Exhibit 99.2
GOVERNMENT PROPERTIES
INCOME TRUST
Second Quarter 2010
Supplemental Operating and Financial Data
All amounts in this report are unaudited.
TABLE OF CONTENTS
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| Page |
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CORPORATE INFORMATION |
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Company Profile |
| 5 |
Investor Information |
| 6 |
Research Coverage |
| 7 |
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FINANCIAL INFORMATION |
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Key Financial Data |
| 9 |
Consolidated Balance Sheets |
| 10 |
Consolidated Statements of Income |
| 11 |
Consolidated Statements of Cash Flows |
| 12 |
Calculation of EBITDA |
| 13 |
Calculation and Reconciliation of Property Net Operating Income (NOI) |
| 14 |
Calculation of Funds from Operations (FFO) |
| 15 |
Same Property Results |
| 16 |
Debt Summary |
| 17 |
Debt Maturity Schedule |
| 18 |
Leverage Ratios and Coverage Ratios |
| 19 |
Tenant Improvements, Leasing Costs and Capital Improvements |
| 20 |
2010 Acquisitions Information |
| 21 |
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PROPERTY AND LEASING INFORMATION |
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Property Schedule |
| 23 |
Tenant List |
| 24 |
Occupancy and Leasing Summary |
| 25 |
Lease Expiration Schedule |
| 26 |
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WARNING REGARDING
FORWARD LOOKING STATEMENTS
THIS SUPPLEMENTAL OPERATING AND FINANCIAL DATA CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:
· OUR ABILITY TO PAY DISTRIBUTIONS IN THE FUTURE AND THE EXPECTED AMOUNTS THEREOF,
· OUR ACQUISITION AND SALE OF PROPERTIES,
· THE CREDIT QUALITY OF OUR TENANTS,
· THE LIKELIHOOD THAT OUR TENANTS WILL PAY RENT, RENEW LEASES, SIGN NEW LEASES OR BE AFFECTED BY CYCLICAL ECONOMIC CONDITIONS,
· OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,
· OUR POLICIES AND PLANS REGARDING INVESTMENTS AND FINANCINGS,
· THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR SECURED REVOLVING CREDIT FACILITY,
· OUR ABILITY TO COMPETE FOR ACQUISITIONS AND TENANCIES EFFECTIVELY,
· �� OUR TAX STATUS AS A REAL ESTATE INVESTMENT TRUST, OR REIT,
· OUR ABILITY TO RAISE EQUITY OR DEBT CAPITAL,
· OUR EXPECTATION THAT WE WILL BENEFIT FINANCIALLY BY PARTICIPATING IN AIC WITH OUR MANAGER, REIT MANAGEMENT & RESEARCH LLC, OR RMR, AND COMPANIES TO WHICH RMR PROVIDES MANAGEMENT SERVICES, AND
· OTHER MATTERS.
OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FORWARD LOOKING STATEMENTS AND UPON OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION, FUNDS FROM OPERATIONS, CASH AVAILABLE FOR DISTRIBUTION, CASH FLOWS, LIQUIDITY AND PROSPECTS INCLUDE, BUT ARE NOT LIMITED TO:
· THE IMPACT OF CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS,
· COMPETITION WITHIN THE REAL ESTATE INDUSTRY,
· ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR MANAGING TRUSTEES, CWH, AND RMR AND THEIR AFFILIATES,
· COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS, AND
· LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY AS A REAL ESTATE INVESTMENT TRUST FOR U.S. FEDERAL INCOME TAX PURPOSES.
FOR EXAMPLE:
· IF THE AVAILABILITY OF DEBT CAPITAL BECOMES RESTRICTED, WE MAY BE UNABLE TO REFINANCE OR REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE OR TO REFINANCE ON TERMS WHICH ARE AS FAVORABLE AS WE NOW HAVE,
· CONTINGENCIES IN OUR ACQUISITIONS MAY CAUSE THESE TRANSACTIONS NOT TO OCCUR OR TO BE DELAYED,
· OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS DEPENDS UPON A NUMBER OF FACTORS, INCLUDING OUR FUTURE EARNINGS. WE MAY BE UNABLE TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS AND FUTURE DISTRIBUTIONS MAY BE SUSPENDED OR PAID AT A LESSER RATE THAN THE DISTRIBUTIONS WE NOW PAY,
· OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES AND LEASE THEM FOR RENTS, LESS PROPERTY OPERATING EXPENSES, WHICH EXCEED OUR CAPITAL COSTS. WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES, ACQUISITION FINANCING OR LEASE TERMS FOR NEW PROPERTIES,
· RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE, AND
· OUR PARTICIPATION IN AIC INVOLVES POTENTIAL FINANCIAL RISKS AND REWARDS TYPICAL OF ANY START UP BUSINESS VENTURE AS WELL AS OTHER FINANCIAL RISKS AND REWARDS SPECIFIC TO INSURANCE COMPANIES. ACCORDINGLY, OUR EXPECTED FINANCIAL BENEFITS FROM OUR INITIAL OR FUTURE INVESTMENTS IN AIC MAY BE DELAYED OR MAY NOT OCCUR.
THESE RESULTS COULD OCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH ARE BEYOND OUR CONTROL, SUCH AS GOVERNMENT TENANTS’ NEEDS FOR LEASED SPACE, OR CHANGES IN THE CAPITAL MARKETS OR THE ECONOMY GENERALLY.
THE INFORMATION CONTAINED ELSEWERE IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2009, OR OUR ANNUAL REPORT, AND SUBSEQUENT DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IDENTIFIES OTHER FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING STATEMENTS. ALSO, OTHER FACTORS THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN OUR FORWARD LOOKING STATEMENTS ARE DESCRIBED MORE FULLY UNDER "RISK FACTORS" IN OUR ANNUAL REPORT.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
CORPORATE INFORMATION
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
COMPANY PROFILE |
The Company:
Government Properties Income Trust, or GOV, we or us, is a real estate investment trust, or REIT, which owns buildings majority leased to government tenants located throughout the United States. The majority of our properties are commercial office buildings. As of June 30, 2010, we owned 41 properties with approximately 4.9 million square feet. Thirty four properties are primarily leased to the U.S. Government and seven are leased to the state governments of California, Maryland, Massachusetts, Minnesota and South Carolina. GOV was formed in February 2009 and became a public company on June 8, 2009. We are included in the Russell 2000® stock index and the MSCI US REIT index.
Strategy:
Our primary business strategy is to maintain our properties, seek to renew our leases as they expire, selectively acquire additional properties that are majority leased to government tenants and to pay distributions to shareholders. As current leases expire, we will attempt to renew our leases with our existing tenants or enter into leases with new tenants, in both circumstances at rents which are equal to or greater than the rents we now receive. Our ability to renew leases with our existing tenants or to enter into new leases with new tenants and the rents we are able to charge will be dependent in large part upon market conditions which are generally beyond our control. Although we sometimes may sell properties, we generally consider ourselves to be a long term investor and are more interested in the long term earnings potential of our properties than selling properties for short term gains. We currently do not have any investments in off balance sheet entities.
Management:
GOV is managed by Reit Management & Research LLC, or RMR. RMR is a real estate management company which was founded in 1986 to manage public investments in real estate. As of June 30, 2010, RMR managed one of the largest portfolios of publicly owned real estate in the North America, including 1,370 properties, located in 45 states, Washington, DC, Puerto Rico and Ontario, Canada. RMR has more than 600 employees in its headquarters and regional offices located throughout the country. In addition to managing GOV, RMR also manages CommonWealth REIT, or CWH, a publicly traded REIT that owns office and industrial properties, Hospitality Properties Trust, or HPT, a publicly traded REIT that owns hotels and travel centers, and Senior Housing Properties Trust, or SNH, a publicly traded REIT that primarily owns senior living and healthcare properties. RMR also provides management services to Five Star Quality Care, Inc., a healthcare services company which is a tenant of SNH, and to Travel Centers of America, LLC, an operator of travel centers which is a tenant of HPT. An affiliate of RMR, RMR Advisors, Inc., is the investment manager of publicly offered mutual funds, which principally invest in securities of unaffiliated real estate companies. The public companies managed by RMR and its affiliates had combined total gross assets of over $17.5 billion as of June 30, 2010. We believe that being managed by RMR is a competitive advantage for GOV because RMR provides us with a depth and quality of management and experience which may be unequaled in the real estate industry. We also believe RMR provides management services to GOV at costs that are lower than we otherwise would have to pay for similar quality services.
Corporate Headquarters:
400 Centre Street
Newton, MA 02458
(t) (617) 219-1440
(f) (617) 796-8267
Stock Exchange Listing:
New York Stock Exchange
Trading Symbols:
Common Shares — GOV
Portfolio Data (as of 6/30/10):
Total properties |
| 41 |
|
Total sq. ft. (000s) |
| 4,905 |
|
Percent leased |
| 99.7 | % |
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
INVESTOR INFORMATION |
Board of Trustees |
Barry M. Portnoy |
| Adam D. Portnoy |
Managing Trustee |
| Managing Trustee |
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John L. Harrington |
| Jeffrey P. Somers |
Independent Trustee |
| Independent Trustee |
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Barbara D. Gilmore |
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Independent Trustee |
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Senior Management |
Adam D. Portnoy |
| David M. Blackman |
President |
| Treasurer & Chief Financial Officer |
Contact Information |
Investor Relations 400 Centre Street Newton, MA 02458 (t) (617) 219-1410 (f) (617) 796-8267 (e-mail) info@govreit.com (website) www.govreit.com |
| Inquiries Financial inquiries should be directed to David M. Blackman, Treasurer and Chief Financial Officer, at (617) 219-1440 or dblackman@govreit.com.
Investor and media inquiries should be directed to Timothy A. Bonang, Vice President, Investor Relations, at (617) 796-8222 or tbonang@govreit.com, or Elisabeth Heiss, Manager, Investor Relations, at (617) 796-8222 or eheiss@govreit.com. |
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
RESEARCH COVERAGE |
Equity Research Coverage |
Banc of America Merrill Lynch Research |
| Jefferies & Company, Inc. |
James Feldman |
| Omotayo Okusanya |
(212) 449-6255 |
| (212) 336-7076 |
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RBC Capital Markets |
| Wells Fargo Securities |
David Rodgers |
| Brendan Maiorana |
(440) 715-2647 |
| (443) 263-6516 |
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GOV is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding GOV’s performance made by these analysts do not represent opinions, forecasts or predictions of GOV or its management. GOV does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts.
FINANCIAL INFORMATION
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
KEY FINANCIAL DATA (1) |
(amounts in thousands, except per share data)
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| As of and For the Three Months Ended |
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| 6/30/2010 |
| 3/31/2010 |
| 12/31/2009 |
| 9/30/2009 |
| 6/30/2009 |
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Shares Outstanding: |
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Common shares outstanding (at end of period) |
| 31,264 |
| 31,256 |
| 21,481 |
| 21,481 |
| 21,450 |
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Weighted average common shares outstanding (2) |
| 31,261 |
| 29,084 |
| 21,481 |
| 21,455 |
| 12,384 |
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Common Share Data: |
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Price at end of period |
| $ | 25.52 |
| $ | 26.01 |
| $ | 22.98 |
| $ | 24.01 |
| $ | 20.53 |
|
High during period |
| $ | 28.40 |
| $ | 26.01 |
| $ | 25.50 |
| $ | 24.35 |
| $ | 20.53 |
|
Low during period |
| $ | 23.95 |
| $ | 21.64 |
| $ | 21.79 |
| $ | 18.76 |
| $ | 17.76 |
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Selected Balance Sheet Data: |
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Total assets |
| $ | 686,278 |
| $ | 606,549 |
| $ | 514,813 |
| $ | 438,867 |
| $ | 412,023 |
|
Total liabilities |
| $ | 132,898 |
| $ | 48,385 |
| $ | 162,763 |
| $ | 72,895 |
| $ | 52,420 |
|
Gross book value of real estate assets (3) |
| $ | 779,215 |
| $ | 666,931 |
| $ | 594,320 |
| $ | 521,273 |
| $ | 502,696 |
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Total debt / gross book value of real estate (3) |
| 15.1 | % | 5.4 | % | 24.3 | % | 12.5 | % | 8.7 | % | |||||
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Book Capitalization: |
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Total debt |
| $ | 117,944 |
| $ | 36,126 |
| $ | 144,375 |
| $ | 65,375 |
| $ | 43,875 |
|
Plus: total stockholders’ equity |
| 553,380 |
| 558,164 |
| 352,050 |
| 365,972 |
| 359,603 |
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Total book capitalization |
| $ | 671,324 |
| $ | 594,290 |
| $ | 496,425 |
| $ | 431,347 |
| $ | 403,478 |
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Total debt / total book capitalization |
| 17.6 | % | 6.1 | % | 29.1 | % | 15.2 | % | 10.9 | % | |||||
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Market Capitalization: |
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Total debt (book value) |
| $ | 117,944 |
| $ | 36,126 |
| $ | 144,375 |
| $ | 65,375 |
| $ | 43,875 |
|
Plus: market value of common shares (at end of period) |
| 797,857 |
| 812,969 |
| 493,633 |
| 515,759 |
| 440,369 |
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Total market capitalization |
| $ | 915,801 |
| $ | 849,095 |
| $ | 638,008 |
| $ | 581,134 |
| $ | 484,244 |
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Total debt / total market capitalization |
| 12.9 | % | 4.3 | % | 22.6 | % | 11.2 | % | 9.1 | % | |||||
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Selected Income Statement Data: |
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Rental income |
| $ | 25,940 |
| $ | 23,355 |
| $ | 20,654 |
| $ | 19,656 |
| $ | 19,405 |
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EBITDA (4) |
| $ | 14,839 |
| $ | 13,279 |
| $ | 11,122 |
| $ | 11,485 |
| $ | 12,026 |
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Property net operating income (NOI) (5) |
| $ | 17,480 |
| $ | 15,553 |
| $ | 13,243 |
| $ | 12,937 |
| $ | 12,857 |
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NOI margin (6) |
| 67.4 | % | 66.6 | % | 64.1 | % | 65.8 | % | 66.3 | % | |||||
Net income |
| $ | 7,735 |
| $ | 6,851 |
| $ | 5,415 |
| $ | 6,185 |
| $ | 5,869 |
|
Funds from operations (FFO) (7) |
| $ | 14,147 |
| $ | 12,575 |
| $ | 10,223 |
| $ | 10,220 |
| $ | 9,666 |
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Per Share Data (2): |
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Net income |
| $ | 0.25 |
| $ | 0.24 |
| $ | 0.25 |
| $ | 0.29 |
| $ | 0.47 |
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FFO (7) |
| $ | 0.45 |
| $ | 0.43 |
| $ | 0.48 |
| $ | 0.48 |
| $ | 0.78 |
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Coverage Ratios: |
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EBITDA (4) / interest expense |
| 8.8 | x | 8.7 | x | 6.5 | x | 7.8 | x | 5.1 | x |
(1) GOV became a public company on June 8, 2009.
(2) GOV was formed in February 2009 and completed its initial public offering, or IPO, of common shares in June 2009. We have no outstanding share equivalents, such as units, convertible debt or stock options. Prior to completion of its IPO on June 8, 2009, GOV did not have any publicly traded outstanding common shares. If the IPO had been completed on January 1, 2009, GOV’s weighted average common shares outstanding for the quarter and six months ended June 30, 2009 would have been 21,450,000.
(3) Gross book value of real estate assets is real estate properties, at cost, including purchase price allocations less impairment writedowns, if any.
(4) See page 13 for calculation of EBITDA.
(5) Property net operating income, or NOI, is defined as rental income from real estate less property operating expenses; see page 14 for calculation of NOI and reconciliation of NOI to net income.
(6) NOI margin is defined as NOI as a percentage of rental income.
(7) See page 15 for calculation of funds from operations, or FFO, and FFO per share.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
CONSOLIDATED BALANCE SHEETS |
(amounts in thousands, except share data) |
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| As of |
| As of |
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| 6/30/2010 |
| 12/31/2009 |
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ASSETS |
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Real estate properties: |
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Land |
| $ | 85,909 |
| $ | 74,009 |
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Buildings and improvements |
| 653,731 |
| 502,748 |
| ||
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| 739,640 |
| 576,757 |
| ||
Accumulated depreciation |
| (121,566 | ) | (113,027 | ) | ||
|
| 618,074 |
| 463,730 |
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Acquired real estate leases, net |
| 39,212 |
| 15,310 |
| ||
Cash and cash equivalents |
| 1,023 |
| 1,478 |
| ||
Restricted cash |
| 1,000 |
| — |
| ||
Rents receivable |
| 14,860 |
| 13,544 |
| ||
Deferred leasing costs, net |
| 1,161 |
| 1,330 |
| ||
Deferred financing costs, net |
| 4,996 |
| 5,204 |
| ||
Due from affiliates |
| 336 |
| 103 |
| ||
Other assets, net |
| 5,616 |
| 14,114 |
| ||
Total assets |
| $ | 686,278 |
| $ | 514,813 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Mortgage notes payable |
| $ | 35,944 |
| $ | — |
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Secured revolving credit facility |
| 82,000 |
| 144,375 |
| ||
Accounts payable and accrued expenses |
| 8,116 |
| 13,985 |
| ||
Due to affiliates |
| 1,063 |
| 837 |
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Acquired real estate lease obligations, net |
| 5,775 |
| 3,566 |
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Total liabilities |
| 132,898 |
| 162,763 |
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Commitments and contingencies |
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Shareholders’ equity: |
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Common shares of beneficial interest, $0.01 par value: 31,263,850 and 21,481,350 shares issued and outstanding, respectively |
| 313 |
| 215 |
| ||
Additional paid in capital |
| 556,776 |
| 357,627 |
| ||
Cumulative net income |
| 28,127 |
| 13,541 |
| ||
Cumulative common distributions |
| (31,836 | ) | (19,333 | ) | ||
Total shareholders’ equity |
| 553,380 |
| 352,050 |
| ||
Total liabilities and shareholders’ equity |
| $ | 686,278 |
| $ | 514,813 |
|
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
CONSOLIDATED STATEMENTS OF INCOME |
(amounts in thousands, except per share data) |
|
| For the Three Months Ended |
| For the Six Months Ended |
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| 6/30/2010 |
| 6/30/2009 |
| 6/30/2010 |
| 6/30/2009 |
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Rental income (1) |
| $ | 25,940 |
| $ | 19,405 |
| $ | 49,295 |
| $ | 38,648 |
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Expenses: |
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Real estate taxes |
| 2,764 |
| 2,113 |
| 5,332 |
| 4,219 |
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Utility expenses |
| 1,733 |
| 1,523 |
| 3,410 |
| 3,044 |
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Other operating expenses |
| 3,963 |
| 2,912 |
| 7,520 |
| 5,711 |
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Depreciation and amortization |
| 5,401 |
| 3,797 |
| 10,281 |
| 7,361 |
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Acquisition costs |
| 1,011 |
| — |
| 1,855 |
| — |
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General and administrative |
| 1,623 |
| 873 |
| 3,076 |
| 1,613 |
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Total expenses |
| 16,495 |
| 11,218 |
| 31,474 |
| 21,948 |
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Operating income |
| 9,445 |
| 8,187 |
| 17,821 |
| 16,700 |
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Interest and other income (expense), net |
| (7 | ) | 42 |
| 16 |
| 44 |
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Interest expense (including net amortization of debt premiums and deferred financing fees of $624, $427, $1,156 and $427, respectively) |
| (1,678 | ) | (2,360 | ) | (3,209 | ) | (2,360 | ) | ||||
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Income before income tax expense |
| 7,760 |
| 5,869 |
| 14,628 |
| 14,384 |
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Income tax expense |
| (25 | ) | — |
| (42 | ) | — |
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Net income |
| $ | 7,735 |
| $ | 5,869 |
| $ | 14,586 |
| $ | 14,384 |
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Weighted average common shares outstanding (2) |
| 31,261 |
| 12,384 |
| 30,178 |
| 8,590 |
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Earnings per common share (2): |
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Net income |
| $ | 0.25 |
| $ | 0.47 |
| $ | 0.48 |
| $ | 1.67 |
|
|
|
|
|
|
|
|
|
|
| ||||
Additional Data: |
|
|
|
|
|
|
|
|
| ||||
General and administrative expenses / rental income |
| 6.26 | % | 4.50 | % | 6.24 | % | 4.17 | % | ||||
General and administrative expenses / total assets (at end of period) |
| 0.24 | % | 0.21 | % | 0.45 | % | 0.39 | % | ||||
|
|
|
|
|
|
|
|
|
| ||||
Non cash straight line rent adjustments (1) |
| $ | (59 | ) | $ | (109 | ) | $ | (124 | ) | $ | (225 | ) |
Lease value amortization (1) |
| $ | 14 |
| $ | 85 |
| $ | 48 |
| $ | 170 |
|
Lease termination fees included in rental income |
| $ | 57 |
| $ | — |
| $ | 57 |
| $ | — |
|
Capitalized interest expense |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
(1) We report rental income on a straight line basis over the terms of the respective leases; accordingly, rental income includes non-cash straight line rent adjustments. Rental income also includes non-cash amortization of intangible lease assets and liabilities.
(2) Prior to completion of its IPO on June 8, 2009, GOV did not have any publicly traded outstanding common shares. If the IPO had been completed on January 1, 2009, GOV’s weighted average common shares outstanding for the quarter and six months ended June 30, 2009 would have been 21,450.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(amounts in thousands) |
|
| For the Six Months Ended |
| ||||
|
| 6/30/2010 |
| 6/30/2009 |
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
Net income |
| $ | 14,586 |
| $ | 14,384 |
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
| ||
Depreciation and amortization |
| 11,389 |
| 7,617 |
| ||
Share based compensation expense |
| 217 |
| — |
| ||
Equity in loss of equity investment |
| 52 |
| — |
| ||
Change in assets and liabilities: |
|
|
|
|
| ||
(Increase) decrease in restricted cash |
| (1,000 | ) | 1,334 |
| ||
(Increase) decrease in deferred leasing costs |
| (47 | ) | — |
| ||
(Increase) decrease in rents receivable |
| (1,316 | ) | (326 | ) | ||
(Increase) decrease in due from affiliates |
| (233 | ) | — |
| ||
(Increase) decrease in other assets |
| 8,490 |
| (196 | ) | ||
Increase (decrease) in accounts payable and accrued expenses |
| 2,744 |
| (1,072 | ) | ||
Increase (decrease) in due to affiliates |
| 226 |
| (1,343 | ) | ||
Cash provided by operating activities |
| 35,108 |
| 20,398 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Real estate acquisitions and improvements |
| (149,817 | ) | (1,176 | ) | ||
Investment in Affiliates Insurance Company |
| (44 | ) | — |
| ||
Cash used in investing activities |
| (149,861 | ) | (1,176 | ) | ||
|
|
|
|
|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Proceeds from issuance of common stock, net |
| 199,030 |
| 209,389 |
| ||
Repayment of mortgage loans |
| (242 | ) | (134 | ) | ||
Borrowings on secured revolving credit facility |
| 104,000 |
| 272,000 |
| ||
Payments on secured revolving credit facility |
| (166,375 | ) | (228,125 | ) | ||
Financing fees |
| (1,019 | ) | (6,235 | ) | ||
Distributions to common shareholders |
| (21,096 | ) | — |
| ||
Equity distributions |
| — |
| (265,763 | ) | ||
Cash provided by (used in) financing activities |
| 114,298 |
| (18,868 | ) | ||
|
|
|
|
|
| ||
(Decrease) increase in cash and cash equivalents |
| (455 | ) | 354 |
| ||
Cash and cash equivalents at beginning of period |
| 1,478 |
| 97 |
| ||
Cash and cash equivalents at end of period |
| $ | 1,023 |
| $ | 451 |
|
|
|
|
|
|
| ||
Supplemental cash flow information: |
|
|
|
|
| ||
Interest paid |
| $ | 1,870 |
| $ | 1,932 |
|
|
|
|
|
|
| ||
Non-cash operating activities |
|
|
|
|
| ||
Equity distributions |
| $ | — |
| $ | 8,047 |
|
|
|
|
|
|
| ||
Non-cash investing activities |
|
|
|
|
| ||
Assumption of mortgage debt in connection with real estate acquisitions |
| $ | (35,196 | ) | $ | — |
|
|
|
|
|
|
| ||
Non-cash financing activities |
|
|
|
|
| ||
Mortgage debt assumed |
| $ | 35,196 |
| $ | — |
|
Costs of establishing credit facility |
| — |
| 650 |
| ||
Costs for issuance of common shares |
| — |
| 3,813 |
|
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
CALCULATION OF EBITDA |
(amounts in thousands) |
|
| For the Three Months Ended |
| For the Six Months Ended |
| ||||||||
|
| 6/30/2010 |
| 6/30/2009 |
| 6/30/2010 |
| 6/30/2009 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 7,735 |
| $ | 5,869 |
| $ | 14,586 |
| $ | 14,384 |
|
Plus: interest expense |
| 1,678 |
| 2,360 |
| 3,209 |
| 2,360 |
| ||||
Plus: income tax expense |
| 25 |
| — |
| 42 |
| — |
| ||||
Plus: depreciation and amortization |
| 5,401 |
| 3,797 |
| 10,281 |
| 7,361 |
| ||||
EBITDA |
| $ | 14,839 |
| $ | 12,026 |
| $ | 28,118 |
| $ | 24,105 |
|
We compute EBITDA, or earnings before interest, taxes, depreciation and amortization, as net income plus interest expense, income tax expense, if any, and depreciation and amortization. We consider EBITDA to be an appropriate measure of our performance, along with net income and cash flow from operating, investing and financing activities. We believe EBITDA provides useful information to investors because by excluding the effects of certain historical costs, such as interest expense and depreciation and amortization expense, EBITDA can facilitate a comparison of our current operating performance with our past operating performance and of operating performances among REITs. EBITDA does not represent cash generated by operating activities in accordance with U.S. generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. Also, other companies may calculate EBITDA differently than us.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
CALCULATION AND RECONCILIATION OF PROPERTY NET OPERATING INCOME (NOI) |
(amounts in thousands) |
|
| For the Three Months Ended |
| For the Six Months Ended |
| ||||||||
|
| 6/30/2010 |
| 6/30/2009 |
| 6/30/2010 |
| 6/30/2009 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Calculation of NOI: |
|
|
|
|
|
|
|
|
| ||||
Rental income (1) |
| $ | 25,940 |
| $ | 19,405 |
| $ | 49,295 |
| $ | 38,648 |
|
Operating expenses |
| (8,460 | ) | (6,548 | ) | (16,262 | ) | (12,974 | ) | ||||
Property net operating income (NOI) |
| $ | 17,480 |
| $ | 12,857 |
| $ | 33,033 |
| $ | 25,674 |
|
|
|
|
|
|
|
|
|
|
| ||||
Reconciliation of NOI to Net Income: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Property net operating income (NOI) |
| $ | 17,480 |
| $ | 12,857 |
| $ | 33,033 |
| $ | 25,674 |
|
Depreciation and amortization |
| (5,401 | ) | (3,797 | ) | (10,281 | ) | (7,361 | ) | ||||
Acquisition costs |
| (1,011 | ) | — |
| (1,855 | ) | — |
| ||||
General and administrative |
| (1,623 | ) | (873 | ) | (3,076 | ) | (1,613 | ) | ||||
Operating income |
| 9,445 |
| 8,187 |
| 17,821 |
| 16,700 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest and other income (expense), net |
| (7 | ) | 42 |
| 16 |
| 44 |
| ||||
Interest expense |
| (1,678 | ) | (2,360 | ) | (3,209 | ) | (2,360 | ) | ||||
Income tax expense |
| (25 | ) | — |
| (42 | ) | — |
| ||||
Net income |
| $ | 7,735 |
| $ | 5,869 |
| $ | 14,586 |
| $ | 14,384 |
|
(1) We report rental income on a straight line basis over the terms of the respective leases; as a result, rental income includes non-cash straight line rent adjustments of approximately ($59,800) and ($109,000) for the three months ended June 30, 2010 and 2009, respectively, and ($124,300) and ($225,000) for the six months ended June 30, 2010 and 2009, respectively. Rental income also includes non-cash amortization of intangible lease assets and liabilities.
We compute NOI as shown above. We consider NOI to be an appropriate supplemental measure to net income because it helps both investors and management to understand the operations of our properties. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are incurred at the property level. Our management also uses NOI to evaluate individual and company wide property level performance. The calculation of NOI excludes depreciation and amortization, acquisition costs, and general and administrative expenses from the calculation of net income in order to provide results that are more closely related to our properties’ results of operations. NOI does not represent cash generated by operating activities in accordance with GAAP, and should not be considered an alternative to net income, net income available or cash flow from operating activities as a measure of financial performance.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
CALCULATION OF FUNDS FROM OPERATIONS (FFO) |
(amounts in thousands, except per share data) |
|
| For the Three Months Ended |
| For the Six Months Ended |
| ||||||||
|
| 6/30/2010 |
| 6/30/2009 |
| 6/30/2010 |
| 6/30/2009 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 7,735 |
| $ | 5,869 |
| $ | 14,586 |
| $ | 14,384 |
|
Plus: depreciation and amortization |
| 5,401 |
| 3,797 |
| 10,281 |
| 7,361 |
| ||||
Plus: acquisition costs (1) |
| 1,011 |
| — |
| 1,855 |
| — |
| ||||
FFO available for common shareholders |
| $ | 14,147 |
| $ | 9,666 |
| $ | 26,722 |
| $ | 21,745 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding (2) |
| 31,261 |
| 12,384 |
| 30,178 |
| 8,590 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
FFO available for common shareholders per share (2) |
| $ | 0.45 |
| $ | 0.78 |
| $ | 0.89 |
| $ | 2.53 |
|
(1) Represents the closing costs associated with acquisitions that are expensed under Statement of Financial Accounting Standards No. 141 (R), “Business Combinations”.
(2) Prior to completion of its IPO on June 8, 2009, GOV did not have any publicly traded outstanding common shares. If the IPO had been completed on January 1, 2009, GOV’s weighted average common shares outstanding for the quarter and six months ended June 30, 2009 would have been 21,450.
We compute FFO as shown above. Our calculations of FFO differ from the National Association of Real Estate Investment Trusts, or NAREIT, definition because we exclude acquisition costs from the determination of FFO. We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical amounts, such as acquisition costs and depreciation expense, FFO can facilitate a comparison of operating performances by a REIT over time and among REITs. FFO does not represent cash generated by operating activities in accordance with GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders. Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving credit facility, the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance. Also, other REITs may calculate FFO differently than us.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
SAME PROPERTY RESULTS |
(dollars and sq. ft. in thousands) |
|
| For the Three Months Ended (1) |
| For the Six Months Ended (2) |
| ||||||||
|
| 6/30/2010 |
| 6/30/2009 |
| 6/30/2010 |
| 6/30/2009 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Properties |
| 29 |
| 29 |
| 29 |
| 29 |
| ||||
Total sq. ft. |
| 3,304 |
| 3,304 |
| 3,304 |
| 3,304 |
| ||||
Percent leased (3) |
| 99.9 | % | 99.3 | % | 99.9 | % | 99.6 | % | ||||
Rental income |
| $ | 19,135 |
| $ | 19,405 |
| $ | 38,170 |
| $ | 38,648 |
|
Property net operating income (NOI) (4) |
| $ | 12,559 |
| $ | 12,857 |
| $ | 25,057 |
| $ | 25,674 |
|
NOI % growth |
| -2.3 | % |
|
| -2.4 | % |
|
|
(1) Based on properties owned continuously since 4/1/2009 by us or our predecessor.
(2) Based on properties owned continuously since 1/1/2009 by us or our predecessor.
(3) Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants.
(4) Property net operating income, or NOI, is defined as property rental income less property operating expenses; see NOI and reconciliation of NOI to net income.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
DEBT SUMMARY |
(dollars in thousands) |
|
| Coupon |
| Interest |
| Principal |
| Maturity |
| Due at |
| Years to |
| ||
|
| Rate |
| Rate (1) |
| Balance (1) |
| Date |
| Maturity |
| Maturity |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Secured Fixed Rate Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Secured debt One property in Landover, MD |
| 6.21 | % | 6.21 | % | $ | 24,800 |
| 8/1/2016 |
| $ | 15,168 |
| 6.1 |
|
Secured debt One property in Lakewood, CO |
| 8.15 | % | 6.15 | % | 11,144 |
| 3/1/2021 |
| — |
| 10.7 |
| ||
Total / weighted average secured fixed rate debt |
| 6.81 | % | 6.19 | % | $ | 35,944 |
|
|
| $ | 15,168 |
| 7.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Secured Floating Rate Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Secured revolving credit facility (2) |
| 3.35 | % | 3.35 | % | $ | 82,000 |
| 4/24/2012 |
| $ | 82,000 |
| 1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Summary Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Total / weighted average secured fixed rate debt |
| 6.81 | % | 6.19 | % | $ | 35,944 |
|
|
| $ | 15,168 |
| 7.5 |
|
Total / weighted average floating rate debt |
| 3.35 | % | 3.35 | % | 82,000 |
|
|
| 82,000 |
| 1.8 |
| ||
Total / weighted average debt |
| 4.40 | % | 4.22 | % | $ | 117,944 |
|
|
| $ | 15,168 |
| 3.6 |
|
(1) Includes the effect of mark to market accounting at the assumption of the mortgages. Excludes effects of offering and transaction costs.
(2) Interest is generally set at LIBOR plus a spread which varies based upon our leverage. Subject to meeting certain conditions and payment of a fee, GOV may extend the maturity date to 4/24/2013.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
DEBT MATURITY SCHEDULE |
(dollars in thousands) |
|
| Secured |
| Secured |
|
|
| |||
|
| Fixed Rate |
| Floating |
|
|
| |||
Year |
| Debt |
| Rate Debt (1) |
| Total (2) |
| |||
|
|
|
|
|
|
|
| |||
2010 |
| $ | 302 |
| $ | — |
| $ | 302 |
|
2011 |
| 729 |
| — |
| 729 |
| |||
2012 |
| 968 |
| 82,000 |
| 82,968 |
| |||
2013 |
| 1,049 |
| — |
| 1,049 |
| |||
2014 |
| 1,132 |
| — |
| 1,132 |
| |||
2015 |
| 1,222 |
| — |
| 1,222 |
| |||
2016 |
| 24,463 |
| — |
| 24,463 |
| |||
2017 |
| 1,045 |
| — |
| 1,045 |
| |||
2018 |
| 1,133 |
| — |
| 1,133 |
| |||
2019 and thereafter |
| 2,911 |
| — |
| 2,911 |
| |||
Total |
| $ | 34,954 |
| $ | 82,000 |
| $ | 116,954 |
|
|
|
|
|
|
|
|
| |||
Percent |
| 29.9 | % | 70.1 | % | 100.0 | % |
(1) Represents amounts outstanding on GOV’s $250 million secured revolving credit facility at 6/30/2010. Subject to meeting certain conditions and payment of a fee, we may extend the maturity date to 4/24/2013.
(2) The total debt as of 6/30/2010, including unamortized premiums, was $117,944.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
LEVERAGE RATIOS AND COVERAGE RATIOS |
|
| As of and For the Three Months Ended |
| ||||||||
|
| 6/30/2010 |
| 3/31/2010 |
| 12/31/2009 |
| 9/30/2009 |
| 6/30/2009 |
|
Leverage Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt / total assets(1) |
| 17.2 | % | 6.0 | % | 28.0 | % | 14.9 | % | 10.6 | % |
Total debt / gross book value of real estate assets (2) |
| 15.1 | % | 5.4 | % | 24.3 | % | 12.5 | % | 8.7 | % |
Total debt / total market capitalization(1) |
| 12.9 | % | 4.3 | % | 22.6 | % | 11.2 | % | 9.1 | % |
Total debt / total book capitalization(1) |
| 17.6 | % | 6.1 | % | 29.1 | % | 15.2 | % | 10.9 | % |
Secured debt / total assets |
| 17.2 | % | 6.0 | % | 28.0 | % | 14.9 | % | 10.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
Coverage Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA / interest expense |
| 8.8 | x | 8.7 | x | 6.5 | x | 7.8 | x | 5.1 | x |
(1) Debt includes the effect of mark to market accounting for mortgage debts assumed at the time of certain real estate acquisitions.
(2) Gross book value of real estate assets is real estate properties, at cost, including purchase price allocations less impairment writedowns, if any.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
TENANT IMPROVEMENTS, LEASING COSTS AND CAPITAL IMPROVEMENTS |
(dollars and sq. ft. in thousands, except per sq. ft. data) |
|
| For the Three Months Ended |
| |||||||||||||
|
| 6/30/2010 |
| 3/31/2010 |
| 12/31/2009 |
| 9/30/2009 |
| 6/30/2009 |
| |||||
Tenant improvements (TI) |
| $ | 87 |
| $ | 209 |
| $ | 438 |
| $ | 224 |
| $ | 233 |
|
Leasing costs (LC) |
| 22 |
| 25 |
| 8 |
| 1 |
| — |
| |||||
Total TI and LC |
| 109 |
| 234 |
| 446 |
| 225 |
| 233 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Building improvements (1) |
| 200 |
| 33 |
| 868 |
| 154 |
| 133 |
| |||||
Development, redevelopment and other activities (2) |
| 212 |
| 13 |
| 516 |
| — |
| — |
| |||||
Total capital improvements, including TI and LC |
| $ | 521 |
| $ | 280 |
| $ | 1,830 |
| $ | 379 |
| $ | 366 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Sq. ft. beginning of period |
| 4,390 |
| 3,957 |
| 3,304 |
| 3,304 |
| 3,304 |
| |||||
Sq. ft. end of period |
| 4,905 |
| 4,390 |
| 3,957 |
| 3,626 |
| 3,304 |
| |||||
Average sq. ft. during period |
| 4,648 |
| 4,174 |
| 3,631 |
| 3,465 |
| 3,304 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Building improvements per average sq. ft. during period |
| $ | 0.04 |
| $ | 0.01 |
| $ | 0.24 |
| $ | 0.04 |
| $ | 0.04 |
|
(1) Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.
(2) Development, redevelopment and other activities generally include non-recurring expenditures or expenditures that we believe increase the value of our existing properties.
Government Properties Income Trust | ||||||||||||||||||||
Supplemental Operating and Financial Data | ||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
2010 ACQUISITIONS INFORMATION | ||||||||||||||||||||
(dollars and sq. ft. in thousands, except per sq. ft. amounts) | ||||||||||||||||||||
|
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| ||
|
|
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|
|
|
|
|
|
| Weighted |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average |
|
|
|
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| Purchase |
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| Remaining |
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Date |
|
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| Number of |
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|
| Purchase |
| Price (1) / |
| Cap |
| Lease |
| Percent |
|
| ||
Acquired |
|
|
| Properties |
| Sq. Ft. |
| Price (1) |
| Sq. Ft. |
| Rate (2) |
| Term (3) |
| Leased (4) |
| Major Tenant - Occupant | ||
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Jan-10 |
| 12795 West Alameda Parkway, Lakewood, CO |
| 1 |
| 167 |
| $ | 28,710 |
| $ | 171.92 |
| 10.2 | % | 9.7 |
| 100.0 | % | U.S. Government - National Parks Service |
Feb-10 |
| 3300 75th Avenue, Landover, MD |
| 1 |
| 266 |
| 43,650 |
| 164.10 |
| 9.0 | % | 9.5 |
| 100.0 | % | U.S. Government - Defense Intelligence Agency | ||
Apr-10 |
| 65 Bowdoin Street, Burlington, VT |
| 1 |
| 27 |
| 9,700 |
| 359.26 |
| 8.6 | % | 14.3 |
| 100.0 | % | U.S. Government - Office of Security and Integrity | ||
Apr-10 |
| 11411 Jefferson Avenue, Detroit, MI |
| 1 |
| 56 |
| 21,300 |
| 380.36 |
| 8.7 | % | 12.8 |
| 100.0 | % | U.S. Government - U.S. Citizenship & Immigration Services | ||
May-10 |
| 75 Pleasant Street, Malden, MA |
| 1 |
| 126 |
| 40,500 |
| 321.43 |
| 9.1 | % | 8.6 |
| 100.0 | % | Commonwealth of Massachusetts - Department of Education | ||
Jun-10 |
| One Montvale Avenue, Stoneham, MA |
| 1 |
| 98 |
| 14,709 |
| 150.09 |
| 8.9 | % (5) | 8.9 |
| 92.7 | % | U.S. Government - Various federal agencies | ||
Jun-10 |
| 400 State Avenue, Kansas City, KS |
| 1 |
| 171 |
| 13,112 |
| 76.68 |
| 8.9 | % (5) | 5.4 |
| 95.5 | % | U.S. Government - Various federal agencies | ||
Jun-10 |
| 744 14th Avenue, Safford, AZ |
| 1 |
| 38 |
| 12,559 |
| 330.50 |
| 8.9 | % (5) | 13.9 |
| 100.0 | % | U.S. Government - Bureau of Land Management | ||
Jul-10 |
| 3285 E. Hemisphere Loop, Tucson, AZ |
| 1 |
| 35 |
| 2,884 |
| 82.40 |
| 8.9 | % (5) | 1.6 |
| 100.0 | % | U.S. Government - Drug Enforcement Agency | ||
Jul-10 |
| 4181 Ruffin Road, San Diego, CA |
| 1 |
| 142 |
| 16,482 |
| 116.07 |
| 8.9 | % (5) | 7.8 |
| 50.0 | % | U.S. Government - Various federal agencies | ||
Jul-10 |
| 220 E. Bryan Street, Savannah, GA |
| 1 |
| 36 |
| 3,348 |
| 93.00 |
| 8.9 | % (5) | 0.9 |
| 100.0 | % | U.S. Government - Federal Bureau of Investigation | ||
Jul-10 |
| 330 South Second Avenue, Minneapolis, MN |
| 1 |
| 200 |
| 23,231 |
| 116.16 |
| 8.9 | % (5) | 3.8 |
| 53.8 | % | U.S. Government - Various federal agencies | ||
Jul-10 |
| 435 Montano Boulevard, Albuquerque, NM |
| 1 |
| 29 |
| 2,394 |
| 82.55 |
| 8.9 | % (5) | 1.3 |
| 100.0 | % | U.S. Government - Bureau of Land Management | ||
|
| Total / Weighted Average |
| 13 |
| 1,391 |
| $ | 232,579 |
| $ | 167.20 |
| 9.1 | % | 8.5 | % | 100.0 |
|
|
(1) | Represents the gross contract purchase or sale price and excludes closing costs and amounts necessary to adjust assumed liabilities to their fair values. |
(2) | Represents the ratio of the estimated current GAAP based annual rental income less property operating expenses to the purchase price on the date of acquisition. |
(3) | Average remaining lease term based on rental income as of the date of acquisition. |
(4) | Percent leased as of the date of acquisition. |
(5) | In June 2010, GOV entered a series of agreements to acquire 15 properties for an aggregate purchase price of $231 million, excluding acquisition costs. The cap rate presented for these properties is the expected cap rate for the 15 properties combined. |
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
PROPERTY SCHEDULE | |||||||||||
|
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|
|
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|
|
| % NOI |
|
|
|
|
|
|
|
|
| % Rental |
| Three Months |
|
|
| Location |
| Sq. Ft. |
| % Sq. Ft. |
| Income(1) |
| ended 6/30/10 (2) |
|
1 |
| 20 Massachusetts Avenue, Washington DC |
| 339,541 |
| 6.8 | % | 12.7 | % | 13.0 | % |
2 |
| 5045 East Butler Ave, Fresno CA |
| 531,976 |
| 10.8 | % | 8.0 | % | 10.7 | % |
3 |
| 1401 Rockville Pike, Rockville MD |
| 188,444 |
| 3.8 | % | 5.7 | % | 7.2 | % |
4 |
| 3300 75th Avenue, Landover MD |
| 266,000 |
| 5.4 | % | 4.3 | % | 6.0 | % |
5 |
| 915 L Street, Sacramento CA |
| 163,840 |
| 3.3 | % | 4.9 | % | 5.0 | % |
6 |
| 12795 W. Alameda Parkway, Lakewood CO |
| 166,745 |
| 3.4 | % | 3.9 | % | 4.5 | % |
7 |
| 201 Indianola Avenue, Phoenix AZ |
| 97,145 |
| 2.0 | % | 3.3 | % | 3.6 | % |
8 |
| 4560 Viewridge Road, San Diego CA |
| 147,955 |
| 3.0 | % | 2.9 | % | 3.5 | % |
9 |
| 5600 Columbia Pike, Falls Church VA |
| 164,746 |
| 3.4 | % | 3.2 | % | 3.2 | % |
10 |
| 12 Executive Park Drive, Atlanta GA |
| 128,390 |
| 2.6 | % | 2.9 | % | 2.9 | % |
11 |
| 8 Corporate Boulevard, Atlanta GA |
| 151,252 |
| 3.1 | % | 3.2 | % | 2.8 | % |
12 |
| 10-12 Celina Drive, Nashua NH |
| 321,800 |
| 6.6 | % | 2.3 | % | 2.7 | % |
13 |
| 130-138 Delaware Avenue, Buffalo NY |
| 124,647 |
| 2.5 | % | 2.6 | % | 2.3 | % |
14 |
| 11411 Jefferson Avenue, Detroit MI |
| 55,966 |
| 1.1 | % | 2.2 | % | 2.2 | % |
15 |
| 2420 Stevens Center Place, Richland WA |
| 92,914 |
| 1.9 | % | 1.7 | % | 2.0 | % |
16 |
| 75 Pleasant Street, Malden MA |
| 125,521 |
| 2.6 | % | 4.5 | % | 2.0 | % |
17 |
| 2020 S. Arlington Heights Road, Arlington Heights IL |
| 57,770 |
| 1.2 | % | 1.7 | % | 1.9 | % |
18 |
| 9800 Goethe Road, Sacramento CA |
| 110,500 |
| 2.3 | % | 1.8 | % | 1.9 | % |
19 |
| 7401 West Mansfield, Lakewood CO |
| 70,884 |
| 1.4 | % | 1.7 | % | 1.7 | % |
20 |
| 16194 West 45th Street, Golden CO |
| 43,232 |
| 0.9 | % | 1.4 | % | 1.5 | % |
21 |
| 7301 West Mansfield, Lakewood CO |
| 70,904 |
| 1.4 | % | 1.4 | % | 1.5 | % |
22 |
| 9797 Aero Drive, San Diego CA |
| 94,272 |
| 1.9 | % | 1.7 | % | 1.5 | % |
23 |
| 7201 West Mansfield, Lakewood CO |
| 71,208 |
| 1.5 | % | 1.4 | % | 1.4 | % |
24 |
| 4241 & 4300 NE 34th Street, Kansas City MO |
| 98,073 |
| 2.0 | % | 1.4 | % | 1.4 | % |
25 |
| 12 Corporate Boulevard, Atlanta GA |
| 99,084 |
| 2.0 | % | 1.3 | % | 1.3 | % |
26 |
| 701 Clay Road, Waco TX |
| 137,782 |
| 2.8 | % | 2.0 | % | 1.3 | % |
27 |
| 20400 Century Boulevard, Germantown MD |
| 80,550 |
| 1.6 | % | 1.5 | % | 1.2 | % |
28 |
| 65 Bowdoin Street, Burlington VT |
| 26,609 |
| 0.5 | % | 1.0 | % | 1.1 | % |
29 |
| 9174 Sky Park Centre, San Diego CA |
| 43,918 |
| 0.9 | % | 0.9 | % | 1.1 | % |
30 |
| 5353 Yellowstone Road, Cheyenne WY |
| 122,647 |
| 2.5 | % | 1.3 | % | 1.1 | % |
31 |
| 2430 Stevens Center Place, Richland WA |
| 47,238 |
| 1.0 | % | 0.9 | % | 1.0 | % |
32 |
| 110 Centerview Drive, Columbia SC |
| 71,580 |
| 1.5 | % | 1.0 | % | 1.0 | % |
33 |
| 4201 Patterson Avenue, Baltimore MD |
| 84,674 |
| 1.7 | % | 1.1 | % | 1.0 | % |
34 |
| 2645 and 2655 Long Lake Road, Roseville MN |
| 61,426 |
| 1.3 | % | 0.9 | % | 0.9 | % |
35 |
| 1 Corporate Boulevard, Atlanta GA |
| 37,554 |
| 0.8 | % | 0.6 | % | 0.7 | % |
36 |
| 11 Corporate Boulevard, Atlanta GA |
| 32,158 |
| 0.7 | % | 0.4 | % | 0.4 | % |
37 |
| 10 Corporate Boulevard, Atlanta GA |
| 32,828 |
| 0.7 | % | 0.4 | % | 0.4 | % |
38 |
| 400 State Avenue, Kansas City KS |
| 170,817 |
| 3.5 | % | 2.4 | % | 0.4 | % |
39 |
| One Montvale Avenue, Stoneham MA |
| 97,777 |
| 2.0 | % | 2.0 | % | 0.3 | % |
40 |
| 882 TJ Jackson Drive, Falling Waters WV |
| 36,818 |
| 0.8 | % | 0.6 | % | 0.2 | % |
41 |
| 744 14th Avenue, Safford AZ |
| 37,780 |
| 0.8 | % | 0.9 | % | 0.2 | % |
|
|
|
| 4,904,965 |
| 100.0 | % | 100.0 | % | 100.0 | % |
(1) | Rental income is the annualized rent from tenants pursuant to signed leases as of 6/30/2010, plus expense reimbursements excluding lease value amortization. |
(2) | NOI is property net operating income and is defined as property rental income less property operating expenses; see page 14 for the calculation and reconciliation of NOI to net income. |
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
| |||||||||
TENANT LIST | |||||||||
(sq. ft. in thousands) | |||||||||
| |||||||||
| |||||||||
|
|
|
|
|
| % of Total |
| % of Rental |
|
|
| Tenant |
| Sq. Ft. (1) |
| Sq. Ft. (1) |
| Income (2) |
|
|
| US Government: |
|
|
|
|
|
|
|
1 |
| U.S. Citiznship & Immigration Service |
| 312,486 |
| 6.4 | % | 10.4 | % |
2 |
| Internal Revenue Service |
| 576,186 |
| 11.7 | % | 9.0 | % |
3 |
| Centers for Disease Control |
| 481,266 |
| 9.8 | % | 8.8 | % |
4 |
| Department of Justice |
| 228,761 |
| 4.7 | % | 8.1 | % |
5 |
| Federal Bureau of Investigation |
| 191,417 |
| 3.9 | % | 5.0 | % |
6 |
| National Business Center |
| 212,996 |
| 4.3 | % | 4.4 | % |
7 |
| Defense Intelligence Agency |
| 266,000 |
| 5.4 | % | 4.3 | % |
8 |
| Department of Energy |
| 220,702 |
| 4.5 | % | 4.1 | % |
9 |
| National Park Service |
| 166,745 |
| 3.4 | % | 3.9 | % |
10 |
| Food and Drug Administration |
| 133,920 |
| 2.7 | % | 3.8 | % |
11 |
| Defense Information Systems Agency |
| 163,407 |
| 3.4 | % | 3.0 | % |
12 |
| Drug Enforcement Agency |
| 147,955 |
| 3.0 | % | 2.9 | % |
13 |
| Department of Veterans Affairs |
| 174,600 |
| 3.6 | % | 2.6 | % |
14 |
| U.S. Postal Service |
| 321,800 |
| 6.6 | % | 2.3 | % |
15 |
| Bureau of Land Management |
| 160,427 |
| 3.3 | % | 2.2 | % |
16 |
| Occupational Health and Safety Administration |
| 57,770 |
| 1.2 | % | 1.7 | % |
17 |
| Financial Management Service |
| 98,073 |
| 2.0 | % | 1.4 | % |
18 |
| Environmental Protection Agency |
| 43,232 |
| 0.9 | % | 1.4 | % |
19 |
| Housing and Urban Development |
| 69,437 |
| 1.4 | % | 1.1 | % |
20 |
| Bureau of Prisons |
| 51,138 |
| 1.0 | % | 0.8 | % |
21 |
| Equal Employment Opportunity Commission |
| 12,048 |
| 0.2 | % | 0.2 | % |
22 |
| Department of Labor |
| 6,459 |
| 0.1 | % | 0.1 | % |
23 |
| Executive Office for Immigration Review |
| 5,500 |
| 0.1 | % | 0.1 | % |
|
|
|
|
|
|
|
|
|
|
|
| State Government: |
|
|
|
|
|
|
|
1 |
| State of California - four agency occupants |
| 264,001 |
| 5.4 | % | 5.5 | % |
2 |
| State of Massachusetts - Education |
| 125,521 |
| 2.6 | % | 4.5 | % |
3 |
| State of Maryland - three agency occupants |
| 84,674 |
| 1.7 | % | 1.1 | % |
4 |
| State of South Carolina - Labor, Licensing and Regulations |
| 71,580 |
| 1.5 | % | 1.0 | % |
5 |
| State of Minnesota - Lottery |
| 61,426 |
| 1.3 | % | 0.9 | % |
|
|
|
|
|
|
|
|
|
|
|
| 36 Non government Tenants |
| 178,272 |
| 3.6 | % | 5.4 | % |
|
| Subtotal Leased Square Feet |
| 4,887,799 |
| 99.7 | % | 100.0 | % |
|
|
|
|
|
|
|
|
|
|
|
| Available for Lease |
| 17,166 |
| 0.3 | % | — |
|
|
| Total Square Feet |
| 4,904,965 |
| 100.0 | % | 100.0 | % |
(1) | Sq. ft. is pursuant to signed leases as of 6/30/2010, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease, if any. |
(2) | Rental income is annualized rent from tenants pursuant to signed leases as of 6/30/2010, plus expense reimbursements; excludes lease value amortization. |
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
OCCUPANCY AND LEASING SUMMARY | ||||||||||||||||
(dollars and sq. ft. in thousands, except per sq. ft. data) | ||||||||||||||||
| ||||||||||||||||
| ||||||||||||||||
|
| As of and For the Three Months Ended |
| |||||||||||||
|
| 6/30/2010 |
| 3/31/2010 |
| 12/31/2009 |
| 9/30/2009 |
| 6/30/2009 |
| |||||
Properties |
| 41 |
| 35 |
| 33 |
| 30 |
| 29 |
| |||||
Total sq. ft. (1) |
| 4,905 |
| 4,390 |
| 3,957 |
| 3,626 |
| 3,304 |
| |||||
Percentage leased |
| 99.7 | % | 100.0 | % | 99.9 | % | 99.6 | % | 99.3 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Leasing Activity (sq. ft.): |
|
|
|
|
|
|
|
|
|
|
| |||||
New leases |
| 2 |
| 3 |
| 14 |
| 10 |
| — |
| |||||
Renewals |
| 11 |
| 1 |
| — |
| — |
| 4 |
| |||||
Total |
| 13 |
| 4 |
| 14 |
| 10 |
| 4 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Capital Commitments (2): |
|
|
|
|
|
|
|
|
|
|
| |||||
New leases |
| $ | 44 |
| $ | 8 |
| $ | 188 |
| $ | 2 |
| $ | — |
|
Renewals |
| 90 |
| 16 |
| — |
| — |
| 8 |
| |||||
Total |
| $ | 134 |
| $ | 24 |
| $ | 188 |
| $ | 2 |
| $ | 8 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Capital Commitments per Sq. Ft. (2): |
|
|
|
|
|
|
|
|
|
|
| |||||
New leases |
| $ | 21.25 |
| $ | 2.39 |
| $ | 13.05 |
| $ | 0.15 |
| $ | — |
|
Renewals |
| $ | 8.60 |
| $ | 15.87 |
| $ | — |
| $ | — |
| $ | 1.94 |
|
Total |
| $ | 10.68 |
| $ | 5.46 |
| $ | 13.05 |
| $ | 0.15 |
| $ | 1.94 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted Average Lease Term by Sq. Ft. (years): |
|
|
|
|
|
|
|
|
|
|
| |||||
New leases |
| 5.3 |
| 1.1 |
| 5.4 |
| 6.3 |
| — |
| |||||
Renewals |
| 3.7 |
| 5.8 |
| — |
| — |
| 3.7 |
| |||||
Total |
| 4.0 |
| 2.2 |
| 5.4 |
| 6.3 |
| 3.7 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Capital Commitments per Sq. Ft. per Year: |
|
|
|
|
|
|
|
|
|
|
| |||||
New leases |
| $ | 4.03 |
| $ | 2.13 |
| $ | 2.42 |
| $ | 0.02 |
| $ | — |
|
Renewals |
| $ | 2.32 |
| $ | 2.72 |
| $ | — |
| $ | — |
| $ | 0.53 |
|
Total |
| $ | 2.70 |
| $ | 2.43 |
| $ | 2.42 |
| $ | 0.02 |
| $ | 0.53 |
|
(1) | Sq. ft. measurements are subject to modest changes when space is re-measured or re-configured for new tenants. |
(2) | Represents commitments to tenant improvements and leasing costs. |
The above leasing summary is based on leases executed during the periods indicated.
Government Properties Income Trust
Supplemental Operating and Financial Data
June 30, 2010
LEASE EXPIRATION SCHEDULE | ||||||||||||||
(dollars and sq. ft. in thousands) | ||||||||||||||
| ||||||||||||||
| ||||||||||||||
|
| Sq. Ft. |
| % of Sq. Ft. |
| Cumulative % |
| Rental |
| % of Rental |
| Cumulative |
| |
2010 |
| 90 |
| 1.9 | % | 1.9 | % | $ | 1,817 |
| 1.6 | % | 1.6 | % |
2011 |
| 611 |
| 12.5 | % | 14.4 | % | 11,705 |
| 10.6 | % | 12.2 | % | |
2012 |
| 752 |
| 15.3 | % | 29.7 | % | 24,353 |
| 22.2 | % | 34.4 | % | |
2013 |
| 985 |
| 20.2 | % | 49.9 | % | 16,247 |
| 14.7 | % | 49.1 | % | |
2014 |
| 317 |
| 6.5 | % | 56.4 | % | 6,461 |
| 5.9 | % | 55.0 | % | |
2015 |
| 479 |
| 9.8 | % | 66.2 | % | 9,050 |
| 8.2 | % | 63.2 | % | |
2016 |
| 206 |
| 4.2 | % | 70.4 | % | 4,777 |
| 4.3 | % | 67.5 | % | |
2017 |
| 401 |
| 8.2 | % | 78.6 | % | 7,707 |
| 7.0 | % | 74.5 | % | |
2018 |
| 266 |
| 5.4 | % | 84.0 | % | 9,081 |
| 8.2 | % | 82.7 | % | |
2019 and thereafter |
| 781 |
| 16.0 | % | 100.0 | % | 19,084 |
| 17.3 | % | 100.0 | % | |
Total |
| 4,888 |
| 100.0 | % |
|
| $ | 110,282 |
| 100.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Weighted average remaining lease term (in years) |
| 4.7 |
|
|
|
|
| 4.9 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Sq. ft. is pursuant to signed leases as of 6/30/2010, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease, if any. |
(2) | Rental income is annualized rent from tenants pursuant to signed leases as of 6/30/2010, plus expense reimbursements; excludes lease value amortization. |