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
THIRD QUARTER 2011 RESULTS
Wakefield, MA—November 1, 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 $16.4 million or $0.20 per share for the third quarter ended September 30, 2011. The Company also announced Net Income of $3.3 million and Earnings Per Share (EPS) of $0.04 for the third 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 September 30, | | Nine Months Ended September 30, |
| (in 000's except per share data) | | 2011 | | 2010 | | Increase
(Decrease) | | 2011 | | 2010 | | Increase
(Decrease) |
| | | | | | | | | | | | | |
| Net Income | | $ | 3,314 | | | $ | 4,757 | | | $ | (1,443 | ) | | $ | 38,462 | | | $ | 16,273 | | | $ | 22,189 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| FFO | | $ | 16,362 | | | $ | 16,052 | | | $ | 310 | | | $ | 52,752 | | | $ | 49,404 | | | $ | 3,348 | |
| GOS | | | — | | | | — | | | | — | | | | 21,939 | | | | — | | | | 21,939 | |
| FFO+GOS | | $ | 16,362 | | | $ | 16,052 | | | $ | 310 | | | $ | 74,691 | | | $ | 49,404 | | | $ | 25,287 | |
| Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | |
| EPS | | $ | 0.04 | | | $ | 0.06 | | | $ | (0.02 | ) | | $ | 0.47 | | | $ | 0.20 | | | $ | 0.27 | |
| FFO | | $ | 0.20 | | | $ | 0.20 | | | $ | — | | | $ | 0.65 | | | $ | 0.62 | | | $ | 0.03 | |
| GOS | | $ | — | | | $ | — | | | $ | — | | | $ | 0.27 | | | $ | — | | | $ | 0.27 | |
| FFO+GOS | | $ | 0.20 | | | $ | 0.20 | | | $ | — | | | $ | 0.92 | | | $ | 0.62 | | | $ | 0.30 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted average | | | | | | | | | | | | | | | | | | | | | | | | |
| shares (diluted) | | | 81,600 | | | | 79,751 | | | | 1,849 | | | | 81,492 | | | | 79,704 | | | | 1,788 | |
Comparing results for the third quarter of 2011 to 2010, Net Income and EPS decreased $1.4 million or $0.02 per share, FFO increased $0.3 million and FFO+GOS increased $0.3 million. The increase in FFO was primarily attributable to an increase in real estate FFO of $0.1 million and an increase in investment banking FFO of $0.2 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 September 30, 2011, compared to September 30, 2010, and was partially offset by the sale of two properties in 2011. One is a property in Falls Church, Virginia sold in January 2011 and the other is a property in Savage, Maryland sold in June 2011. The increase from investment banking resulted from greater sales of securities by our investment bank, which were $7.5 million for the third quarter of 2011 as compared to $0.3 million in the third quarter of 2010. Revenue from our investment bank is primarily based on the value of securities sales. There was no GOS during the third quarter of 2011 or 2010.
Comparing results for the nine months ended September 30, 2011 to the same period in 2010, Net Income and EPS increased $22.2 million or $0.27 per share, FFO increased $3.3 million or $0.03 per share and FFO+GOS increased $25.3 million or $0.30 per share. The increase in FFO was primarily attributable to an increase in investment banking FFO of $3.8 million and was partially offset by a decrease in real estate FFO of $0.5 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 2011, compared to results in the nine months ended September 30, 2010, during which we did not sell properties. The increase in investment banking FFO resulted from greater sales of securities by our investment bank, which were $57.6 million during the nine months ended September 30, 2011 as compared to $10.7 million for the same period 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 nine months ended September 30, 2011. There was no GOS during the same period of 2010.
George J. Carter, President and CEO, commented as follows:
“For the third quarter of 2011, FSP's profits as represented by FFO + GOS totaled approximately $16.4 million or $0.20 per share, a decrease of $0.05 per share compared to the second quarter of 2011. Dividend distributions declared for the third quarter of 2011, which are payable on November 18, 2011, are approximately $15.8 million or $0.19 per share.
Our directly-owned real estate portfolio of 35 properties, totaling 6,929,891 square feet, was approximately 88.1% leased as of September 30, 2011, up from approximately 86.9% leased as of June 30, 2011. Our property portfolio is primarily suburban office assets. Many of the rental/leasing markets where our properties are located remained stable during the third quarter, and showed moderate improvement in occupancy and rental-rate levels. The nation’s stalling employment growth as well as financial and regulatory uncertainty appear to be factors in slowing many corporate decisions on potential future office space needs. However, we continue to make leasing progress in our portfolio and continue to have as our objective to move overall occupancy levels to the 90+% range by early 2012.
There was one new property acquisition completed in the third quarter of 2011 for a total purchase price of approximately $35.1 million excluding closing costs and adjustments. The property is located in Evanston, Illinois at 909 Davis Street, and totals approximately 195,245 rentable square feet. It is approximately 95% leased and, together with “Northwest Point” and our preferred share interest in “303 East Wacker”, brings to three our greater Chicago area property investments. Additional real estate investments during the fourth quarter are a major objective of FSP, and we would anticipate additional activity this year. There were no property dispositions in the third quarter.
During the third quarter of 2011, our Investment Banking Group raised $7,475,000 of a $62,000,000 private placement offering that began in March of this year. As of the beginning of the fourth quarter, there remained $9,200,000 of the offering to be subscribed. Investment banking business slowed significantly in the third quarter as we continued to 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.
We believe FSP continues to be in an excellent environment to position itself for meaningful future growth. Our Company will continue to use its capabilities and strong balance sheet to take advantage of competitive tenant leasing requirements and attractive real estate investment opportunities that are presenting themselves as a result of the current cyclical softness in the economy and certain commercial property markets. We are very much looking forward to realizing our future growth potential.”
Dividend Announcement
On October 14, 2011, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended September 30, 2011 of $0.19 per share of common stock payable on November 18, 2011 to stockholders of record on October 28, 2011.
Real Estate Update
Supplementary Schedules D and E provide property information for our continuing real estate portfolio of 35 properties and for three non-consolidated REITs that we had interests in as of September 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.
A reconciliation of Net Income to FFO and FFO+GOS is shown below and definitions of FFO and FFO+GOS are provided on Supplementary Schedule I. We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently. We also believe that FFO+GOS is an important measure as it considers investment performance.
| Reconciliation of Net Income to FFO and FFO+GOS: | | Three Months Ended | | Nine Months Ended |
| | | September 30, | | September 30, |
| (In thousands, except per share amounts) | | 2011 | | 2010 | | 2011 | | 2010 |
| | | | | | | | | |
| Net income | | $ | 3,314 | | | $ | 4,757 | | | $ | 38,462 | | | $ | 16,273 | |
| Less gain on sale of properties | | | — | | | | — | | | | (21,939 | ) | | | — | |
| GAAP (income) loss from non-consolidated REITs | | | (573 | ) | | | (404 | ) | | | (3,511 | ) | | | (1,037 | ) |
| Distributions from non-consolidated REITs | | | 1,104 | | | | 1,192 | | | | 4,086 | | | | 3,923 | |
| Acquisition costs of new properties | | | 185 | | | | (4 | ) | | | 463 | | | | 125 | |
| Depreciation & amortization | | | 12,332 | | | | 10,511 | | | | 35,191 | | | | 30,120 | |
| Funds From Operations (FFO) | | | 16,362 | | | | 16,052 | | | | 52,752 | | | | 49,404 | |
| Plus gains on sales of assets (GOS) | | | — | | | | — | | | | 21,939 | | | | — | |
| FFO+GOS | | $ | 16,362 | | | $ | 16,052 | | | $ | 74,691 | | | $ | 49,404 | |
| | | | | | | | | | | | | | | | | |
| Per Share Data | | | | | | | | | | | | | | | | |
| EPS | | $ | 0.04 | | | $ | 0.06 | | | $ | 0.47 | | | $ | 0.20 | |
| FFO | | $ | 0.20 | | | $ | 0.20 | | | $ | 0.65 | | | $ | 0.62 | |
| GOS | | $ | — | | | $ | — | | | $ | 0.27 | | | $ | — | |
| FFO+GOS | | $ | 0.20 | | | $ | 0.20 | | | $ | 0.92 | | | $ | 0.62 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares (basic and diluted) | | | 81,600 | | | | 79,751 | | | | 81,492 | | | | 79,704 | |
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 2, 2011 at 10:00 a.m. (ET) to discuss the third quarter 2011 results. To access the call, please dial 1-866-831-6272, passcode 96067963. Internationally, the call may be accessed by dialing 1-617-213-8859, passcode 96067963. 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.
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 |
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income Statements
(Unaudited)
| | | For the
Three Months Ended
September 30, | | For the
Nine Months Ended
September 30, |
| (in thousands, except per share amounts) | | 2011 | | 2010 | | 2011 | | 2010 |
| | | | | | | | | |
| Revenue: | | | | | | | | | | | | | | | | |
| Rental | | $ | 33,672 | | | $ | 29,222 | | | $ | 98,377 | | | $ | 84,855 | |
| Related party revenue: | | | | | | | | | | | | | | | | |
| Syndication fees | | | 533 | | | | 20 | | | | 4,023 | | | | 682 | |
| Transaction fees | | | 470 | | | | 246 | | | | 3,846 | | | | 1,145 | |
| Management fees and interest income from loans | | | 1,037 | | | | 630 | | | | 2,995 | | | | 1,721 | |
| Other | | | 7 | | | | 20 | | | | 20 | | | | 35 | |
| Total revenue | | | 35,719 | | | | 30,138 | | | | 109,261 | | | | 88,438 | |
| | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | |
| Real estate operating expenses | | | 9,328 | | | | 8,714 | | | | 26,823 | | | | 23,998 | |
| Real estate taxes and insurance | | | 5,020 | | | | 4,636 | | | | 15,007 | | | | 13,646 | |
| Depreciation and amortization | | | 12,389 | | | | 9,655 | | | | 35,239 | | | | 26,600 | |
| Selling, general and administrative | | | 2,414 | | | | 2,074 | | | | 7,178 | | | | 6,804 | |
| Commissions | | | 349 | | | | 16 | | | | 2,192 | | | | 466 | |
| Interest | | | 3,419 | | | | 1,892 | | | | 9,405 | | | | 5,280 | |
| | | | | | | | | | | | | | | | | |
| Total expenses | | | 32,919 | | | | 26,987 | | | | 95,844 | | | | 76,794 | |
| | | | | | | | | | | | | | | | | |
| Income before interest income, equity in earnings of | | | | | | | | | | | | | | | | |
| non-consolidated REITs and taxes | | | 2,800 | | | | 3,151 | | | | 13,417 | | | | 11,644 | |
| Interest income | | | 8 | | | | 4 | | | | 28 | | | | 21 | |
| Equity in earnings of non-consolidated REITs | | | 573 | | | | 404 | | | | 2,707 | | | | 1,037 | |
| | | | | | | | | | | | | | | | | |
| Income before taxes on income | | | 3,381 | | | | 3,559 | | | | 16,152 | | | | 12,702 | |
| Taxes on income (benefit) | | | 67 | | | | (37 | ) | | | 185 | | | | (101 | ) |
| | | | | | | | | | | | | | | | | |
| Income from continuing operations | | | 3,314 | | | | 3,596 | | | | 15,967 | | | | 12,803 | |
| | | | | | | | | | | | | | | | | |
| Discontinued operations: | | | | | | | | | | | | | | | | |
| Income from discontinued operations | | | — | | | | 1,161 | | | | 556 | | | | 3,470 | |
| Gain on sale of property less applicable income tax | | | — | | | | — | | | | 21,939 | | | | — | |
| Total discontinued operations | | | — | | | | 1,161 | | | | 22,495 | | | | 3,470 | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 3,314 | | | $ | 4,757 | | | $ | 38,462 | | | $ | 16,273 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of shares outstanding, | | | | | | | | | | | | | | | | |
| basic and diluted | | | 81,600 | | | | 79,751 | | | | 81,492 | | | | 79,704 | |
| | | | | | | | | | | | | | | | | |
| Earnings per share, basic and diluted, attributable to: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.04 | | | $ | 0.05 | | | $ | 0.20 | | | $ | 0.16 | |
| Discontinued operations | | | — | | | | 0.01 | | | | 0.27 | | | | 0.04 | |
| Net income per share, basic and diluted | | $ | 0.04 | | | $ | 0.06 | | | $ | 0.47 | | | $ | 0.20 | |
Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheets
(Unaudited)
| | | September 30, | | December 31, |
| (in thousands, except share and par value amounts) | | 2011 | | 2010 |
| Assets: | | | | | | | | |
| Real estate assets, net | | $ | 997,258 | | | $ | 862,698 | |
| Acquired real estate leases, less accumulated amortization | | | | | | | | |
| of $26,668 and $19,294, respectively | | | 91,585 | | | | 40,578 | |
| Investment in non-consolidated REITs | | | 88,225 | | | | 89,327 | |
| Assets held for syndication, net | | | 4,720 | | | | 2,976 | |
| Assets held for sale | | | — | | | | 74,947 | |
| Cash and cash equivalents | | | 44,047 | | | | 68,213 | |
| Restricted cash | | | 477 | | | | 420 | |
| Tenant rent receivables, less allowance for doubtful accounts | | | | | | | | |
| of $1,235 and $1,600, respectively | | | 1,418 | | | | 1,922 | |
| Straight-line rent receivable, less allowance for doubtful accounts | | | | | | | | |
| of $135 and $700, respectively | | | 26,067 | | | | 18,752 | |
| Prepaid expenses | | | 2,553 | | | | 1,654 | |
| Related party mortgage loan receivable | | | 61,916 | | | | 57,684 | |
| Other assets | | | 4,757 | | | | 685 | |
| Office computers and furniture, net of accumulated depreciation | | | | | | | | |
| of $629 and $493, respectively | | | 462 | | | | 503 | |
| Deferred leasing commissions, net of accumulated amortization | | | | | | | | |
| of $8,619 and $7,175, respectively | | | 22,299 | | | | 18,376 | |
| Total assets | | $ | 1,345,784 | | | $ | 1,238,735 | |
| | | | | | | | | |
| Liabilities and Stockholders’ Equity: | | | | | | | | |
| Liabilities: | | | | | | | | |
| Bank note payable | | $ | 375,000 | | | $ | 209,968 | |
| Term loan payable | | | — | | | | 74,850 | |
| Accounts payable and accrued expenses | | | 28,258 | | | | 22,435 | |
| Accrued compensation | | | 1,383 | | | | 1,803 | |
| Tenant security deposits | | | 2,453 | | | | 1,930 | |
| Other liabilities: derivative termination value | | | 63 | | | | 1,077 | |
| Acquired unfavorable real estate leases, less accumulated amortization | | | | | | | | |
| of $3,391 and $2,744, respectively | | | 6,627 | | | | 5,114 | |
| Total liabilities | | | 413,784 | | | | 317,177 | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| Stockholders’ Equity: | | | | | | | | |
| Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding | | | — | | | | — | |
Common stock, $.0001 par value, 180,000,000 shares authorized, 82,937,405 and 81,437,405
shares issued and outstanding, respectively | | | 8 | | | | 8 | |
| Additional paid-in capital | | | 1,042,876 | | | | 1,025,491 | |
| Accumulated other comprehensive loss | | | (63 | ) | | | (1,077 | ) |
| Accumulated distributions in excess of accumulated earnings | | | (110,821 | ) | | | (102,864 | ) |
| Total stockholders’ equity | | | 932,000 | | | | 921,558 | |
| Total liabilities and stockholders’ equity | | $ | 1,345,784 | | | $ | 1,238,735 | |
Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | | For the
Nine Months Ended
September 30, |
| (in thousands) | | 2011 | | 2010 |
| Cash flows from operating activities: | | | | | | | | |
| | | | | | | | | |
| Net income | | $ | 38,462 | | | $ | 16,273 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation and amortization expense | | | 36,563 | | | | 29,078 | |
| Amortization of above market lease | | | (119 | ) | | | 1,243 | |
| Gain on sale of real estate assets | | | (21,939 | ) | | | — | |
| Equity in earnings of non-consolidated REITs | | | (2,805 | ) | | | (1,037 | ) |
| Distributions from non-consolidated REITs | | | 4,086 | | | | 3,923 | |
| Increase (decrease) in bad debt reserve | | | (365 | ) | | | 920 | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Restricted cash | | | (57 | ) | | | 279 | |
| Tenant rent receivables, net | | | 869 | | | | (1,261 | ) |
| Straight-line rents, net | | | (7,404 | ) | | | (2,961 | ) |
| Prepaid expenses and other assets, net | | | 116 | | | | (126 | ) |
| Accounts payable and accrued expenses | | | 4,131 | | | | 615 | |
| Accrued compensation | | | (420 | ) | | | (82 | ) |
| Tenant security deposits | | | 523 | | | | 114 | |
| Payment of deferred leasing commissions | | | (6,710 | ) | | | (7,894 | ) |
| Net cash provided by operating activities | | | 44,931 | | | | 39,084 | |
| Cash flows from investing activities: | | | | | | | | |
| Purchase of real estate assets, office computers and furniture | | | (155,320 | ) | | | (33,096 | ) |
| Acquired real estate leases | | | (58,955 | ) | | | (15,563 | ) |
| Investments in non-consolidated REITs | | | (10 | ) | | | (2 | ) |
| Investment in related party mortgage loan receivable | | | (4,232 | ) | | | (17,221 | ) |
| Changes in deposits on real estate assets | | | 200 | | | | — | |
| Investment in assets held for syndication, net | | | (2,427 | ) | | | 4,858 | |
| Proceeds received on sales of real estate assets | | | 96,790 | | | | — | |
| Net cash used in investing activities | | | (123,954 | ) | | | (61,024 | ) |
| Cash flows from financing activities: | | | | | | | | |
| Distributions to stockholders | | | (46,419 | ) | | | (45,418 | ) |
| Proceeds from offering | | | 18,001 | | | | 1,906 | |
| Equity offering costs | | | (536 | ) | | | (358 | ) |
| Borrowings under bank note payable | | | 375,000 | | | | 58,960 | |
| 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 financing activities | | | 54,857 | | | | 15,090 | |
| Net decrease in cash and cash equivalents | | | (24,166 | ) | | | (6,850 | ) |
| Cash and cash equivalents, beginning of period | | | 68,213 | | | | 27,404 | |
| Cash and cash equivalents, end of period | | $ | 44,047 | | | $ | 20,554 | |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary Information
(Unaudited & Approximated)
| Commercial portfolio lease expirations (1) |
| As of September 30, 2011 |
| | | | | |
| | | Total | | % of |
| Year | | Square Feet | | Portfolio |
| 2011 | | 123,479 | | 1.8% |
| 2012 | | 325,061 | | 4.7% |
| 2013 | | 419,885 | | 6.1% |
| 2014 | | 432,333 | | 6.2% |
| 2015 | | 798,433 | | 11.5% |
| Thereafter (2) | | 4,830,700 | | 69.7% |
| | | 6,929,891 | | 100.0% |
| (1) | | Percentages are determined based upon square footage of expiring commercial leases. |
| (2) | | Includes 824,236 square feet of current vacancies. |
| (dollars & square feet in 000's) | As of September 30, 2011 |
| | | # of | | | | % of | | Square | | % of |
| State | | Properties | | Investment | | Portfolio | | Feet | | Portfolio |
| | | | | | | | | | | | | | | | | | | | | |
| Texas | | | 9 | | | $ | 286,147 | | | | 28.7 | % | | | 1,906 | | | | 27.5 | % |
| Colorado | | | 4 | | | | 123,866 | | | | 12.4 | % | | | 789 | | | | 11.4 | % |
| Virginia | | | 4 | | | | 101,302 | | | | 10.2 | % | | | 685 | | | | 9.9 | % |
| Minnesota | | | 2 | | | | 38,127 | | | | 3.8 | % | | | 625 | | | | 9.0 | % |
| Missouri | | | 3 | | | | 68,642 | | | | 6.9 | % | | | 477 | | | | 6.9 | % |
| North Carolina | | | 3 | | | | 69,158 | | | | 6.9 | % | | | 431 | | | | 6.2 | % |
| Georgia | | | 1 | | | | 72,218 | | | | 7.2 | % | | | 387 | | | | 5.6 | % |
| Illinois | | | 2 | | | | 50,956 | | | | 5.1 | % | | | 372 | | | | 5.4 | % |
| Maryland | | | 1 | | | | 54,702 | | | | 5.5 | % | | | 325 | | | | 4.7 | % |
| Michigan | | | 1 | | | | 15,115 | | | | 1.5 | % | | | 215 | | | | 3.1 | % |
| Florida | | | 1 | | | | 46,097 | | | | 4.6 | % | | | 213 | | | | 3.1 | % |
| Indiana | | | 1 | | | | 34,937 | | | | 3.5 | % | | | 205 | | | | 3.0 | % |
| California | | | 2 | | | | 21,619 | | | | 2.2 | % | | | 182 | | | | 2.6 | % |
| Washington | | | 1 | | | | 14,373 | | | | 1.4 | % | | | 117 | | | | 1.7 | % |
| | | | 35 | | | $ | 997,258 | | | | 100.0 | % | | | 6,929 | | | | 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-11 | | 30-Sep-10 |
| | | | | | | | | |
| Tenant improvements | | $ | 10,813 | | | $ | 5,872 | |
| Deferred leasing costs | | | 6,710 | | | | 7,894 | |
| Building improvements | | | 2,079 | | | | 1,549 | |
| | | $ | 19,602 | | | $ | 15,315 | |
| Square foot & leased percentages | September 30, | December 31, |
| | | 2011 | | 2010 |
| | | | | |
| Owned portfolio of commercial real estate | | | |
| | Number of properties (1) | 35 | | 33 |
| | Square feet | 6,929,891 | | 6,422,357 |
| | Leased percentage | 88% | | 86% |
| | | | | |
| Investments in non-consolidated REITs | | | |
| | Number of properties | 3 | | 3 |
| | Square feet | 1,998,575 | | 1,995,913 |
| | Leased percentage | 83% | | 77% |
| | | | | |
| Single Asset REITs (SARs) managed | | | |
| | Number of properties | 13 | | 12 |
| | Square feet | 3,322,638 | | 2,915,896 |
| | Leased percentage | 80% | | 75% |
| | | | | |
| Total owned, investments & managed properties | | | |
| | Number of properties | 51 | | 48 |
| | Square feet | 12,251,104 | | 11,334,166 |
| | Leased percentage | 85% | | 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-Sep-11 | Held |
| FSP 303 East Wacker Drive Corp. | Chicago | IL | 844,953 | 94.0% | 43.7% |
| FSP Grand Boulevard Corp. | Kansas City | MO | 533,999 | 79.8% | 27.0% |
| FSP Phoenix Tower Corp. | Houston | TX | 619,623 | 72.2% | 4.6% |
| | | | 1,998,575 | 83.4% | |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F: Quarterly Information
(Unaudited)
| (in 000's) | | | | | | | | |
| | | Q3 | | Q4 | | Q1 | | Q2 |
| Revenue: | | 2010 | | 2010 | | 2011 | | 2011 |
| Rental | | $ | 29,222 | | | $ | 29,782 | | | $ | 31,100 | | | $ | 33,605 | |
| Related party revenue: | | | | | | | | | | | | | | | | |
| Syndication fees | | | 20 | | | | 1,862 | | | | 517 | | | | 2,973 | |
| Transaction fees | | | 246 | | | | 1,582 | | | | 691 | | | | 2,685 | |
| Management fees and | | | | | | | | | | | | | | | | |
| interest income from loans | | | 630 | | | | 719 | | | | 808 | | | | 1,150 | |
| Other | | | 20 | | | | 54 | | | | 6 | | | | 7 | |
| Total revenue | | | 30,138 | | | | 33,999 | | | | 33,122 | | | | 40,420 | |
| | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | |
| Real estate operating expenses | | | 8,714 | | | | 9,602 | | | | 8,730 | | | | 8,765 | |
| Real estate taxes and insurance | | | 4,636 | | | | 4,430 | | | | 4,759 | | | | 5,228 | |
| Depreciation and amortization | | | 9,655 | | | | 9,729 | | | | 10,783 | | | | 12,067 | |
| Selling, general and administrative | | | 2,074 | | | | 2,482 | | | | 2,368 | | | | 2,396 | |
| Commissions | | | 16 | | | | 1,011 | | | | 288 | | | | 1,555 | |
| Interest | | | 1,892 | | | | 2,004 | | | | 2,408 | | | | 3,578 | |
| Total expenses | | | 26,987 | | | | 29,258 | | | | 29,336 | | | | 33,589 | |
| | | | | | | | | | | | | | | | | |
| Income before interest income, equity | | | | | | | | | | | | | | | | |
| in earnings in non-consolidated REITs | | | 3,151 | | | | 4,741 | | | | 3,786 | | | | 6,831 | |
| Interest income | | | 4 | | | | 4 | | | | 11 | | | | 9 | |
| Equity in earnings in non-consolidated REITs | | | 404 | | | | 229 | | | | 968 | | | | 1,166 | |
| | | | | | | | | | | | | | | | | |
| Income before taxes on income | | | 3,559 | | | | 4,974 | | | | 4,765 | | | | 8,006 | |
| Taxes on income | | | (37 | ) | | | 317 | | | | 50 | | | | 68 | |
| | | | | | | | | | | | | | | | | |
| Income from continuing operations | | | 3,596 | | | | 4,657 | | | | 4,715 | | | | 7,938 | |
| Income from discontinued operations | | | 1,161 | | | | 1,163 | | | | 459 | | | | 97 | |
| | | | | | | | | | | | | | | | | |
| Income before gain on sale of properties | | | 4,757 | | | | 5,820 | | | | 5,174 | | | | 8,035 | |
| Gain on sale of assets | | | — | | | | — | | | | 19,593 | | | | 2,346 | |
| Net income | | $ | 4,757 | | | $ | 5,820 | | | $ | 24,767 | | | $ | 10,381 | |
| | | | | | | | | | | | | | | | | |
| FFO and FFO+GOS calculations: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 4,757 | | | $ | 5,820 | | | $ | 24,767 | | | $ | 10,381 | |
| (Gain) Loss on sale of assets | | | — | | | | — | | | | (19,593 | ) | | | (2,346 | ) |
| GAAP income from non-consolidated REITs | | | (404 | ) | | | (153 | ) | | | (1,772 | ) | | | (1,166 | ) |
| Distributions from non-consolidated REITs | | | 1,192 | | | | 1,247 | | | | 1,767 | | | | 1,215 | |
| Acquisition costs of new properties | | | (4 | ) | | | — | | | | 269 | | | | 9 | |
| Depreciation of real estate and intangible amortization | | | 10,510 | | | | 10,605 | | | | 10,812 | | | | 12,047 | |
| Funds From Operations (FFO) | | | 16,051 | | | | 17,519 | | | | 16,250 | | | | 20,140 | |
| Plus gains on sales of assets | | | — | | | | — | | | | 19,593 | | | | 2,346 | |
| FFO+GOS | | $ | 16,051 | | | $ | 17,519 | | | $ | 35,843 | | | $ | 22,486 | |
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Percentage of Leased Space
(Unaudited & Estimated)
| | | | | | | Second | | Third |
| | | | | | % Leased (1) | Quarter | % Leased (1) | Quarter |
| | | | | Square | as of | Average % | as of | Average % |
| | Property Name | Location | | Feet | 30-Jun-11 | Leased (2) | 30-Sep-11 | Leased (2) |
| | | | | | | | | |
| 1 | PARK SENECA | Charlotte, NC | | 109,550 | 80.1% | 79.1% | 80.9% | 80.5% |
| 2 | HILLVIEW CENTER | Milpitas, CA | | 36,288 | 100.0% | 100.0% | 100.0% | 100.0% |
| 3 | SOUTHFIELD | Southfield, MI | | 214,697 | 39.2% | 41.7% | 39.2% | 39.2% |
| 4 | FOREST PARK | Charlotte, NC | | 62,212 | 100.0% | 85.0% | 100.0% | 100.0% |
| 5 | CENTENNIAL | Colorado Springs, CO | | 110,730 | 66.9% | 66.9% | 66.9% | 66.9% |
| 6 | MEADOW POINT | Chantilly, VA | | 138,537 | 100.0% | 100.0% | 100.0% | 100.0% |
| 7 | TIMBERLAKE | Chesterfield, MO | | 232,766 | 97.7% | 97.7% | 97.7% | 97.7% |
| 8 | FEDERAL WAY | Federal Way, WA | | 117,010 | 42.0% | 42.0% | 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% | 85.9% | 90.6% |
| 11 | PARK TEN | Houston, TX | | 155,715 | 98.8% | 98.8% | 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 | 79.7% | 79.3% | 88.4% | 88.4% |
| 15 | GREENWOOD PLAZA | Englewood, CO | | 197,527 | 54.3% | 58.2% | 54.3% | 54.3% |
| 16 | RIVER CROSSING | Indianapolis, IN | | 205,059 | 93.5% | 93.4% | 93.5% | 93.5% |
| 17 | LIBERTY PLAZA | Addison, TX | | 218,934 | 75.6% | 75.6% | 68.6% | 68.0% |
| 18 | INNSBROOK | Glen Allen, VA | | 298,692 | 63.7% | 67.3% | 86.8% | 78.8% |
| 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 | 83.1% | 76.8% | 83.1% | 83.1% |
| 23 | ONE OVERTON PARK | Atlanta, GA | | 387,267 | 91.1% | 91.5% | 90.4% | 90.6% |
| 24 | 390 INTERLOCKEN | Broomfield, CO | | 241,516 | 95.9% | 95.9% | 96.6% | 96.9% |
| 25 | EAST BALTIMORE | Baltimore, MD | | 325,445 | 55.7% | 55.5% | 55.7% | 55.7% |
| 26 | PARK TEN PHASE II | Houston, TX | | 156,746 | 100.0% | 100.0% | 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 | | 472,178 | 92.5% | 92.1% | 93.6% | 93.1% |
| 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 | 100.0% | 94.6% | 100.0% | 100.0% |
| 35 | 909 DAVIS | Evanston, IL | | 195,245 | n/a | n/a | 94.8% | 94.8% |
| | TOTAL WEIGHTED AVERAGE (3) | | 6,929,891 | 86.9% | 86.9% | 88.1% | 87.7% |
| | | | | | | | | |
| (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) Second Quarter totals include Bollman Place (98,745 sf) located Maryland, which sold in June. |
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 September 30, 2011 | | | | |
| | | | | % of |
| Tenant | | Sq Ft | SIC Code | Portfolio |
| TCF National Bank | | 267,470 | 60 | 3.9% |
| Quintiles Transnational Corp | | 259,531 | 87 | 3.7% |
| CITGO Petroleum Corporation | | 248,399 | 29 | 3.6% |
| Burger King Corporation | | 212,619 | 58 | 3.1% |
| Denbury Onshore LLC | | 202,600 | 13 | 2.9% |
| RGA Reinsurance Company | | 185,501 | 63 | 2.7% |
| Citicorp Credit Services, Inc | | 176,848 | 61 | 2.5% |
| C.H. Robinson Worldwide, Inc | | 153,028 | 47 | 2.2% |
| SunTrust Bank | | 150,142 | 60 | 2.2% |
| Houghton Mifflin Harcourt Publishing Company | | 150,050 | 27 | 2.2% |
| Murphy Exploration & Production Company | | 144,677 | 13 | 2.1% |
| Giesecke & Devrient America, Inc. | | 135,888 | 73 | 2.0% |
| Monsanto Company | | 127,778 | 28 | 1.8% |
| Vail Holdings, Inc. | | 125,313 | 79 | 1.8% |
| Argo Data Resource Corporation | | 111,687 | 73 | 1.6% |
| Northrop Grumman Systems Corporation | | 111,469 | 73 | 1.6% |
| Alliance Data Systems | | 96,749 | 73 | 1.4% |
| Federal National Mortgage Association | | 92,358 | 61 | 1.3% |
| Amdocs, Inc | | 91,928 | 73 | 1.3% |
| County of Santa Clara | | 90,467 | 91 | 1.3% |
| Total | | 3,134,502 | | 45.2% |
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”), because management believes that FFO represents the most accurate measure of the reportable segment’s activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (determined in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs.
FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs. Other real estate companies and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.
