Exhibit 99.2
SELECTED PRO FORMA COMBINING CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma financial information gives effect to
the acquisition of the Target REITs by four wholly-owned acquisition
subsidiaries of FSP Corp., which was consummated on April 30, 2005.
The unaudited pro forma financial information has been prepared based upon
certain pro forma adjustments to the historical consolidated financial
statements of FSP Corp. and the Target REITs. The pro forma consolidated balance
sheets have been presented as if the mergers occurred as of December 31, 2004.
The pro forma consolidated statements of income for the year ended December 31,
2004 and the consolidated pro forma statements of cash flow for the year ended
December 31, 2004 are presented as if the mergers occurred at the beginning of
the period presented.
Certain balances in the Target REIT financial statements have been
reclassified to conform to FSP Corp.'s presentation.
The unaudited pro forma financial information has been derived from the
financial statements of FSP Corp. and the Target REITs and should be read in
conjunction with those financial statements and the accompanying notes and
"Management's Discussion and Analysis of Financial Information and Results of
Operations," all of which are included in this Current Report on Form 8-K, in
FSP Corp.'s Annual Report on Form 10-K for the year ended December 31, 2004, or
in FSP Corp.'s Registration Statement on Form S-4 (No. 333-118748).
The unaudited pro forma consolidated financial statement data are not
necessarily indicative of what the combined company's actual financial position
or results of operations would have been as of the date or for the period
indicated, nor do they purport to represent the combined company's financial
position or results of operations as of or for any future period.
1
Franklin Street Properties Corp.
Combining Consolidated Pro Forma Balance Sheets
December 31, 2004
(Unaudited)
Historical Historical Pro Forma
(in thousands) FSP Corp. Target REITs(g) Adjustments Pro Forma
=================================================================================================================
Assets:
Real estate assets, net $ 439,755 $ 122,516 $ 14,172(c)(d) $ 576,443
Acquired favorable leases, net -- 8,170 1,760(d) 9,930
Acquired lease origination costs, net 6,483 3,603 519(d) 10,605
Investment in non-consolidated REITs 4,270 -- -- 4,270
Assets held for syndication 59,246 -- -- 59,246
Cash and cash equivalents 52,752 15,895 (553)(c) 67,939
(155)(b)
Restricted cash 1,033 706 -- 1,739
Tenant rents receivable, net 769 143 -- 912
Straight line rents receivable, net 4,947 2,636 (2,636)(j) 4,947
Prepaid expenses 901 94 -- 995
Other assets 1,097 -- (447)(c) 650
Deferred lease origination costs 1,484 363 (363)(l) 1,484
Office computers and equipment, net 374 -- -- 374
- -----------------------------------------------------------------------------------------------------------------
Total assets $ 573,111 $ 154,126 $ 12,297 $ 739,534
=================================================================================================================
Liabilities and stockholders' equity:
Liabilities:
Notes payable $ 59,439 $ -- $ -- $ 59,439
Accounts payable and accrued expenses 8,846 3,990 -- 12,836
Accrued compensation 705 -- -- 705
Distributions payable -- 4,035 1,859(i) 5,894
Acquired unfavorable leases -- -- 665(d) 665
Tenant security deposits 1,033 135 -- 1,168
- -----------------------------------------------------------------------------------------------------------------
Total liabilities 70,023 8,160 2,524 80,707
- -----------------------------------------------------------------------------------------------------------------
Stockholders' equity:
Preferred stock -- -- -- --
Common stock 5 -- 1(f) 6
Additional paid in capital 512,813 167,412 (11,674)(f) 668,551
Treasury stock (10) -- -- (10)
Retained earnings (distributions in excess
of earnings), net (9,720) (21,446) 21,446(k) (9,720)
- -----------------------------------------------------------------------------------------------------------------
Total stockholders' equity 503,088 145,966 9,773 658,827
- -----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 573,111 $ 154,126 $ 12,297 $ 739,534
=================================================================================================================
See accompanying notes to combining consolidated pro forma financial statements.
2
Franklin Street Properties Corp.
Combining Consolidated Pro Forma Statements of Income
For the Year Ended
December 31, 2004
(Unaudited)
Historical Historical Pro Forma
(in thousands, except per share amounts) FSP Corp. Target REITs (h) Adjustments Pro Forma
=======================================================================================================================
Revenue:
Rental income $ 71,782 $22,239 $ (998)(d) $ 93,245
222(d)
Related party revenue:
Syndication fees 13,579 -- -- 13,579
Transaction fees 14,093 -- -- 14,093
Management fees and interest from loans 581 -- (239)(e) 342
Other 17 -- -- 17
- -----------------------------------------------------------------------------------------------------------------------
Total revenue 100,052 22,239 (1,015) 121,276
=======================================================================================================================
Expenses:
Rental operating expenses 14,809 4,941 (239)(e) 19,511
Real estate taxes and insurance 9,479 2,392 -- 11,871
Depreciation and amortization 13,592 3,863 363(d) 18,058
240(d)
Selling, general and administrative 5,686 352 155(b) 6,193
Commissions 6,959 -- -- 6,959
Interest 1,527 -- -- 1,527
- -----------------------------------------------------------------------------------------------------------------------
Total expenses 52,052 11,548 519 64,119
=======================================================================================================================
Income (loss) before interest, taxes and 48,000 10,691 (1,534) 57,157
equity in earnings of non-consolidated REITs:
Interest income 868 277 -- 1,145
Equity in earnings of non-consolidated REITs 620 -- -- 620
Taxes on income (a) (1,725) -- -- (1,725)
- -----------------------------------------------------------------------------------------------------------------------
Net income 47,763 10,968 (1,534) 57,197
=======================================================================================================================
Weighted average shares outstanding,
basic and diluted 49,628 -- 10,895(f) 60,523
=======================================================================================================================
Net income per share basic and diluted $ 0.96 $ -- $ -- $ 0.95
=======================================================================================================================
See accompanying notes to combining consolidated pro forma financial statements.
3
Franklin Street Properties Corp.
Combining Consolidated Pro Forma Statements of Cash Flows
For the Year Ended
December 31, 2004
(Unaudited)
Historical Historical Pro Forma
(in thousands) FSP Corp. Target REITs (h) Adjustments Pro Forma
====================================================================================================================================
Cash flows from operating activities:
Net income $ 47,763 $ 10,968 $ (1,534) $ 57,197
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization expense 13,006 3,863 603(d) 17,472
Amortization of above/below market leases, net 235 2,578 776(d) 3,589
Sponsored REIT income during consolidation (852) -- -- (852)
Equity in earnings from non-consolidated REITs (620) -- -- (620)
Distributions from non-consolidated REITs 1,582 -- -- 1,582
Increase to bad debt reserves 195 -- -- 195
Shares issued as compensation 161 -- -- 161
Changes in operating assets and liabilities:
Restricted cash (51) 15 -- (36)
Tenant rent receivables, net (83) (66) -- (149)
Straight-line rents, net (860) (590) -- (1,450)
Prepaid expenses and other assets, net (1,192) 1 447(c) (744)
Accounts payable and accrued expenses 3,816 (183) -- 3,633
Accrued compensation (840) -- -- (840)
Tenant security deposits 51 (15) -- 36
Payment of deferred leasing commissions (582) (382) -- (964)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 61,729 16,189 292 78,210
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of real estate assets (1,641) (926) (1,000)(c) (3,567)
Investment in non-consolidated REITs (4,270) -- -- (4,270)
Investment in assets held for syndication (55,490) -- -- (55,490)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (61,401) (926) (1,000) (63,327)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Distributions to stockholders (61,536) (16,245) -- (77,781)
Purchase of treasury stock (155) -- -- (155)
Proceeds from long-term debt 59,439 -- -- 59,439
Principal payments on long-term debt (4,117) -- -- (4,117)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (6,369) (16,245) -- (22,614)
- -----------------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (6,041) (982) (708) (7,731)
Cash and cash equivalents, beginning of period 58,793 16,877 -- 75,670
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 52,752 $ 15,895 $ (708) $ 67,939
===================================================================================================================================
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 1,503 $ -- $ -- $ 1,503
Income taxes $ 1,665 $ -- $ -- $ 1,665
Non-cash investing and financing activities:
Distributions declared but not paid $ -- $ 4,035 $ 1,859(i) $ 5,894
Assets acquired through issuance of common stock
in merger transactions, net $ -- $ -- $ 149,075 $ 149,075
See accompanying notes to combining consolidated pro forma financial statements.
4
FRANKLIN STREET PROPERTIES CORP.
NOTES TO COMBINING CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
On April 30, 2005, each of four wholly-owned subsidiaries of FSP Corp.
acquired a Target REIT by merger. The following unaudited pro forma condensed
consolidated financial statement presentation has been prepared based upon
certain pro forma adjustments to the historical consolidated financial
statements of FSP Corp. The pro forma balance sheets are presented as if the
mergers occurred as of December 31, 2004. The pro forma statements of income and
the pro forma statements of cash flow are presented as if the mergers occurred
as of the beginning of the periods presented.
The mergers will be treated as a purchase of assets and each Target REIT's
assets and liabilities will be recorded on FSP Corp.'s books at their fair value
as of the effective date of the mergers, which was April 30, 2005. The value
ascribed to the net assets of the target REITs is estimated to be $156,739,000,
which includes real estate assets of $149,075,000 at their appraised values,
cash of $6,664,000 and capitalized merger costs of $1,000,000. Other assets, net
of liabilities, are expected to be immaterial. FSP Corp. will record the mergers
based upon the fair value of the assets acquired, not the value of the shares of
FSP Corp.'s common stock issued. The value allocated to the assets acquired in
the mergers is preliminary; the final value allocated to the assets acquired
is subject to change as additional information is obtained.
PRO FORMA ADJUSTMENTS
Certain assumptions regarding the operations of FSP Corp. have been made
in connection with the preparation of the pro forma condensed consolidated
financial information. These assumptions are as follows:
(a) FSP Corp. and each of the Target REITs have elected to be, and are
qualified as, a real estate investment trust for federal income tax
purposes. Each entity has met the various required tests; therefore,
no provision for federal or state income taxes has been reflected on
real estate operations.
FSP Corp. has subsidiaries which are not in the business of real
estate operations. Those subsidiaries are taxable as real estate
investment trust subsidiaries, or TRS, and are subject to income
taxes at statutory tax rates. The taxes on income shown in the pro
forma statements of income are the taxes on income of the TRS. There
are no material items that would cause a deferred tax asset or a
deferred tax liability.
(b) Costs of the mergers to the Target REITs are estimated at $507,000
and are reflected as paid at December 31, 2004, and are recorded as
an administrative expense. Costs of $352,000 were previously
recorded as administrative expenses in 2004 and an additional
$155,000 is estimated to complete the merger.
(c) The costs of the mergers to FSP Corp. are estimated at $1,000,000
and are reflected as paid as of December 31, 2004 and are
capitalized to the assets acquired. Costs of $447,000 were
previously recorded as other assets in 2004 and an additional
$553,000 is estimated to complete the merger.
(d) The following schedule shows the merger consideration for the
acquired properties and is reconciled to the purchase price of such
properties (which is equal to the appraised value of such property
plus capitalized merger costs attributable to such property).
5
FRANKLIN STREET PROPERTIES CORP.
NOTES TO COMBINING CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
(in thousands) Montague Addison Royal Ridge Collins Crossing Total
-------------- -------- ------- ----------- ---------------- -----
Merger consideration $ 33,400 $ 66,965 $ 31,888 $ 60,588 $ 192,841
Premium (11,365) (10,788) (4,846) (10,103) (37,102)
Adjusted Cash Reserves (2,035) (1,677) (967) (1,985) (6,664)
----------------------------------------------------------------------
Purchase price of properties
at appraised value 20,000 54,500 26,075 48,500 149,075
Capitalized merger costs 182 349 164 305 1,000
----------------------------------------------------------------------
$ 20,182 $ 54,849 $ 26,239 $ 48,805 $ 150,075
======================================================================
The cost of the property held by each Target REIT (including capitalized
merger costs of $1,000,000) has been allocated to real estate assets, acquired
lease origination costs and acquired favorable or unfavorable leases. Acquired
lease origination costs represent the value associated with acquiring an
in-place lease (i.e. the market cost to execute a similar lease, including
leasing commission, legal, vacancy and other related costs). Acquired favorable
or unfavorable leases represents the value associated with a lease which has a
rental stream with above or below market rates. The value assigned to buildings,
land and leases approximates their fair value.
The following schedule shows the difference between historical costs of
the properties and their allocated purchase price. The purchase price of the
properties is determined based upon the fair value of the assets acquired.
Depreciation and amortization for the Target REITs is based on a preliminary
allocation of the purchase price to real estate investments and to the leases
acquired. The allocation is subject to change as additional information is
obtained. An increase in the value allocated to leases will result in an
increase in amortization. For each $1,000,000 increase in the value allocated to
leases, the related pro forma amortization will increase by approximately
$325,000 per year.
6
FRANKLIN STREET PROPERTIES CORP.
NOTES TO COMBINING CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
Adjustment to
Depreciation and
Amortization
Estimated for the
Historical Allocated Life Year ended
(in thousands, except years) Cost Purchase Price Difference (years) December 31, 2004
------------------------------------------------------------------------------------------------------------------
Montague
Land $ 10,500 $ 9,776 $ (724) N/A $ --
Building 9,871 6,310 (3,561) 39 (91)
Acquired favorable leases 2,325 3,313 988 2 494
Acquired lease origination costs 215 783 568 2 284
---------- --------- --------- --------
Total $ 22,911 $ 20,182 $ (2,729) $ 687
========== ========= ========= ========
Addison Circle
Land $ 4,365 $ 4,874 $ 509 N/A $ --
Building 43,713 47,529 3,816 39 98
Acquired favorable leases - 2,235 2,235 3 745
Acquired unfavorable leases - (665) (665) 3 (222)
Acquired lease origination costs 1,069 876 (193) 3 (64)
---------- --------- --------- --------
Total $ 49,147 $ 54,849 $ 5,702 $ 557
========== ========= ========= ========
Royal Ridge
Land $ 1,649 $ 2,160 $ 511 N/A $ --
Building 15,772 21,680 5,908 39 151
Acquired favorable leases 2,442 1,448 (994) 8 (124)
Acquired lease origination costs 819 951 132 8 17
---------- --------- --------- --------
Total $ 20,682 $ 26,239 $ 5,557 $ 44
========== ========= ========= ========
`
Collins Crossing
Land $ 4,022 $ 3,744 $ (278) N/A $ --
Building 32,624 40,615 7,991 39 205
Acquired favorable leases 3,403 2,934 (469) 4 (117)
Acquired lease origination costs 1,500 1,512 12 4 3
---------- --------- --------- --------
Total $ 41,549 $ 48,805 $ 7,256 $ 91
========== ========= ========= ========
Total:
Land $ 20,536 $ 20,554 $ 18 N/A $ --
Building 101,980 116,134 14,154 39 363
---------- --------- --------- --------
Real estate assets, net 122,516 136,688 14,172
Acquired favorable leases 8,170 9,930 1,760 2-8 998
Acquired unfavorable leases - (665) (665) 3 (222)
Acquired lease origination costs 3,603 4,122 519 2-8 240
---------- --------- --------- --------
Total $ 134,289 $ 150,075 $ 15,786 $ 1,379
========== ========= ========= ========
(e) Management fees of $239,000 charged by FSP Corp. to the Target REITs
have been eliminated from revenue and expenses.
7
FRANKLIN STREET PROPERTIES CORP.
NOTES TO COMBINING CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
(f) Approximately 10,894,994 shares of FSP common stock were issued in
exchange for the 1,822.5 outstanding shares of Target REIT preferred
stock in connection with the mergers. Stockholders' equity will be
adjusted by the net difference between the assets and liabilities
acquired in the merger. The following schedule shows a
reconciliation detailing the adjustments to additional
paid-in-capital.
FSP Target
(in thousands) Corp REITs Total
-------------- -------------------------------------------
Additional paid-in-capital:
FSP Corp:
Total excess of Allocated Purchase
Price over Historical Cost $15,786
Less Estimated Merger Costs (1,000)
-----------
14,786 $ 14,786
Adjustment to record Par Value (1) (1)
Target REITS:
Adjustments for:
Estimated merger costs $ (155) (155)
Deferred leasing costs, net (363) (363)
Straight-line rent receivables (2,636) (2,636)
Distribution payable (1,859) (1,859)
Distributions in excess of earnings (21,446) (21,446)
-------------------------------------------
$14,785 $(26,459) $(11,674)
===========================================
8
FRANKLIN STREET PROPERTIES CORP.
NOTES TO COMBINING CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
(g) The following table combines the historical balance sheets of the
Target REITs as of December 31, 2004.
(in thousands) Montague Addison Circle Royal Ridge Collins Crossing Total
- -------------- ------------ -------------- ------------ ---------------- ------------
Assets:
Land $ 10,500 $ 4,365 $ 1,649 $ 4,022 $ 20,536
Building 10,499 46,469 16,567 34,233 107,768
------------ ------------ ------------ ------------ ------------
Real estate investments, cost 20,999 50,834 18,216 38,255 128,304
Less accumulated depreciation 628 2,756 795 1,609 5,788
------------ ------------ ------------ ------------ ------------
Real estate investments, net 20,371 48,078 17,421 36,646 122,516
Acquired favorable leases, net 2,325 -- 2,442 3,403 8,170
Acquired lease origination costs, net 215 1,069 819 1,500 3,603
Cash and equivalents 3,657 5,306 2,005 4,927 15,895
Restricted cash -- 20 571 115 706
Tenant rent receivable, net -- 37 -- 106 143
Step rent receivable, net 462 503 1,061 610 2,636
Prepaid expenses 20 23 6 45 94
Deferred leasing commissions, net -- 363 -- -- 363
------------ ------------ ------------ ------------ ------------
Total assets $ 27,050 $ 55,399 $ 24,325 $ 47,352 $ 154,126
============ ============ ============ ============ ============
Liabilities and stockholders' Equity:
Accounts payable and accrued expenses $ 452 $ 1,885 $ 281 $ 1,372 $ 3,990
Distributions payable 1,020 1,289 542 1,184 4,035
Tenant security deposits -- 20 -- 115 135
------------ ------------ ------------ ------------ ------------
Total liabilities 1,472 3,194 823 2,671 8,160
------------ ------------ ------------ ------------ ------------
Stockholders' equity
Preferred stock -- -- -- -- --
Common stock -- -- -- -- --
Additional paid in capital 30,652 58,383 27,277 51,100 167,412
Retained deficit and distributions in excess
of earnings (5,074) (6,178) (3,775) (6,419) (21,446)
------------ ------------ ------------ ------------ ------------
Total stockholders' equity 25,578 52,205 23,502 44,681 145,966
------------ ------------ ------------ ------------ ------------
Total liabilities & stockholders' equity $ 27,050 $ 55,399 $ 24,325 $ 47,352 $ 154,126
============ ============ ============ ============ ============
9
FRANKLIN STREET PROPERTIES CORP.
NOTES TO COMBINING CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
(h) The following table combines the historical operations for the
Target REITs for the year ended December 31, 2004.
(in thousands) Montague Addison Circle Royal Ridge Collins Crossing Total
- -------------- ------------ -------------- ------------ ---------------- ------------
Revenue:
Rental $ 3,432 $ 8,753 $ 3,064 $ 6,990 $ 22,239
------------ ------------ ------------ ------------ ------------
Total revenue 3,432 8,753 3,064 6,990 22,239
------------ ------------ ------------ ------------ ------------
Expenses:
Rental operating expenses 284 1,940 875 1,842 4,941
Real estate taxes and insurance 255 1,040 324 773 2,392
Depreciation and amortization 376 1,615 576 1,296 3,863
Selling general and administrative 63 114 66 109 352
------------ ------------ ------------ ------------ ------------
Total expenses 978 4,709 1,841 4,020 11,548
------------ ------------ ------------ ------------ ------------
Income before interest 2,454 4,044 1,223 2,970 10,691
Interest income 61 94 37 85 277
------------ ------------ ------------ ------------ ------------
Net income $ 2,515 $ 4,138 $ 1,260 $ 3,055 $ 10,968
============ ============ ============ ============ ============
(i) FSP Corp. purchased the real estate assets and a stated amount of
cash (the adjusted cash reserves) from each Target REIT in exchange
for a fixed number of shares of FSP common stock. The final dividend
to the shareholders of the Target REITs represents the estimated
amount of cash in excess of the stated amount of cash and assuming
settlement of certain current assets and liabilities as of the date
of the pro forma balance sheet. The estimated final dividend as of
the date of the pro forma balance sheet for the Target REITs is
shown in the following table. The actual final dividend will be
based upon the amount of cash in excess of the stated amount of cash
and assuming settlement of certain current assets and liabilities as
of the actual merger date.
(in thousands)
--------------
Montague $ 140
Addison 465
Royal Ridge 762
Collins Crossing 492
-------
Total $ 1,859
=======
(j) The cumulative unbilled straight-line rents of the Target REITs will
be eliminated at acquisition.
(k) The cumulative deficit of the Target REITs will be eliminated at
acquisition.
(l) The cumulative net deferred leasing costs of the Target REITs will
be eliminated at acquisition.
10
FRANKLIN STREET PROPERTIES CORP.
NOTES TO COMBINING CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
(m) The following table combines the historical cash flows for the
Target REITs for the year ended December 31, 2004.
(in thousands) Montague Addison Royal Collins Crossing Total
==================================================================================================================================
Cash flows from operating activities:
Net income $ 2,515 $ 4,138 $ 1,260 $ 3,055 $ 10,968
Adjustments to reconcile net income (loss) to net cash
provided by (used for)operating activities:
Depreciation and amortization expense 376 1,615 576 1,296 3,863
Amortization of favorable leases 1,163 -- 465 950 2,578
Changes in operating assets and liabilities:
Restricted cash -- 15 -- -- 15
Tenant rent receivables -- 15 -- (81) (66)
Step rent receivable (70) (82) (107) (331) (590)
Prepaid expenses and other assets (6) 1 8 (2) 1
Accounts payable and accrued expenses 41 (170) 41 (95) (183)
Tenant security deposits -- (15) -- -- (15)
Payment of deferred leasing commissions -- (382) -- -- (382)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 4,019 5,135 2,243 4,792 16,189
- ----------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of real estate assets and related leases,
office computers and furniture -- (574) (343) (9) (926)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities -- (574) (343) (9) (926)
- ----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Distributions to stockholders (3,956) (5,221) (2,146) (4,922) (16,245)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (3,956) (5,221) (2,146) (4,922) (16,245)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 63 (660) (246) (139) (982)
Cash and cash equivalents, beginning of period 3,594 5,966 2,251 5,066 16,877
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 3,657 $ 5,306 $ 2,005 $ 4,927 $ 15,895
==================================================================================================================================
Supplemental disclosure of cash flow information:
Disclosure of non-cash financing activites:
Distributions declared but not paid $ 1,020 $ 1,289 $ 542 $ 1,184 $ 4,035
11
COMPARATIVE PER SHARE DATA
The following tables present on a per share basis:
(a) Basic and diluted net income book value, and dividends declared for
FSP Corp. and each of the Target REITs on a historical basis.
(b) Consolidated pro forma basic and diluted net income per share, book
value per share and dividends per share for FSP Corp. This table
shows the effect of the mergers from the perspective of an owner of
one share of FSP common stock.
(c) Equivalent pro forma basic and diluted net income per share,
equivalent pro forma book value per share and equivalent pro forma
dividends per share for each of the Target REITs. This table shows
the effect of the mergers from the perspective of an owner of one
share of stock of a Target REIT. The consolidated pro forma data are
multiplied by the number of shares of FSP common stock issuable in
exchange for each share of target stock, also known as the exchange
ratio, as shown in the following table:
Target REIT Exchange Ratio
----------- --------------
Addison 5,948.67
Collins Crossing 6,167.63
Montague 5,649.72
Royal Ridge 6,055.79
The pro forma financial data and equivalent pro forma data are unaudited
and are not necessarily indicative of the operating results that would have been
achieved had the mergers occurred as of the beginning of the period and should
not be construed as representative of future operations.
FSP Corp. calculates historical book value per share by dividing
stockholders' equity by the number of shares of common stock (or preferred
stock, in the case of the Target REITs) outstanding at the end of each period.
FSP Corp. calculates consolidated pro forma net income per share data for
FSP Corp. as if the mergers occurred on January 1, 2004 and resulted in weighted
average shares of 60,523,000 for the year ended December 31, 2004.
FSP Corp. calculates consolidated pro forma book value per share data for
FSP Corp. as if the mergers occurred on December 31, 2004 and resulted in an
ending number of shares of 60,525,000.
FSP Corp. calculates consolidated pro forma dividends per share by adding
the total dividends declared by FSP Corp. plus dividends declared by the Target
REITs and dividing this sum by 60,525,000 shares, as shown in the following
table:
Dividends Declared
For the Year
Ended
(in thousands) December 31, 2004
-------------------------------------------------------
FSP Corp. $ 61,536
Addison Circle 5,245
Collins Crossing 4,775
Montague 4,016
Royal Ridge 2,152
----------
Total $ 77,724
==========
12
COMPARATIVE PER SHARE DATA
FSP Corp. calculates equivalent pro forma net income per share for each
Target REIT by multiplying the consolidated pro forma net income per share by
the exchange ratio.
FSP Corp. calculates equivalent pro forma book value per share for each
Target REIT by multiplying the consolidated pro forma book value per share by
the exchange ratio.
FSP Corp. calculates equivalent pro forma dividends per share for each
Target REIT by multiplying the consolidated pro forma dividends per share by the
exchange ratio.
For the purposes of the consolidated pro forma net income per share and
book value per share data, FSP Corp.'s historical financial data have been
consolidated with the Target REITs' financial data.
13
Franklin Street Properties Corp.
Comparative Per Share Data
As of and for the year ended
December 31, 2004
(Unaudited)
Pro forma Pro forma
Historical Consolidated Equivalent
------------------------------------------
Net income per share
basic and diluted
FSP Corp. $ 0.96 $ 0.95 $ --
Montague 7,530 -- 5,367
Addison Circle 6,506 -- 5,651
Royal Ridge 4,235 -- 5,753
Collins Crossing 5,505 -- 5,859
Book value per share
FSP Corp. $ 10.14 $10.89 $ --
Montague 76,581 -- 61,525
Addison Circle 82,083 -- 64,781
Royal Ridge 78,998 -- 65,948
Collins Crossing 80,506 -- 67,165
Dividends declared per share
FSP Corp. $ 1.24 $ 1.28 $ --
Montague 12,023 -- 7,232
Addison Circle 8,246 -- 7,614
Royal Ridge 7,233 -- 7,751
Collins Crossing 8,603 -- 7,895
14