Exhibit 99.1
| PRESS RELEASE | Franklin Street Properties Corp. |
401 Edgewater Place · Suite 200 · Wakefield, Massachusetts 01880-6210 · (781) 557-1300 · www.franklinstreetproperties.com |
Contact: John Demeritt 877-686-9496 | FOR IMMEDIATE RELEASE |
FRANKLIN STREET PROPERTIES CORP. ANNOUNCES
THIRD QUARTER 2009 RESULTS
Wakefield, MA—November 3, 2009—Franklin Street Properties Corp. (the “Company” or “FSP”) (NYSE Amex: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $17.5 million or $0.25 per share for the third quarter ended September 30, 2009, which was sequentially flat compared to the second quarter of 2009. The Company also announced Net Income of $6.9 million and Earnings Per Share (EPS) of $0.10 for the third quarter ended September 30, 2009.
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 on page 4 of this press release.
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
(in 000's except per share data) | | 2009 | | | 2008 | | | | Increase
(Decrease) | | | 2009 | | | 2008 | | | | Increase
(Decrease) | |
| | | | | | | | | | | | | | | | | | | | | |
| Net Income | | $ | 6,941 | | | $ | 7,419 | | | | $ | (478 | ) | | $ | 19,614 | | | $ | 25,340 | | | | $ | (5,726 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FFO | | $ | 17,537 | | | $ | 17,085 | | | | $ | 452 | | | $ | 52,284 | | | $ | 53,005 | | | | $ | (721 | ) |
| GOS | | | - | | | | - | | | | | - | | | | - | | | | - | | | | | - | |
| FFO+GOS | | $ | 17,537 | | | $ | 17,085 | | | | $ | 452 | | | $ | 52,284 | | | $ | 53,005 | | | | $ | (721 | ) |
| Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EPS | | $ | 0.10 | | | $ | 0.11 | | | | $ | (0.01 | ) | | $ | 0.28 | | | $ | 0.36 | | | | $ | (0.08 | ) |
| FFO | | $ | 0.25 | | | $ | 0.24 | | | | $ | 0.01 | | | $ | 0.74 | | | $ | 0.75 | | | | $ | (0.01 | ) |
| GOS | | $ | - | | | $ | - | | | | $ | - | | | $ | - | | | $ | - | | | | $ | - | |
| FFO+GOS | | $ | 0.25 | | | $ | 0.24 | | | | $ | 0.01 | | | $ | 0.74 | | | $ | 0.75 | | | | $ | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted average | | | | | | | | | | | | | | | | | | | | | | | | | | |
| shares (diluted) | | | 71,281 | | | | 70,481 | | | | | 800 | | | | 70,750 | | | | 70,481 | | | | | 269 | |
Comparing results for the third quarter of 2009 to 2008, Net Income and EPS decreased $0.5 million or $0.01 per share; and FFO and FFO+GOS each increased $0.5 million or $0.01 per share. The increase in FFO was primarily from an increase in real estate FFO of $0.8 million and a decrease in investment banking FFO of $0.4 million. The decrease from investment banking was caused by lower sales of securities by our investment bank, which were $4.8 million in the third quarter of 2008 as compared to no sales of securities by our investment bank for the third quarter of 2009. Revenue from our investment bank is primarily based on the value of securities sales. The increase in real estate FFO was primarily from contributions from two acquisitions made in December 2008 and two in June 2009. There was no GOS in either the third quarter of 2009 or 2008.
Comparing results for the first nine months of 2009 to 2008, Net Income and EPS decreased $5.7 million or $0.08 per share; and FFO and FFO+GOS each decreased $0.7 million or $0.01 per share. The decrease in FFO was primarily from a decrease in investment banking FFO of $4.4 million and was partially offset by an increase in real estate FFO of $3.7 million. The decrease from investment banking was caused by lower sales of securities by our investment bank, which decreased $56.8 million to $550,000 for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008. Revenue from our investment bank is primarily based on the value of securities sales. The increase in real estate FFO was primarily from contributions from two acquisitions made in December 2008 and two in June 2009. There was no GOS in either the first nine months of 2009 or 2008.
George J. Carter, President and CEO, commented as follows:
“For the third quarter of 2009, FSP’s profits as represented by FFO + GOS totaled approximately $17.5 million or $0.25 per share, sequentially flat compared to the second quarter of 2009. Dividend distributions declared for the third quarter of 2009, which are payable on November 20, 2009, will be approximately $15.1 million or $0.19 per share.
Significant portions of our real estate investment business, specifically property sales and investment banking, are transactional. Similar to both the first and second quarters of 2009, neither of these business segments made a positive contribution to third quarter results. Substantially all profits for the quarter were produced by our ongoing/recurring real estate operations.
Although FSP has certain properties in its portfolio that we would contemplate selling, it is unlikely that near-term market conditions will favor further dispositions. Improvement in both liquidity and pricing is needed to help revitalize the property sales environment, and likely will be linked to a meaningful resumption of an active and stable mortgage-lending market for commercial real estate. However, when we believe that the right part of the real estate cycle has returned, you can expect to see FSP again complete property dispositions, thereby closing the loop on our total return strategy.
During the third quarter of 2009, our investment banking group completed no investor capital closings and consequently operated at a loss for the quarter which totaled approximately $0.6 million, or about $.01 per share. Significantly, during the last two weeks of the third quarter, our investment banking group began its first new private placement real estate offering of 2009. Opportunistic property acquisition prospects for this business segment are now beginning to become more visible. In addition, a growing interest from our established investor clients to move some portion of their capital from the sidelines to specific property investment situations is occurring. Early analysis of this new private placement real estate offering would suggest a moderate recommencement of this transactional business segment. The potential for meaningful profit contribution in 2010 and beyond from our investment banking group looks promising but remains subject to broader capital market economic activity.
While profits continued to suffer in the third quarter of 2009 from our transactional businesses, our real estate portfolio of 32 properties maintained an overall 90% occupancy and provided steady rental income. FFO for the third quarter of 2009 was $0.25 per share, all of which came from ongoing real estate operations net of the cost of maintaining our investment banking capability.
On September 30, 2009, FSP purchased an office property located in Falls Church, Virginia for a price of $73,000,000. The property was our third direct portfolio acquisition this year. In total the three properties acquired to date in 2009 have added approximately 517,109 square feet for a total investment of approximately $124,600,000. Property acquisition efforts are active, and we would expect to acquire additional property in 2009.
It is FSP’s objective to grow our property portfolio and rental income business during this period of liquidity-constrained capital markets. In addition to using our balance sheet strength to help finance and fund new acquisitions, raising equity by issuing additional shares of our common stock for sale to the broader public markets will also be considered as a part of our capital funding/property acquisition/growth strategy. The timing and execution of such capital events will be subject to, among other things, the size and amount of our specific property acquisition opportunities and the acceptance of our shares by the public capital markets. An initial execution of this component of our growth funding plan was completed on September 23, 2009 with our first-ever underwritten public offering of 9.2 million shares of our common stock at a price to the public of $13 per share. The offering resulted in net proceeds to the Company of approximately $114.7 million net of underwriter’s discounts and offering costs. A portion of those proceeds was used to complete the Falls Church, Virginia, property acquisition on September 30. We continue to be very optimistic about FSP’s position in the current commercial real estate investment market and the opportunities that are presenting themselves to acquire commercial properties at better pricing and value metrics than we have seen in the last several years.”
Dividend Announcement
On October 16, 2009, the Board of Directors of the Company declared a cash distribution of $0.19 per share of common stock payable on November 20, 2009 to stockholders of record on October 30, 2009.
Real Estate Update
On September 30, 2009 we acquired an office property in Falls Church, Virginia for approximately $73 million. Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 32 properties and for three non-consolidated REITs that we have interests in as of September 30, 2009. 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 H. We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance and is generally calculated in a similar manner to our calculation. We also believe that FFO+GOS is an important measure as it considers investment performance.
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| (In thousands, except per share amounts) | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | | | | | | | | | |
| Net income | | $ | 6,941 | | | $ | 7,419 | | | $ | 19,614 | | | $ | 25,340 | |
| (Gain) Loss on sale of properties | | | - | | | | - | | | | - | | | | - | |
| GAAP (income) loss from non-consolidated REITs | | | (475 | ) | | | (679 | ) | | | (1,710 | ) | | | (2,167 | ) |
| Distributions from non-consolidated REITs | | | 1,119 | | | | 1,561 | | | | 4,257 | | | | 3,838 | |
| Acquisition costs of new properties | | | 391 | | | | - | | | | 639 | | | | - | |
| Depreciation of real estate & intangible amortization | | | 9,561 | | | | 8,784 | | | | 29,484 | | | | 25,994 | |
| Funds From Operations (FFO) | | | 17,537 | | | | 17,085 | | | | 52,284 | | | | 53,005 | |
| Plus gains on sales of properties | | | - | | | | - | | | | - | | | | - | |
| FFO+GOS | | $ | 17,537 | | | $ | 17,085 | | | $ | 52,284 | | | $ | 53,005 | |
| | | | | | | | | | | | | | | | | |
| Per Share Data | | | | | | | | | | | | | | | | |
| EPS | | $ | 0.10 | | | $ | 0.11 | | | $ | 0.28 | | | $ | 0.36 | |
| FFO | | $ | 0.25 | | | $ | 0.24 | | | $ | 0.74 | | | $ | 0.75 | |
| GOS | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| FFO+GOS | | $ | 0.25 | | | $ | 0.24 | | | $ | 0.74 | | | $ | 0.75 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares (basic and diluted) | | | 71,281 | | | | 70,481 | | | | 70,750 | | | | 70,481 | |
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 November 4, 2009 at 10:00 a.m. (ET) to discuss the third quarter 2009 results. The toll free number is 1-866-700-7101, passcode 33138194. Internationally, the call may be accessed by dialing 1-617-213-8837, passcode 33138194. 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. FSP operates in two business segments: real estate operations and investment banking/investment services. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. FSP's subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and a registered broker/dealer. 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, changes in the demand by investors for investment in Sponsored REITs (as defined in our Annual Report on Form 10-K for the year ended December 31, 2008), risks of a lessening of demand for the types of real estate owned by us, changes in government regulations, 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, 2008, 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 |
| Largest 20 Tenants – FSP Owned Portfolio | G |
| Definition of Funds From Operations (FFO) and FFO+GOS | H |
Franklin Street Properties Corp. Financial Results
Condensed Consolidated Income Statements
| | | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | |
| (in thousands, except per share amounts) | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | | | | | | | | | |
| Revenue: | | | | | | | | | | | | |
| Rental | | $ | 31,702 | | | $ | 27,927 | | | $ | 90,774 | | | $ | 82,283 | |
| Related party revenue: | | | | | | | | | | | | | | | | |
| Syndication fees | | | - | | | | 304 | | | | 39 | | | | 3,766 | |
| Transaction fees | | | 1 | | | | 300 | | | | 543 | | | | 3,606 | |
| Management fees and interest income from loans | | | 370 | | | | 380 | | | | 1,232 | | | | 1,364 | |
| Other | | | 19 | | | | 13 | | | | 55 | | | | 52 | |
| Total revenue | | | 32,092 | | | | 28,924 | | | | 92,643 | | | | 91,071 | |
| | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | |
| Real estate operating expenses | | | 7,752 | | | | 7,159 | | | | 22,176 | | | | 20,973 | |
| Real estate taxes and insurance | | | 5,364 | | | | 4,590 | | | | 14,879 | | | | 13,375 | |
| Depreciation and amortization | | | 8,801 | | | | 7,666 | | | | 26,940 | | | | 22,616 | |
| Selling, general and administrative | | | 2,243 | | | | 1,927 | | | | 6,378 | | | | 6,557 | |
| Commissions | | | 8 | | | | 208 | | | | 178 | | | | 2,020 | |
| Interest | | | 1,744 | | | | 1,108 | | | | 4,920 | | | | 3,351 | |
| | | | | | | | | | | | | | | | | |
| Total expenses | | | 25,912 | | | | 22,658 | | | | 75,471 | | | | 68,892 | |
| | | | | | | | | | | | | | | | | |
| Income before interest income, equity in earnings of | | | | | | | | | | | | | | | | |
| non-consolidated REITs and taxes | | | 6,180 | | | | 6,266 | | | | 17,172 | | | | 22,179 | |
| Interest income | | | 16 | | | | 177 | | | | 88 | | | | 657 | |
| Equity in earnings of non-consolidated REITs | | | 475 | | | | 679 | | | | 1,710 | | | | 2,167 | |
| | | | | | | | | | | | | | | | | |
| Income before taxes | | | 6,671 | | | | 7,122 | | | | 18,970 | | | | 25,003 | |
| Income tax benefit | | | (270 | ) | | | (297 | ) | | | (644 | ) | | | (337 | ) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 6,941 | | | $ | 7,419 | | | $ | 19,614 | | | $ | 25,340 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of shares outstanding, | | | | | | | | | | | | | | | | |
| basic and diluted | | | 71,281 | | | | 70,481 | | | | 70,750 | | | | 70,481 | |
| | | | | | | | | | | | | | | | | |
| Net income per share, basic and diluted | | $ | 0.10 | | | $ | 0.11 | | | $ | 0.28 | | | $ | 0.36 | |
| | | | | | | | | | | | | | | | | |
Franklin Street Properties Corp. Financial Results
Condensed Consolidated Balance Sheets
| | | | | | | |
| (in thousands, except share and par value amounts) | | September 30, | | | December 31, | |
| | | 2009 | | | 2008 | |
| Assets: | | | | | | |
| Real estate assets, net | | $ | 926,555 | | | $ | 844,058 | |
| Acquired real estate leases, less accumulated amortization | | | | | | | | |
| of $35,106 and $29,200, respectively | | | 48,003 | | | | 28,518 | |
| Investment in non-consolidated REITs | | | 93,936 | | | | 83,046 | |
| Assets held for syndication, net | | | - | | | | 13,254 | |
| Cash and cash equivalents | | | 26,385 | | | | 29,244 | |
| Restricted cash | | | 331 | | | | 336 | |
| Tenant rent receivables, less allowance for doubtful accounts | | | | | | | | |
| of $620 and $509, respectively | | | 1,400 | | | | 1,329 | |
| Straight-line rent receivable, less allowance for doubtful accounts | | | | | | | | |
| of $100 and $261, respectively | | | 9,724 | | | | 8,816 | |
| Prepaid expenses | | | 3,430 | | | | 2,206 | |
| Related party mortgage loan receivable | | | 23,264 | | | | 1,125 | |
| Other assets | | | 1,452 | | | | 2,406 | |
| Office computers and furniture, net of accumulated depreciation | | | | | | | | |
| of $1,194 and $1,108, respectively | | | 408 | | | | 281 | |
| Deferred leasing commissions, net of accumulated amortization | | | | | | | | |
| of $4,820, and $3,416, respectively | | | 10,887 | | | | 10,814 | |
| Total assets | | $ | 1,145,775 | | | $ | 1,025,433 | |
| | | | | | | | | |
| Liabilities and Stockholders’ Equity: | | | | | | | | |
| Liabilities: | | | | | | | | |
| Bank note payable | | $ | 91,008 | | | $ | 67,468 | |
| Term loan payable | | | 75,000 | | | | 75,000 | |
| Accounts payable and accrued expenses | | | 25,351 | | | | 22,297 | |
| Accrued compensation | | | 750 | | | | 1,654 | |
| Tenant security deposits | | | 1,757 | | | | 1,874 | |
| Other liabilities: derivative termination value | | | 2,269 | | | | 3,099 | |
| Acquired unfavorable real estate leases, less accumulated amortization | | | | | | | | |
| of $2,440, and $1,779, respectively | | | 5,661 | | | | 5,044 | |
| Total liabilities | | | 201,796 | | | | 176,436 | |
| | | | | | | | | |
| 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, 79,680,705 and 70,480,705 shares issued and outstanding, respectively | | | 8 | | | | 7 | |
| Additional paid-in capital | | | 1,003,729 | | | | 889,019 | |
| Accumulated other comprehensive loss | | | (2,269 | ) | | | (3,099 | ) |
| Accumulated distributions in excess of accumulated earnings | | | (57,489 | ) | | | (36,930 | ) |
| Total stockholders’ equity | | | 943,979 | | | | 848,997 | |
| Total liabilities and stockholders’ equity | | $ | 1,145,775 | | | $ | 1,025,433 | |
Franklin Street Properties Corp. Financial Results
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | | For the Nine Months Ended September 30, | |
| (in thousands) | | 2009 | | | 2008 | |
| Cash flows from operating activities: | | | | | | |
| Net income | | $ | 19,614 | | | $ | 25,340 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |
| Depreciation and amortization expense | | | 27,141 | | | | 22,649 | |
| Amortization of above market lease | | | 2,544 | | | | 3,376 | |
| Equity in earnings of non-consolidated REITs | | | (1,710 | ) | | | (2,167 | ) |
| Distributions from non-consolidated REITs | | | 4,257 | | | | 3,838 | |
| Increase in bad debt reserve | | | 111 | | | | 79 | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Restricted cash | | | 5 | | | | - | |
| Tenant rent receivables, net | | | (182 | ) | | | 219 | |
| Straight-line rents, net | | | (849 | ) | | | (854 | ) |
| Prepaid expenses and other assets, net | | | (472 | ) | | | (1,474 | ) |
| Accounts payable, accrued expenses | | | 4,294 | | | | 3,863 | |
| Accrued compensation | | | (904 | ) | | | 88 | |
| Tenant security deposits | | | (117 | ) | | | (51 | ) |
| Payment of deferred leasing commissions | | | (2,202 | ) | | | (2,434 | ) |
| Net cash provided by operating activities | | | 51,530 | | | | 52,472 | |
| Cash flows from investing activities: | | | | | | | | |
Purchase of real estate assets, office computers and furniture,
capitalized merger costs and acquired real estate leases | | | (130,819 | ) | | | (39,282 | ) |
| Investment in non-consolidated REITs | | | (13,200 | ) | | | (10 | ) |
| Investment in related party mortgage loan receivable | | | (22,139 | ) | | | (1,125 | ) |
| Investment in assets held for syndication | | | 13,017 | | | | 12,235 | |
| Net cash used in investing activities | | | (153,141 | ) | | | (28,182 | ) |
| Cash flows from financing activities: | | | | | | | | |
| Distributions to stockholders | | | (40,173 | ) | | | (57,089 | ) |
| Equity offering | | | 115,385 | | | | - | |
| Borrowings under bank note payable | | | 23,540 | | | | 20,368 | |
| Deferred financing costs | | | - | | | | (30 | ) |
| Net cash provided by (used in) financing activities | | | 98,752 | | | | (36,751 | ) |
| Net decrease in cash and cash equivalents | | | (2,859 | ) | | | (12,461 | ) |
| Cash and cash equivalents, beginning of period | | | 29,244 | | | | 46,988 | |
| Cash and cash equivalents, end of period | | $ | 26,385 | | | $ | 34,527 | |
| | | | | | | | | |
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 |
| 2009 | | 488,456 | 8.2% |
| 2010 | | 761,351 | 12.8% |
| 2011 | | 384,237 | 6.5% |
| 2012 | | 647,178 | 10.9% |
| 2013 | | 349,015 | 5.9% |
| 2014 | | 584,389 | 9.8% |
| Thereafter (2) | | 2,719,998 | 45.9% |
| | | 5,934,624 | 100.0% |
| | (1) | Percentages are determined based upon square footage of expiring commercial leases. |
| | (2) | Includes 468,000 square feet of current vacancies. |
| (In Thousands) | As of September 30, 2009 |
| | # of | | % of | | Square | % of |
| State | Properties | Investment | Portfolio | | Feet | Portfolio |
| | | | | | | |
| Texas | 7 | $ 229,853 | 24.8% | | 1,489 | 25.1% |
| Virginia | 5 | 161,198 | 17.4% | | 933 | 15.7% |
| Colorado | 4 | 128,819 | 13.9% | | 792 | 13.3% |
| Georgia | 1 | 76,152 | 8.2% | | 387 | 6.5% |
| Missouri | 3 | 73,009 | 7.9% | | 477 | 8.0% |
| Maryland | 2 | 61,888 | 6.7% | | 424 | 7.1% |
| Florida | 1 | 48,389 | 5.2% | | 213 | 3.6% |
| Indiana | 1 | 36,725 | 4.0% | | 205 | 3.5% |
| Illinois | 1 | 30,424 | 3.3% | | 177 | 3.0% |
| California | 2 | 21,520 | 2.3% | | 182 | 3.1% |
| Michigan | 1 | 14,884 | 1.6% | | 215 | 3.6% |
| Washington | 1 | 14,864 | 1.6% | | 117 | 2.0% |
| Minnesota | 1 | 14,657 | 1.6% | | 153 | 2.6% |
| North Carolina | 2 | 14,172 | 1.5% | | 172 | 2.9% |
| | 32 | $ 926,555 | 100.0% | | 5,935 | 100.0% |
| Property by type: | | | | | | |
| (dollars & square feet | As of September 30, 2009 |
| in 000's) | # of | | % of | | Square | % of |
| Type | Properties | Investment | Portfolio | | Feet | Portfolio |
| Office | 31 | $ 921,499 | 99.5% | | 5,836 | 98.3% |
| Industrial | 1 | 5,056 | 0.5% | | 99 | 1.7% |
| | 32 | $ 926,555 | 100.0% | | 5,935 | 100.0% |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
| Capital Expenditures | | | | | | |
| Owned Portfolio | | Nine Months Ended | |
| (in thousands) | | 30-Sep-09 | | | 30-Sep-08 | |
| | | | | | | |
| Tenant improvements | | $ | 3,217 | | | $ | 4,564 | |
| Deferred leasing costs | | | 2,202 | | | | 2,434 | |
| Building improvements | | | 846 | | | | 1,310 | |
| | | $ | 6,265 | | | $ | 8,308 | |
| Square foot & leased percentages | September 30, | December 31, |
| | | 2009 | | 2008 |
| | | | | |
| Owned portfolio of commercial real estate | | | |
| | Number of properties | 32 | | 29 |
| | Square feet | 5,934,624 | | 5,417,515 |
| | Leased percentage | 90% | | 93% |
| | | | | |
| Investments in non-consolidated commercial real estate | | | |
| | Number of properties | 3 | | 2 |
| | Square feet | 1,995,041 | | 1,461,224 |
| | Leased percentage | 78% | | 80% |
| | | | | |
| Single Asset REITs (SARs) managed | | | |
| | Number of properties | 9 | | 10 |
| | Square feet* | 2,155,201 | | 2,684,561 |
| | Leased percentage* | 90% | | 92% |
| | | | | |
| Total owned, investments & managed properties | | | |
| | Number of properties* | 44 | | 41 |
| | Square feet* | 10,084,866 | | 9,563,300 |
| | Leased percentage* | 88% | | 93% |
| | | | | |
| *Excludes a property to be constructed with approximately 285,000 square feet. |
The following table shows property information for our investments in non-consolidated REITs:
| | | | Square | % Leased |
| Single Asset REIT name | City | State | Feet | 30-Sep-09 |
| FSP 303 East Wacker Drive Corp. | Chicago | IL | 844,081 | 75.28% |
| FSP Grand Boulevard Corp. | Kansas City | MO | 532,453 | 88.64% |
| FSP Phoenix Tower Corp. | Houston | TX | 618,507 | 73.95% |
| | | | 1,995,041 | 78.43% |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F: Prior 4 Quarter Information
(Unaudited)
| (in 000's) | | | | | | | | | | | | |
| | | | Q2 | | | | Q1 | | | | Q4 | | | | Q3 | |
| Revenue: | | | 2009 | | | | 2009 | | | | 2008 | | | | 2008 | |
| Rental | | $ | 29,254 | | | $ | 29,818 | | | $ | 28,915 | | | $ | 27,927 | |
| Related party revenue: | | | | | | | | | | | | | | | | |
| Syndication fees | | | 29 | | | | 10 | | | | - | | | | 304 | |
| Transaction fees | | | 514 | | | | 28 | | | | 35 | | | | 300 | |
| Management fees and | | | | | | | | | | | | | | | | |
| interest income from loans | | | 317 | | | | 545 | | | | 375 | | | | 380 | |
| Other | | | 18 | | | | 18 | | | | 20 | | | | 13 | |
| Total revenue | | | 30,132 | | | | 30,419 | | | | 29,345 | | | | 28,924 | |
| | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | |
| Real estate operating expenses | | | 7,144 | | | | 7,280 | | | | 8,026 | | | | 7,159 | |
| Real estate taxes and insurance | | | 4,686 | | | | 4,829 | | | | 4,366 | | | | 4,590 | |
| Depreciation and amortization | | | 10,225 | | | | 7,914 | | | | 7,744 | | | | 7,666 | |
| Selling, general and administrative | | | 2,127 | | | | 2,008 | | | | 1,711 | | | | 1,927 | |
| Commissions | | | 40 | | | | 130 | | | | 131 | | | | 208 | |
| Interest | | | 1,599 | | | | 1,577 | | | | 1,570 | | | | 1,108 | |
| Total expenses | | | 25,821 | | | | 23,738 | | | | 23,548 | | | | 22,658 | |
| | | | | | | | | | | | | | | | | |
| Income before interest income, equity | | | | | | | | | | | | | | | | |
| in earnings in non-consolidated REITs | | | 4,311 | | | | 6,681 | | | | 5,797 | | | | 6,266 | |
| Interest income | | | 36 | | | | 36 | | | | 89 | | | | 177 | |
| Equity in earnings in non-consolidated REITs | | | 443 | | | | 792 | | | | 580 | | | | 679 | |
| | | | | | | | | | | | | | | | | |
| Income before taxes on income | | | 4,790 | | | | 7,509 | | | | 6,466 | | | | 7,123 | |
| Taxes on income | | | (75 | ) | | | (299 | ) | | | (153 | ) | | | (297 | ) |
| | | | | | | | | | | | | | | | | |
| Income from continuing operations | | | 4,865 | | | | 7,808 | | | | 6,619 | | | | 7,419 | |
| Income from discontinued operations | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | |
| Income before gain on sale of properties | | | 4,865 | | | | 7,808 | | | | 6,619 | | | | 7,419 | |
| Gain on sale of assets | | | - | | | | - | | | | - | | | | - | |
| Net income | | $ | 4,865 | | | $ | 7,808 | | | $ | 6,619 | | | $ | 7,419 | |
| | | | | | | | | | | | | | | | | |
| FFO and FFO+GOS calculations: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 4,865 | | | $ | 7,808 | | | $ | 6,619 | | | $ | 7,419 | |
| (Gain) Loss on sale of assets | | | - | | | | - | | | | - | | | | - | |
| GAAP income from non-consolidated REITs | | | (443 | ) | | | (792 | ) | | | (580 | ) | | | (679 | ) |
| Distributions from non-consolidated REITs | | | 1,523 | | | | 1,615 | | | | 1,510 | | | | 1,561 | |
| Acquisition costs | | | 248 | | | | - | | | | - | | | | - | |
| Depreciation & amortization | | | 11,216 | | | | 8,707 | | | | 8,650 | | | | 8,784 | |
| Funds From Operations (FFO) | | | 17,409 | | | | 17,338 | | | | 16,199 | | | | 17,085 | |
| Plus gains on sales of assets | | | - | | | | - | | | | - | | | | - | |
| FFO+GOS | | $ | 17,409 | | | $ | 17,338 | | | $ | 16,199 | | | $ | 17,085 | |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Largest 20 Tenants – FSP Owned Portfolio
As of September 30, 2009
(Unaudited & Estimated)
The following table includes the largest 20 tenants in FSP’s owned portfolio based on square feet leased.
| | | | | | % of |
| | Tenant | | Sq Ft | SIC Code | Portfolio |
| 1 | Capital One Services, Inc. (1) | | 297,789 | 61 | 5.0% |
| 2 | Noblis, Inc. | | 252,613 | 54 | 4.2% |
| 3 | Citgo Petroleum Corporation | | 248,399 | 29 | 4.2% |
| 4 | Tektronix Texas, LLC | | 241,372 | 73 | 4.0% |
| 5 | Burger King Corporation | | 212,619 | 58 | 3.6% |
| 6 | New Era of Networks, Inc. (Sybase) | | 199,077 | 73 | 3.4% |
| 7 | RGA Reinsurance Company | | 185,501 | 63 | 3.1% |
| 8 | Citigroup Credit Services, Inc (2) | | 176,848 | 61 | 3.0% |
| 9 | CH Robinson Worldwide, Inc. | | 153,028 | 47 | 2.6% |
| 10 | Geisecke & Devrient | | 135,888 | 73 | 2.3% |
| 11 | Murphy Exploration & Production Company | | 133,786 | 13 | 2.2% |
| 12 | CACI Technologies, Inc. | | 132,896 | 73 | 2.2% |
| 13 | Monsanto Company | | 127,778 | 28 | 2.2% |
| 14 | Northrop Grumman Information Technology, Inc. | | 111,469 | 73 | 1.9% |
| 15 | Maines Paper & Food Service, Inc. | | 98,745 | 51 | 1.7% |
| 16 | Amdocs, Inc. | | 91,928 | 73 | 1.6% |
| 17 | County of Santa Clara | | 90,467 | 81 | 1.5% |
| 18 | Ober Kaler Grimes & Shriver | | 88,736 | 91 | 1.5% |
| 19 | Technip-Coflexip USA Holdings, Inc | | 86,059 | 13 | 1.4% |
| 20 | Vail Holding Corp d/b/a Vail Resorts | | 83,620 | 79 | 1.4% |
| | Total | | 3,148,618 | | 53.0% |
| (1) | The lease with Capital One Services, Inc. expired on October 31, 2009. |
| (2) | The lease with Citicorp Credit Services, Inc. is guaranteed by Citigroup. |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule H
Definition of Funds From Operations (“FFO”),
and FFO plus Gains on Sales (“FFO+GOS”)
The Company evaluates the performance of its reportable segments based on several measures including, Funds From Operations (“FFO”) and FFO plus Gains on Sales (“FFO+GOS”) as management believes they represent important measures of activity and are an important consideration in determining distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with generally accepted accounting principles, or GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, 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. The Company defines FFO+GOS as FFO as defined above, plus gains (or losses) from sales of properties and provisions for assets held for sale, if applicable.
FFO and FFO+GOS should not be considered as alternatives to net income (determined in accordance with GAAP), as indicators of the Company’s financial performance, nor as alternatives to cash flows from operating activities (determined in accordance with GAAP), nor as measures of the Company’s liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company’s needs. Other real estate companies may define these terms in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, FFO and FFO+GOS should be examined in connection with net income and cash flows from operating, investing and financing activities in the condensed consolidated financial statements.
