Exhibit 99.1
| PRESS RELEASE | Franklin Street Properties Corp. | |
| 401 Edgewater Place· Suite 200· Wakefield, Massachusetts 01880· (781) 557-1300· www.franklinstreetproperties.com | ||
| Contact: John Demeritt (877) 686-9496 | FOR IMMEDIATE RELEASE | |
FRANKLIN STREET PROPERTIES CORP. ANNOUNCES
SECOND QUARTER 2011 RESULTS
Wakefield, MA—August 2, 2011—Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE Amex: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $20.1 million or $0.25 per share for the second quarter ended June 30, 2011. The Company also announced Net Income of $10.4 million and Earnings Per Share (EPS) of $0.13 for the second quarter 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 on page 4 of this press release.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| (in 000's except per share data) | 2011 | 2010 | Increase (Decrease) | 2011 | 2010 | Increase (Decrease) | ||||||||||||||||||
| Net Income | $ | 10,381 | $ | 5,954 | $ | 4,427 | $ | 35,148 | $ | 11,516 | $ | 23,632 | ||||||||||||
| FFO | $ | 20,140 | $ | 16,702 | $ | 3,438 | $ | 36,390 | $ | 33,352 | $ | 3,038 | ||||||||||||
| GOS | 2,346 | — | 2,346 | 21,939 | — | 21,939 | ||||||||||||||||||
| FFO+GOS | $ | 22,486 | $ | 16,702 | $ | 5,784 | $ | 58,329 | $ | 33,352 | $ | 24,977 | ||||||||||||
| Per Share Data: | ||||||||||||||||||||||||
| EPS | $ | 0.13 | $ | 0.07 | $ | 0.06 | $ | 0.43 | $ | 0.14 | $ | 0.29 | ||||||||||||
| FFO | $ | 0.25 | $ | 0.21 | $ | 0.04 | $ | 0.45 | $ | 0.42 | $ | 0.03 | ||||||||||||
| GOS | $ | 0.03 | $ | — | $ | 0.03 | $ | 0.27 | $ | — | $ | 0.27 | ||||||||||||
| FFO+GOS | $ | 0.28 | $ | 0.21 | $ | 0.07 | $ | 0.72 | $ | 0.42 | $ | 0.30 | ||||||||||||
| Weighted average | ||||||||||||||||||||||||
| shares (diluted) | 81,437 | 79,681 | 1,756 | 81,437 | 79,681 | 1,756 | ||||||||||||||||||
Comparing results for the second quarter of 2011 to 2010, Net Income and EPS increased $4.4 million or $0.06 per share, FFO increased $3.4 million or $0.04 per share and FFO+GOS increased $5.8 million or $0.07 per share. The increase in FFO was primarily attributable to an increase in real estate FFO of $0.4 million and an increase in investment banking FFO of $3.0 million. The increase in real estate FFO was primarily from three new acquisitions made in March 2011, and the benefits of increased occupancy in the real estate portfolio at June 30, 2011, compared to June 30, 2010, and was partially offset by the sale of a property in Falls Church, Virginia in January 2011. The increase from investment banking resulted from greater sales of securities by our investment bank, which were $42.6 million for the second quarter of 2011 as compared to $8.4 million in the second quarter of 2010. Revenue from our investment bank is primarily based on the value of securities sales. The sale of a property in June 2011 located in Savage, Maryland contributed $2.3 million or $0.03 per share of GOS for the second quarter of 2011. There was no GOS during the second quarter of 2010.
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Comparing results for the first half of 2011 to 2010, Net Income and EPS increased $23.6 million or $0.29 per share, FFO increased $3.0 million or $0.03 per share and FFO+GOS increased $25.0 million or $0.30 per share. The increase in FFO was primarily attributable to an increase in investment banking FFO of $3.6 million and was partially offset by a decrease in real estate FFO of $0.6 million. The decrease in real estate FFO was primarily a result of timing of the sale of a property in Falls Church, Virginia in January 2011, for which proceeds were not reinvested until March of 2011, compared to results in the first half of 2010, where we did not sell properties. The increase in investment banking FFO resulted from greater sales of securities by our investment bank, which were $50.1 million during the first half of 2011 as compared to $10.4 million for the first half of 2010. Revenue from our investment bank is primarily based on the value of 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 first half of 2011. There was no GOS during the first half of 2010.
George J. Carter, President and CEO, commented as follows:
“For the second quarter of 2011, FSP's profits as represented by FFO + GOS totaled approximately $22.5 million or $0.28 per share, a decrease of $0.16 per share compared to the first quarter of 2011. Dividend distributions declared for the second quarter of 2011, which are payable on August 19, 2011, will be approximately $15.5 million or $0.19 per share.
Our directly-owned real estate portfolio of 34 properties, totaling 6,747,815 square feet, was approximately 86.9% leased as of June 30, 2011, down from approximately 88.4% leased as of March 31, 2011. Our property portfolio is primarily suburban office assets. Most of the rental/leasing markets where our properties are located have stabilized, albeit at lower levels than before the recent downturn. It is our objective to move overall occupancy levels in the property portfolio to the 90+% range. We believe we can make meaningful progress toward that goal throughout the balance of 2011.
Although there were no new property acquisitions completed in the second quarter, we continue to have such acquisitions as a major objective and expect to be able to acquire additional properties during the balance of the year.
During the second quarter of 2011, our Investment Banking Group raised $42,575,000 of a $62,000,000 private placement offering that began in March of this year. There remains approximately $16,675,000 of that offering to complete. Total equity raised during the first half of 2011 was $50,075,000. We see our typical investor’s confidence and interest in commercial real estate to be changeable and very dependent on broader capital market/stock market activity. Capital raising efforts in this business over any specific period of time are likely to remain unpredictable.
On June 24, 2011, we sold our Bollman Place industrial property located in Savage, Maryland for approximately $7.5 million. The sale produced a gain of approximately $2.3 million or $0.03 per share. The property was our only industrial asset totaling approximately 98,745 square feet. We have continued to witness generally improving pricing and liquidity for quality properties in certain markets; and, consequently, we continue to consider some of our properties for possible disposition.
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We believe FSP continues to be in an excellent environment to position itself for meaningful future growth in profits and dividends. Our company will continue to use its capabilities, conservative financial structure and expanded credit facility to take advantage of competitive tenant leasing requirements, attractive real estate acquisition and disposition opportunities and opportunistic investment banking situations that are presenting themselves as a result of the current cyclical softness in the economy and certain commercial property markets. Since the fourth quarter of 2007, we viewed 2010 as likely our most challenging year in dealing with a broad, financially-precipitated, cyclical economic downturn. As we begin the second half of 2011, we are optimistic that FSP has managed its major challenges, while taking advantage of positioning opportunities that traditionally only present themselves during severe economic downturns. We are very much looking forward to our future growth potential.”
Dividend Announcement
On July 15, 2011, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended June 30, 2011 of $0.19 per share of common stock payable on August 19, 2011 to stockholders of record on July 29, 2011.
Real Estate Update
Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 34 properties and for three non-consolidated REITs that we had interests in as of June 30, 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.
| -4- |
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. 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 | Six Months Ended | ||||||||||||||
| June 30, | June 30, | |||||||||||||||
| (In thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
| Net income | $ | 10,381 | $ | 5,954 | $ | 35,148 | $ | 11,516 | ||||||||
| Less gain on sale of properties | (2,346 | ) | — | (21,939 | ) | — | ||||||||||
| GAAP (income) loss from non-consolidated REITs | (1,166 | ) | (380 | ) | (2,938 | ) | (633 | ) | ||||||||
| Distributions from non-consolidated REITs | 1,215 | 1,324 | 2,982 | 2,731 | ||||||||||||
| Acquisition costs of new properties | 9 | 129 | 278 | 129 | ||||||||||||
| Depreciation & amortization | 12,047 | 9,675 | 22,859 | 19,609 | ||||||||||||
| Funds From Operations (FFO) | 20,140 | 16,702 | 36,390 | 33,352 | ||||||||||||
| Plus gains on sales of assets (GOS) | 2,346 | — | 21,939 | — | ||||||||||||
| FFO+GOS | $ | 22,486 | $ | 16,702 | $ | 58,329 | $ | 33,352 | ||||||||
| Per Share Data | ||||||||||||||||
| EPS | $ | 0.13 | $ | 0.07 | $ | 0.43 | $ | 0.14 | ||||||||
| FFO | $ | 0.25 | $ | 0.21 | $ | 0.45 | $ | 0.42 | ||||||||
| GOS | $ | 0.03 | $ | — | $ | 0.27 | $ | — | ||||||||
| FFO+GOS | $ | 0.28 | $ | 0.21 | $ | 0.72 | $ | 0.42 | ||||||||
| Weighted average shares (basic and diluted) | 81,437 | 79,681 | 81,437 | 79,681 | ||||||||||||
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 August 3, 2011 at 10:00 a.m. (ET) to discuss the second quarter 2011 results. To access the call, please dial 1-866-788-0539, passcode 90544833. Internationally, the call may be accessed by dialing 1-857-350-1677, passcode 90544833. 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 atwww.franklinstreetproperties.com.
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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, 2010), 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, 2010, 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 |
| -6- |
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income Statements
(Unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| (in thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
| Revenue: | ||||||||||||||||
| Rental | $ | 33,605 | $ | 27,046 | $ | 64,705 | $ | 55,634 | ||||||||
| Related party revenue: | ||||||||||||||||
| Syndication fees | 2,973 | 541 | 3,490 | 662 | ||||||||||||
| Transaction fees | 2,685 | 753 | 3,376 | 899 | ||||||||||||
| Management fees and interest income from loans | 1,150 | 559 | 1,958 | 1,091 | ||||||||||||
| Other | 7 | 6 | 13 | 15 | ||||||||||||
| Total revenue | 40,420 | 28,905 | 73,542 | 58,301 | ||||||||||||
| Expenses: | ||||||||||||||||
| Real estate operating expenses | 8,765 | 7,335 | 17,495 | 15,284 | ||||||||||||
| Real estate taxes and insurance | 5,228 | 4,038 | 9,987 | 9,011 | ||||||||||||
| Depreciation and amortization | 12,067 | 8,485 | 22,850 | 16,945 | ||||||||||||
| Selling, general and administrative | 2,396 | 2,559 | 4,764 | 4,730 | ||||||||||||
| Commissions | 1,555 | 336 | 1,843 | 450 | ||||||||||||
| Interest | 3,578 | 1,735 | 5,986 | 3,388 | ||||||||||||
| Total expenses | 33,589 | 24,488 | 62,925 | 49,808 | ||||||||||||
| Income before interest income, equity in earnings of | ||||||||||||||||
| non-consolidated REITs and taxes | 6,831 | 4,417 | 10,617 | 8,493 | ||||||||||||
| Interest income | 9 | 9 | 20 | 17 | ||||||||||||
| Equity in earnings of non-consolidated REITs | 1,166 | 380 | 2,134 | 633 | ||||||||||||
| Income before taxes on income | 8,006 | 4,806 | 12,771 | 9,143 | ||||||||||||
| Taxes on income (benefit) | 68 | 5 | 118 | (64 | ) | |||||||||||
| Income from continuing operations | 7,938 | 4,801 | 12,653 | 9,207 | ||||||||||||
| Discontinued operations: | ||||||||||||||||
| Income from discontinued operations | 97 | 1,153 | 556 | 2,309 | ||||||||||||
| Gain on sale of property less applicable income tax | 2,346 | — | 21,939 | — | ||||||||||||
| Total discontinued operations | 2,443 | 1,153 | 22,495 | 2,309 | ||||||||||||
| Net income | $ | 10,381 | $ | 5,954 | $ | 35,148 | $ | 11,516 | ||||||||
| Weighted average number of shares outstanding, | ||||||||||||||||
| basic and diluted | 81,437 | 79,681 | 81,437 | 79,681 | ||||||||||||
| Earnings per share, basic and diluted, attributable to: | ||||||||||||||||
| Continuing operations | $ | 0.10 | $ | 0.06 | $ | 0.15 | $ | 0.11 | ||||||||
| Discontinued operations | 0.03 | 0.01 | 0.28 | 0.03 | ||||||||||||
| Net income per share, basic and diluted | $ | 0.13 | $ | 0.07 | $ | 0.43 | $ | 0.14 | ||||||||
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Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||
| (in thousands, except share and par value amounts) | 2011 | 2010 | ||||||
| Assets: | ||||||||
| Real estate assets, net | $ | 976,131 | $ | 862,698 | ||||
| Acquired real estate leases, less accumulated amortization | ||||||||
| of $23,215 and $19,294, respectively | 81,455 | 40,578 | ||||||
| Investment in non-consolidated REITs | 88,654 | 89,327 | ||||||
| Assets held for syndication, net | 11,206 | 2,976 | ||||||
| Assets held for sale | — | 74,947 | ||||||
| Cash and cash equivalents | 28,881 | 68,213 | ||||||
| Restricted cash | 459 | 420 | ||||||
| Tenant rent receivables, less allowance for doubtful accounts | ||||||||
| of $1,235 and $1,600, respectively | 1,846 | 1,922 | ||||||
| Straight-line rent receivable, less allowance for doubtful accounts | ||||||||
| of $135 and $700, respectively | 23,745 | 18,752 | ||||||
| Prepaid expenses | 1,255 | 1,654 | ||||||
| Related party mortgage loan receivable | 61,916 | 57,684 | ||||||
| Other assets | 5,760 | 685 | ||||||
| Office computers and furniture, net of accumulated depreciation | ||||||||
| of $582 and $493, respectively | 477 | 503 | ||||||
| Deferred leasing commissions, net of accumulated amortization | ||||||||
| of $7,773 and $7,175, respectively | 21,979 | 18,376 | ||||||
| Total assets | $ | 1,303,764 | $ | 1,238,735 | ||||
| Liabilities and Stockholders’ Equity: | ||||||||
| Liabilities: | ||||||||
| Bank note payable | $ | 345,000 | $ | 209,968 | ||||
| Term loan payable | — | 74,850 | ||||||
| Accounts payable and accrued expenses | 21,431 | 22,435 | ||||||
| Accrued compensation | 1,070 | 1,803 | ||||||
| Tenant security deposits | 2,476 | 1,930 | ||||||
| Other liabilities: derivative termination value | 447 | 1,077 | ||||||
| Acquired unfavorable real estate leases, less accumulated amortization | ||||||||
| of $3,082 and $2,744, respectively | 6,950 | 5,114 | ||||||
| Total liabilities | 377,374 | 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, 81,437,405 and 81,437,405 shares issued and outstanding, respectively | 8 | 8 | ||||||
| Additional paid-in capital | 1,025,491 | 1,025,491 | ||||||
| Accumulated other comprehensive loss | (447 | ) | (1,077 | ) | ||||
| Accumulated distributions in excess of accumulated earnings | (98,662 | ) | (102,864 | ) | ||||
| Total stockholders’ equity | 926,390 | 921,558 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,303,764 | $ | 1,238,735 | ||||
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Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| For the Six Months Ended June 30, | ||||||||
| (in thousands) | 2011 | 2010 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 35,148 | $ | 11,516 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization expense | 23,670 | 18,597 | ||||||
| Amortization of above market lease | (62 | ) | 1,147 | |||||
| Gain on sale of real estate assets | (21,939 | ) | — | |||||
| Equity in earnings of non-consolidated REITs | (2,844 | ) | (633 | ) | ||||
| Distributions from non-consolidated REITs | 2,982 | 2,731 | ||||||
| Increase (decrease) in bad debt reserve | (365 | ) | 480 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Restricted cash | (39 | ) | 275 | |||||
| Tenant rent receivables, net | 441 | 402 | ||||||
| Straight-line rents, net | (5,176 | ) | (1,759 | ) | ||||
| Prepaid expenses and other assets, net | 914 | (224 | ) | |||||
| Accounts payable and accrued expenses | (726 | ) | (4,139 | ) | ||||
| Accrued compensation | (733 | ) | (376 | ) | ||||
| Tenant security deposits | 546 | 196 | ||||||
| Payment of deferred leasing commissions | (5,386 | ) | (7,085 | ) | ||||
| Net cash provided by operating activities | 26,431 | 21,128 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of real estate assets, office computers and furniture | (128,054 | ) | (45,848 | ) | ||||
| Acquired real estate leases | (45,032 | ) | — | |||||
| Investments in non-consolidated REITs | (10 | ) | — | |||||
| Investment in related party mortgage loan receivable | (4,232 | ) | (9,735 | ) | ||||
| Changes in deposits on real estate assets | 200 | — | ||||||
| Investment in assets held for syndication, net | (8,200 | ) | 4,858 | |||||
| Proceeds received on sales of real estate assets | 96,790 | — | ||||||
| Net cash used in investing activities | (88,538 | ) | (50,725 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Distributions to stockholders | (30,946 | ) | (30,279 | ) | ||||
| Equity offering costs | (90 | ) | (1 | ) | ||||
| Borrowings under bank note payable | 345,000 | 53,960 | ||||||
| Repayment of bank note payable | (209,968 | ) | — | |||||
| Repayment of term loan payable | (74,850 | ) | — | |||||
| Deferred financing costs | (5,389 | ) | — | |||||
| Swap termination payment | (982 | ) | — | |||||
| Net cash provided by (used in) financing activities | 22,775 | 23,680 | ||||||
| Net decrease in cash and cash equivalents | (39,332 | ) | (5,917 | ) | ||||
| Cash and cash equivalents, beginning of period | 68,213 | 27,404 | ||||||
| Cash and cash equivalents, end of period | $ | 28,881 | $ | 21,487 | ||||
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Franklin Street Properties Corp. Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary Information
(Unaudited & Approximated)
| Commercial portfolio lease expirations (1) | ||||||||
| As of June 30, 2011 | ||||||||
| Total | % of | |||||||
| Year | Square Feet | Portfolio | ||||||
| 2011 | 203,228 | 3.0% | ||||||
| 2012 | 297,239 | 4.4% | ||||||
| 2013 | 412,196 | 6.1% | ||||||
| 2014 | 423,693 | 6.3% | ||||||
| 2015 | 789,042 | 11.7% | ||||||
| Thereafter (2) | 4,622,417 | 68.5% | ||||||
| 6,747,815 | 100.0% | |||||||
(1) Percentages are determined based upon square footage of expiring commercial leases.
(2) Includes 886,825 square feet of current vacancies.
| (dollars & square feet in 000's) | As of June 30, 2011 | |||||
| # of | % of | Square | % of | |||
| State | Properties | Investment | Portfolio | Feet | Portfolio | |
| Texas | 9 | $ 285,547 | 29.3% | 1,906 | 28.3% | |
| Colorado | 4 | 124,843 | 12.8% | 789 | 11.7% | |
| Virginia | 4 | 100,531 | 10.3% | 696 | 10.3% | |
| Minnesota | 2 | 37,934 | 3.9% | 627 | 9.3% | |
| Missouri | 3 | 69,084 | 7.1% | 477 | 7.1% | |
| Maryland | 1 | 54,938 | 5.6% | 325 | 4.8% | |
| Georgia | 1 | 72,714 | 7.4% | 387 | 5.7% | |
| Michigan | 1 | 15,013 | 1.5% | 215 | 3.2% | |
| Florida | 1 | 46,394 | 4.8% | 213 | 3.2% | |
| Indiana | 1 | 35,212 | 3.6% | 205 | 3.0% | |
| Illinois | 1 | 28,142 | 2.9% | 177 | 2.6% | |
| California | 2 | 21,743 | 2.2% | 182 | 2.7% | |
| North Carolina | 3 | 69,543 | 7.1% | 431 | 6.4% | |
| Washington | 1 | 14,493 | 1.5% | 117 | 1.7% | |
| 34 | $ 976,131 | 100.0% | 6,747 | 100.0% | ||
| -10- |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
| Capital Expenditures | ||||||||
| Owned Portfolio | Six Months Ended | |||||||
| (in thousands) | 30-Jun-11 | 30-Jun-10 | ||||||
| Tenant improvements | $5,721 | $2,240 | ||||||
| Deferred leasing costs | 5,386 | 7,085 | ||||||
| Building improvements | 1,325 | 878 | ||||||
| $ | 12,432 | $ | 10,203 | |||||
| Square foot & leased percentages | June 30, | December 31, | |||
| 2011 | 2010 | ||||
| Owned portfolio of commercial real estate | |||||
| Number of properties (1) | 34 | 33 | (1) | ||
| Square feet | 6,747,815 | 6,422,357 | |||
| Leased percentage | 87% | 86% | |||
| Investments in non-consolidated REITs | |||||
| Number of properties | 3 | 3 | |||
| Square feet | 1,996,457 | 1,995,913 | |||
| Leased percentage | 82% | 77% | |||
| Single Asset REITs (SARs) managed | |||||
| Number of properties | 13 | 12 | |||
| Square feet | 3,322,569 | 2,915,896 | |||
| Leased percentage | 79% | 75% | |||
| Total owned, investments & managed properties | |||||
| Number of properties | 50 | 48 | |||
| Square feet | 12,066,841 | 11,334,166 | |||
| Leased percentage | 84% | 81% | |||
| (1) Includes asset held for sale at 12/31/2010 | |||||
The following table shows property information for our investments in non-consolidated REITs:
| Square | % Leased | % Interest | |||
| Single Asset REIT name | City | State | Feet | 30-Jun-11 | Held |
| FSP 303 East Wacker Drive Corp. | Chicago | IL | 844,953 | 94.0% | 43.7% |
| FSP Grand Boulevard Corp. | Kansas City | MO | 532,472 | 76.4% | 27.0% |
| FSP Phoenix Tower Corp. | Houston | TX | 619,032 | 71.5% | 4.6% |
| 1,996,457 | 82.3% |
| -11- |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F: Quarterly Information
(Unaudited)
| (in 000's) | ||||||||||||||||
| Q2 | Q3 | Q4 | Q1 | |||||||||||||
| Revenue: | 2010 | 2010 | 2010 | 2011 | ||||||||||||
| Rental | $ | 27,046 | $ | 29,222 | $ | 29,782 | $ | 31,100 | ||||||||
| Related party revenue: | ||||||||||||||||
| Syndication fees | 541 | 20 | 1,862 | 517 | ||||||||||||
| Transaction fees | 753 | 246 | 1,582 | 691 | ||||||||||||
| Management fees and | ||||||||||||||||
| interest income from loans | 559 | 630 | 719 | 808 | ||||||||||||
| Other | 6 | 20 | 54 | 6 | ||||||||||||
| Total revenue | 28,905 | 30,138 | 33,999 | 33,122 | ||||||||||||
| Expenses: | ||||||||||||||||
| Real estate operating expenses | 7,335 | 8,714 | 9,602 | 8,730 | ||||||||||||
| Real estate taxes and insurance | 4,038 | 4,636 | 4,430 | 4,759 | ||||||||||||
| Depreciation and amortization | 8,485 | 9,655 | 9,729 | 10,783 | ||||||||||||
| Selling, general and administrative | 2,559 | 2,074 | 2,482 | 2,368 | ||||||||||||
| Commissions | 336 | 16 | 1,011 | 288 | ||||||||||||
| Interest | 1,735 | 1,892 | 2,004 | 2,408 | ||||||||||||
| Total expenses | 24,488 | 26,987 | 29,258 | 29,336 | ||||||||||||
| Income before interest income, equity | ||||||||||||||||
| in earnings in non-consolidated REITs | 4,417 | 3,151 | 4,741 | 3,786 | ||||||||||||
| Interest income | 9 | 4 | 4 | 11 | ||||||||||||
| Equity in earnings in non-consolidated REITs | 380 | 404 | 229 | 968 | ||||||||||||
| Income before taxes on income | 4,806 | 3,559 | 4,974 | 4,765 | ||||||||||||
| Taxes on income | 5 | (37 | ) | 317 | 50 | |||||||||||
| Income from continuing operations | 4,801 | 3,596 | 4,657 | 4,715 | ||||||||||||
| Income from discontinued operations | 1,153 | 1,161 | 1,163 | 459 | ||||||||||||
| Income before gain on sale of properties | 5,954 | 4,757 | 5,820 | 5,174 | ||||||||||||
| Gain on sale of assets | — | — | — | 19,593 | ||||||||||||
| Net income | $ | 5,954 | $ | 4,757 | $ | 5,820 | $ | 24,767 | ||||||||
| FFO and FFO+GOS calculations: | ||||||||||||||||
| Net income | $ | 5,954 | $ | 4,757 | $ | 5,820 | $ | 24,767 | ||||||||
| (Gain) Loss on sale of assets | — | — | — | (19,593 | ) | |||||||||||
| GAAP income from non-consolidated REITs | (380 | ) | (404 | ) | (153 | ) | (1,772 | ) | ||||||||
| Distributions from non-consolidated REITs | 1,324 | 1,192 | 1,247 | 1,767 | ||||||||||||
| Acquisition costs of new properties | 129 | (4 | ) | — | 269 | |||||||||||
| Depreciation of real estate and intangible amortization | 9,675 | 10,510 | 10,605 | 10,812 | ||||||||||||
| Funds From Operations (FFO) | 16,702 | 16,051 | 17,519 | 16,250 | ||||||||||||
| Plus gains on sales of assets | — | — | — | 19,593 | ||||||||||||
| FFO+GOS | $ | 16,702 | $ | 16,051 | $ | 17,519 | $ | 35,843 | ||||||||
| -12- |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Percentage of Leased Space
(Unaudited & Estimated)
| First | Second | ||||||
| % Leased (1) | Quarter | % Leased (1) | Quarter | ||||
| as of | Average % | as of | Average % | ||||
| Property Name | Location | Square Feet | 31-Mar-11 | Leased (2) | 30-Jun-11 | Leased (2) | |
| 1 | PARK SENECA | Charlotte, NC | 109,550 | 78.5% | 78.5% | 80.1% | 79.1% |
| 2 | HILLVIEW CENTER | Milpitas, CA | 36,288 | 100.0% | 100.0% | 100.0% | 100.0% |
| 3 | SOUTHFIELD | Southfield, MI | 214,697 | 61.1% | 61.0% | 39.2% | 41.7% |
| 4 | FOREST PARK | Charlotte, NC | 62,212 | 77.5% | 77.5% | 100.0% | 85.0% |
| 5 | CENTENNIAL | Colorado Springs, CO | 110,730 | 66.9% | 66.9% | 66.9% | 66.9% |
| 6 | MEADOW POINT | Chantilly, VA | 138,537 | 100.0% | 98.6% | 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% | 38.5% | 42.0% | 42.0% |
| 9 | NORTHWEST POINT | Elk Grove Village, IL | 176,848 | 100.0% | 100.0% | 100.0% | 100.0% |
| 10 | TIMBERLAKE EAST | Chesterfield, MO | 116,197 | 100.0% | 100.0% | 100.0% | 100.0% |
| 11 | PARK TEN | Houston, TX | 155,715 | 98.8% | 95.4% | 98.8% | 98.8% |
| 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 CROSSING | Richardson, TX | 298,766 | 79.1% | 79.1% | 79.7% | 79.3% |
| 15 | GREENWOOD PLAZA | Englewood, CO | 197,527 | 60.1% | 60.1% | 54.3% | 58.2% |
| 16 | RIVER CROSSING | Indianapolis, IN | 205,059 | 93.8% | 93.8% | 93.5% | 93.4% |
| 17 | LIBERTY PLAZA | Addison, TX | 218,934 | 75.6% | 74.3% | 75.6% | 75.6% |
| 18 | INNSBROOK | Glen Allen, VA | 310,060 | 60.8% | 61.0% | 63.7% | 67.3% |
| 19 | 380 INTERLOCKEN | Broomfield, 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 GREEN | Houston, TX | 248,399 | 100.0% | 100.0% | 100.0% | 100.0% |
| 22 | WILLOW BEND | Plano, TX | 116,622 | 67.0% | 63.2% | 83.1% | 76.8% |
| 23 | ONE OVERTON PARK | Atlanta, GA | 387,267 | 92.4% | 92.4% | 91.1% | 91.5% |
| 24 | 390 INTERLOCKEN | Broomfield, CO | 241,516 | 95.9% | 95.9% | 95.9% | 95.9% |
| 25 | EAST BALTIMORE | Baltimore, MD | 325,445 | 84.5% | 84.3% | 55.7% | 55.5% |
| 26 | PARK TEN PHASE II | Houston, TX | 156,746 | 100.0% | 99.1% | 100.0% | 100.0% |
| 27 | LAKESIDE CROSSING I | Maryland 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 STONECROFT | Chantilly, VA | 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 EIGHTH ST | Minneapolis, MN | 473,979 | 92.2% | 92.2% | 92.5% | 92.1% |
| 32 | EMPEROR BOULEVARD | Durham, NC | 259,531 | 100.0% | 100.0% | 100.0% | 100.0% |
| 33 | LEGACY TENNYSON CTR | Plano, TX | 202,600 | 100.0% | 100.0% | 100.0% | 100.0% |
| 34 | ONE LEGACY | Plano, TX | 214,110 | 89.7% | 89.7% | 100.0% | 94.6% |
| TOTAL WEIGHTED AVERAGE (3) | 6,747,815 | 88.4% | 87.4% | 86.9% | 86.9% | ||
| (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) First & Second Quarter Totals include Bollman Place (98,745 sf) located in Savage, Maryland, which was sold in June 2011. | |||||||
| -13- |
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 June 30, 2011 | ||||||
| % of | ||||||
| Tenant | Sq Ft | SIC Code | Portfolio | |||
| 1 | TCF National Bank | 267,470 | 60 | 4.0% | ||
| 2 | Quintiles Transnational Corp | 259,531 | 87 | 3.8% | ||
| 3 | CITGO Petroleum Corporation | 248,399 | 29 | 3.7% | ||
| 4 | Burger King Corporation | 212,619 | 58 | 3.1% | ||
| 5 | Denbury Onshore LLC | 202,600 | 13 | 3.0% | ||
| 6 | RGA Reinsurance Company | 185,501 | 63 | 2.7% | ||
| 7 | Citicorp Credit Services, Inc | 176,848 | 61 | 2.6% | ||
| 8 | C.H. Robinson Worldwide, Inc | 153,028 | 47 | 2.3% | ||
| 9 | SunTrust Bank | 150,142 | 60 | 2.2% | ||
| 10 | Murphy Exploration & Production Company | 144,677 | 13 | 2.1% | ||
| 11 | Giesecke & Devrient America, Inc. | 135,888 | 73 | 2.0% | ||
| 12 | Monsanto Company | 127,778 | 28 | 1.9% | ||
| 13 | Vail Holdings, Inc. | 121,913 | 79 | 1.8% | ||
| 14 | Northrop Grumman Systems Corporation | 111,469 | 73 | 1.7% | ||
| 15 | Alliance Data Systems | 96,749 | 51 | 1.4% | ||
| 16 | Federal National Mortgage Association | 92,358 | 61 | 1.4% | ||
| 17 | Amdocs, Inc | 91,928 | 73 | 1.4% | ||
| 18 | County of Santa Clara | 90,467 | 91 | 1.3% | ||
| 19 | VCE Company, LLC | 85,650 | 81 | 1.3% | ||
| 20 | Argo Data Resource Corporation | 85,641 | 73 | 1.3% | ||
| Total | 3,040,656 | 45.0% |
| -14- |
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 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 consolidated financial statements.