEST POINT   Elk Grove Village, IL   176,848   100.0 % 100.0 % 100.0 % 100.0 %
9   TIMBERLAKE EAST   Chesterfield, MO   116,197   97.0 % 97.0 % 97.0 % 97.0 %
10   PARK TEN   Houston, TX   155,715   96.1 % 96.1 % 96.1 % 96.1 %
11   MONTAGUE   San Jose, CA   145,951   100.0 % 100.0 % 100.0 % 100.0 %
12   ADDISON   Addison, TX   293,787   98.4 % 96.7 % 98.4 % 98.4 %
13   COLLINS CROSSING   Richardson, TX   298,766   90.0 % 88.5 % 90.0 % 90.0 %
14   GREENWOOD PLAZA   Englewood, CO   196,236   48.9 % 48.9 % 100.0 % 83.0 %
15   RIVER CROSSING   Indianapolis, IN   205,059   97.0 % 96.7 % 92.2 % 94.1 %
16   LIBERTY PLAZA   Addison, TX   218,934   85.2 % 85.2 % 81.7 % 82.9 %
17   INNSBROOK   Glen Allen, VA   298,456   98.3 % 98.3 % 98.3 % 98.3 %
18   380 INTERLOCKEN   Broomfield, CO   240,184   89.5 % 89.5 % 89.5 % 89.5 %
19   BLUE LAGOON   Miami, FL   212,619   100.0 % 100.0 % 100.0 % 100.0 %
20   ELDRIDGE GREEN   Houston, TX   248,399   100.0 % 100.0 % 100.0 % 100.0 %
21   WILLOW BEND   Plano, TX   117,050   77.8 % 77.8 % 77.8 % 77.8 %
22   ONE OVERTON PARK   Atlanta, GA   387,267   94.6 % 94.6 % 94.6 % 94.6 %
23   390 INTERLOCKEN   Broomfield, CO   241,516   97.2 % 97.2 % 97.2 % 97.2 %
24   EAST BALTIMORE   Baltimore, MD   325,445   57.2 % 57.5 % 77.3 % 77.3 %
25   PARK TEN PHASE II   Houston, TX   156,746   100.0 % 100.0 % 100.0 % 100.0 %
26   LAKESIDE CROSSING I   Maryland Heights, MO   127,778   100.0 % 100.0 % 100.0 % 100.0 %
27   LOUDOUN TECH   Dulles, VA   135,888   100.0 % 100.0 % 100.0 % 100.0 %
28   4807 STONECROFT   Chantilly, VA   111,469   100.0 % 100.0 % 100.0 % 100.0 %
29   EDEN BLUFF   Eden Prairie, MN   153,028   100.0 % 100.0 % 100.0 % 100.0 %
30   121 SOUTH EIGHTH ST   Minneapolis, MN   475,303   91.1 % 92.6 % 90.6 % 90.8 %
31   EMPEROR BOULEVARD   Durham, NC   259,531   100.0 % 100.0 % 100.0 % 100.0 %
32   LEGACY TENNYSON CTR   Plano, TX   202,600   100.0 % 100.0 % 100.0 % 100.0 %
33   ONE LEGACY   Plano, TX   214,110   100.0 % 100.0 % 100.0 % 100.0 %
34   909 DAVIS   Evanston, IL   195,245   97.9 % 96.9 % 97.9 % 97.9 %
35   1410 EAST RENNER   Richardson, TX   122,300   100.0 % 100.0 % 100.0 % 100.0 %
36   ONE RAVINIA DRIVE   Atlanta, GA   386,603   84.5 % 84.0 % 91.0 % 86.6 %
37   WESTCHASE I & II   Houston, TX   629,025   n/a   n/a   96.3 % 96.3 %
                               
    TOTAL WEIGHTED AVERAGE (3)   7,854,679   89.9 % 89.8 % 94.0 % 92.4 %

(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.
(3) Third & Fourth Quarter Total Weighted Averages include asset sold in December 2012 located in Southfield, Michigan with 214,697 sf

   
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, 2012              
    Tenant   Sq Ft   SIC Code   % of Portfolio  
1   TCF National Bank   268,252   60   3.4 %
2   Quintiles Transnational Corp   259,531   87   3.3 %
3   CITGO Petroleum Corporation   248,399   29   3.2 %
4   Burger King Corporation   212,619   58   2.7 %
5   Denbury Onshore LLC   202,600   13   2.6 %
6   RGA Reinsurance Company   197,354   63   2.5 %
7   SunTrust Bank   182,888   60   2.3 %
8   Citicorp Credit Services, Inc   176,848   61   2.3 %
9   C.H. Robinson Worldwide, Inc   153,028   47   1.9 %
10   T-Mobile South, LLC dba T-Mobile   151,792   48   1.9 %
11   Houghton Mifflin Harcourt Publishing Company   150,050   27   1.9 %
12   Petrobras America, Inc.   144,813   13   1.8 %
13   Murphy Exploration & Production Company   144,677   13   1.8 %
14   Giesecke & Devrient America, Inc.   135,888   73   1.7 %
15   Monsanto Company   127,778   28   1.6 %
16   Federal National Mortgage Association   123,144   61   1.6 %
17   AT&T Services, Inc.   122,300   48   1.6 %
18   Vail Holdings, Inc.   122,232   79   1.6 %
19   Kaiser Foundation Health Plan, Inc.   120,979   64   1.5 %
20   Northrop Grumman Systems Corporation   111,469   73   1.5 %
    Total   3,356,641       42.7 %

(a) Based on rentable square footage

 
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule I
Definition of Funds From Operations ("FFO"),
 

The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as 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 (computed 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 have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do. 

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. 

Contact:

John Demeritt
(877) 686-9496
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