Exhibit 99.1
PRESS RELEASE Franklin Street Properties Corp.
- --------------------------------------------------------------------------------
401 Edgewater Place o Suite 200 o Wakefield, Massachusetts 01880-6210
(781) 557-1300 o www.franklinstreetproperties.com
Contact: Donna Brownell 877-686-9496 FOR IMMEDIATE RELEASE
FRANKLIN STREET PROPERTIES CORP. ANNOUNCES
RECORD 2006 EARNINGS
Wakefield, MA--February 20, 2007--Franklin Street Properties Corp. (the
"Company" or "FSP") (AMEX: FSP) announced today record Net Income and Earnings
Per Share (EPS) for the year ended December 31, 2006. The Company also announced
increased Adjusted Funds From Operations (AFFO) over 2005, record AFFO plus
Gains on Sales (AFFO+GOS) and provided an update on other activities.
The Company evaluates its performance based on Net Income, EPS, AFFO and
AFFO+GOS, and believes each is an important measure. A reconciliation of Net
Income to AFFO and AFFO+GOS, which are non-GAAP financial measures, is provided
on page 3 of this press release.
(in 000's except per share data) Three Months Ended December 31, Year Ended December 31,
------------------------------- --------------------------------
2006 2005 Increase 2006 2005 Increase
---- ---- -------- ---- ---- --------
Net Income ........................ $39,482 $28,424 $11,058 $110,929 $75,116 $35,813
=============================== ================================
AFFO .............................. $20,320 $16,934 $ 3,386 $ 79,987 $64,970 $15,017
GOS ............................... 26,969 17,232 9,737 61,438 30,493 30,945
------------------------------- --------------------------------
AFFO+GOS .......................... $47,289 $34,166 $13,123 $141,425 $95,463 $45,962
=============================== ================================
Per Share Data:
EPS ............................... $ 0.56 $ 0.47 $ 0.09 $ 1.65 $ 1.32 $ 0.33
AFFO .............................. $ 0.29 $ 0.28 $ 0.01 $ 1.19 $ 1.14 $ 0.05
AFFO+GOS .......................... $ 0.67 $ 0.57 $ 0.10 $ 2.11 $ 1.68 $ 0.43
Weighted ave shares (diluted) ..... 70,766 60,259 10,507 67,159 56,847 10,312
------------------------------- --------------------------------
George J. Carter, President and CEO, commented as follows:
"FSP is a real estate investment company that has three major components to its
profitability.
1. Rental income from properties
2. Gains or losses on sales of properties
3. Fee income from real estate investment banking activities
Because property sales and investment banking are transactional sources of
business, their contribution from quarter-to-quarter can be quite variable.
Consequently, FSP management believes that a much more meaningful view of
financial performance and potential future performance can be ascertained from
annual financial results. Our 2006 financial performance metrics, which we
believe to be most important when evaluating FSP, follow."
-more-
-2-
(in 000's except per Share amounts, which are fully diluted)
Year ended December 31,
-----------------------
2006 2005 FSP Closing Share Prices:
---- ---- -------------------------
Increase in Shareholders' Equity per share $ 1.97 $ 0.92 12/31/06 $21.05
Dividend paid per share 1.24 1.24 12/31/05 $20.95
=======================
Total $ 3.21 $ 2.16 12/31/04 N/A
=======================
Total as a percentage of 12/31/05 closing price 15.3% N/A
=======================
% Increase Multiple on
Over 21.05
2006 results 31-Dec-06 31-Dec-05 Prior Year Share Price
--------- --------- ---------- -----------
Per share amounts:
EPS (net income) ................................ $ 1.65 $ 1.32 25.0% 12.8
AFFO ............................................ $ 1.19 $ 1.14 4.4% 17.7
GOS (Gain on sales of assets) ................... $ 0.91 $ 0.54 68.5% 23.1
AFFO + GOS ...................................... $ 2.11 $ 1.68 25.6% 10.0
AFFO plus appreciation realized on assets sold .. $ 1.87 $ 1.42 31.7% 11.3
Shareholders' Equity per share .................. $ 13.03 $ 11.06 17.8% 1.6
====================================================
Cash and certificate of deposit $ 75,116 $ 69,715 7.7%
========================================
Permanent Debt $ 0.00 $ 0.00 0.0%
========================================
"As we begin 2007, I continue to be confident that FSP's financial position is
strong, competitive and flexible within the broader capital and real estate
markets, and anticipate continued growth and performance from our three major
business components."
Discussion of results:
The following significant factors affected Net Income, EPS, AFFO and AFFO+GOS
for the three months and year ended December 31, 2006 compared to results for
the same periods in 2005:
o Gains on sale of properties including a provision for loss on an asset
held for sale during the three months and year ended December 31, 2006 was
$27.0 million and $61.4 million, respectively. Net gains on the sale of
properties during the three months and year ended December 31, 2005 was
$17.2 million and $30.5 million, respectively.
o Increased net operating income from the real estate portfolio included:
- The benefits of four properties acquired by merger in April 2005 and
five properties acquired by merger in April 2006, which were
accretive to our per share calculations.
- The benefits of two suburban office properties acquired directly in
2005 and three suburban office properties acquired directly in 2006.
- Lease termination payments received of $0.8 million and $7.5 million
during the three months and year ended December 31, 2006,
respectively, compared to $0.2 million and $1.0 million for the
three months and year ended December 31, 2005. Except for a lease
which expired at December 31, 2006, a substantial amount of the
space at the related properties was re-leased.
o Greater investment banking results compared to the same periods in 2005.
Gross proceeds on the sale of securities, which our revenue and expenses
in investment banking are directly related to, was $170.2 million for the
year ended December 31, 2006 compared to $138.8 million for 2005. This was
an increase of $36.5 million and $31.4 million for the three months and
year ended December 31, 2006, respectively, compared to the same periods
in 2005.
-more-
-3-
o Interest income increased $0.4 million and $1.4 million in the three
months and year ended December 31, 2006, respectively, compared to the
same periods in 2005 as a result of higher bank balances during the
periods and rising interest rates.
o General and administrative costs increased $0.9 million and $1.1 million
for the three months and year ended December 31, 2006, compared to the
same periods in 2005. The increase was primarily from compensation and
other costs relating to merger, acquisition and disposition activity and
monitoring and managing a larger portfolio of properties.
o A net increase of 10.5 million and 10.3 million weighted average shares
for the three months and year ended December 31, 2006, respectively,
compared to 2005 due to the merger completed on April 30, 2006.
A reconciliation of Net Income to AFFO, AFFO+GOS and AFFO plus appreciation
realized on assets sold is shown below, and definitions of AFFO, AFFO+GOS and
AFFO plus appreciation realized on assets sold are provided on Supplemental
Schedule F. We believe AFFO is used broadly throughout the REIT industry as a
measurement of performance and is generally calculated in a similar manner to
our calculation. We also believe that AFFO+GOS and AFFO plus appreciation
realized on assets sold are important measures as they consider investment
performance.
Three Months Ended Year Ended
December 31, December 31,
----------------------- ------------------------
(In thousands except per share amounts) 2006 2005 2006 2005
---- ---- ---- ----
Net income $ 39,482 $ 28,424 $ 110,929 $ 75,116
Net gains on sales of assets and
provision on one asset held for sale (26,969) (17,232) (61,438) (30,493)
GAAP income from non-consolidated REITs (131) (121) (1,043) (1,418)
Distributions from non-consolidated REITs 59 130 783 1,217
Depreciation of real estate & intangible amortization 8,684 6,258 32,090 22,240
Straight-line rent (805) (525) (1,334) (1,692)
----------------------- ------------------------
Adjusted Funds From Operations (AFFO) 20,320 16,934 79,987 64,970
Plus gains on sales of assets and
provision on one asset held for sale 26,969 17,232 61,438 30,493
----------------------- ------------------------
AFFO+GOS 47,289 34,166 141,425 95,463
Adjustment for appreciation realized on assets sold (8,330) (7,277) (15,605) (14,502)
----------------------- ------------------------
AFFO plus appreciation realized on assets sold $ 38,959 $ 26,889 $ 125,820 $ 80,961
======================= ========================
Per Share Data
EPS $ 0.56 $ 0.47 $ 1.65 $ 1.32
AFFO $ 0.29 $ 0.28 $ 1.19 $ 1.14
AFFO+GOS $ 0.67 $ 0.57 $ 2.11 $ 1.68
AFFO plus appreciation realized on assets sold $ 0.55 $ 0.45 $ 1.87 $ 1.42
Weighted average shares (basic and diluted) 70,766 60,259 67,159 56,847
======================= ========================
Dividend announcement
On January 19, 2007, the Board of Directors of the Company declared a cash
distribution of $0.31 per share of common stock payable on February 20, 2007 to
stockholders of record on January 31, 2007.
-more-
-4-
Real Estate and Investment Banking Update
During the fourth quarter we acquired a suburban office property in Broomfield,
Colorado with a total of approximately 241,000 square feet of rentable space.
The purchase was financed with proceeds from property sales. We sold two
suburban office properties located in Herndon, Virginia and North Andover,
Massachusetts with a total of 251,000 square feet. In December 2006, we reached
an agreement to sell a suburban office property in Greenville, South Carolina
with a total of 144,000 square feet of rentable space. The property was sold on
January 31, 2007 at a loss of approximately $4.9 million, which was provided for
in 2006. Supplementary Schedule D presents our continuing real estate portfolio
of 29 properties as of December 31, 2006. In January 2007 we commenced a new
syndication as part of our real estate investment banking activities with an
opportunity to place up to $221 million.
- --------------------------------------------------------------------------------
Today's news release, along with other news about Franklin Street Properties
Corp., is available on the Internet at www.franklinstreetproperties.com.
A conference call is scheduled for February 21, 2007 at 9:30 a.m. (ET) to
discuss the fourth quarter and year end 2006 results. The toll free number is
1-800-510-9661, passcode 43336594. Internationally, the call may be accessed by
dialing 1-617-614-3452, passcode 43336594. The call will also be available via a
live webcast, which can be accessed at least 10 minutes before the start time
through the Webcasts & Presentations section of our Investor Relations section
at www.franklinstreetproperties.com. A replay of the conference call will be
available on the Company's website one hour after the call.
About Franklin Street Properties Corp.
Franklin Street Properties Corp. is an investment firm specializing in real
estate based in Wakefield, Massachusetts, which 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. FSP owns an unleveraged portfolio of real estate.
The majority of FSP's property portfolio is suburban office buildings. FSP's
subsidiary, FSP Investments LLC (member, NASD and SIPC), is a real estate
investment banking firm and a registered broker/dealer. FSP is a Maryland
corporation that operates in a manner intended to qualify as a real estate
investment trust (REIT) for federal income tax purposes. To learn more about FSP
please visit our website at www.franklinstreetproperties.com.
Forward-Looking Statements
Statements made in this press release that state FSP's or management's
intentions, beliefs, expectations, or predictions for the future are
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 changes in 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 Quarterly Report on Form 10-Q for the three and nine months
ended September 30, 2006), 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 Item 1A of our Quarterly
Report on Form 10-Q for the three and nine months ended September 30, 2006 and
subsequent filings with the 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.
-more-
-5-
Franklin Street Properties
Earnings Release
Supplementary information
Table of contents
Franklin Street Properties Financial Results A-C
Real estate portfolio summary information D
Other supplementary information E
Definition of Adjusted Funds From Operations (AFFO),
AFFO+GOS and AFFO plus appreciation realized on assets sold F
-more-
-6-
Franklin Street Properties Financial Results
Supplementary Schedule A
Consolidated Income Statement
(Unaudited)
For the For the
Three Months Ended Year Ended
December 31, December 31,
- -------------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts) 2006 2005 2006 2005
=============================================================================================================
Revenue:
Rental $24,233 $17,271 $ 90,270 $57,693
Related party revenue:
Syndication fees 4,405 2,291 10,693 9,268
Transaction fees 4,714 2,524 11,262 9,412
Management fees and interest income from loans 1,005 205 2,083 1,807
Other 36 -- 60 --
- -------------------------------------------------------------------------------------------------------------
Total revenue 34,393 22,291 114,368 78,180
- -------------------------------------------------------------------------------------------------------------
Expenses:
Real estate operating expenses 6,505 4,180 20,845 12,330
Real estate taxes and insurance 3,701 2,670 13,220 8,568
Depreciation and amortization 6,487 3,998 22,819 12,503
Selling, general and administrative 2,734 1,851 8,518 7,448
Commissions 2,233 1,357 5,522 5,005
Interest 1,189 173 2,449 2,997
- -------------------------------------------------------------------------------------------------------------
Total expenses 22,849 14,229 73,373 48,851
- -------------------------------------------------------------------------------------------------------------
Income before interest income, equity in earnings of
non-consolidated REITs and taxes on income 11,544 8,062 40,995 29,329
Interest income 918 541 2,998 1,588
Equity in earnings of non-consolidated REITs 128 102 845 1,397
- -------------------------------------------------------------------------------------------------------------
Income before taxes on income 12,590 8,705 44,838 32,314
Income tax expense 567 125 839 422
- -------------------------------------------------------------------------------------------------------------
Income from continuing operations 12,023 8,580 43,999 31,892
Income from discontinued operations 490 2,612 5,492 12,731
Gains on asset sales including provision
for loss on asset held for sale 26,969 17,233 61,438 30,493
- -------------------------------------------------------------------------------------------------------------
Net income $39,482 $28,425 $110,929 $75,116
=============================================================================================================
Weighted average number of shares outstanding,
basic and diluted 70,766 60,259 67,159 56,847
=============================================================================================================
Earnings per share, basic and diluted, attributable to:
Continuing operations $ 0.17 $ 0.14 $ 0.66 $ 0.56
Discontinued operations 0.01 0.04 0.08 0.22
Gains on asset sales including provision
for loss on asset held for sale 0.38 0.29 0.91 0.54
- -------------------------------------------------------------------------------------------------------------
Net income per share, basic and diluted $ 0.56 $ 0.47 $ 1.65 $ 1.32
=============================================================================================================
-more-
-7-
Franklin Street Properties Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheet
(Unaudited)
(in thousands, except share and par value amounts) December 31,
-------------------------
2006 2005
---- ----
Assets:
Real estate investments, net $ 803,490 $ 444,936
Acquired real estate leases, less accumulated amortization
of $21,548 and $9,227, respectively 43,167 28,289
Investment in non-consolidated REITs 5,064 5,006
Assets held for sale 5,830 119,479
Cash & cash equivalents 69,973 69,715
Certificate of deposit maturing April 11, 2007 5,143 --
Restricted cash 761 461
Tenant rent receivables, less allowance for doubtful accounts
of $433 and $350, respectively 2,440 1,447
Straight-line rent receivable, less allowance for doubtful accounts
of $163 and $163, respectively 4,720 3,497
Prepaid expenses 972 805
Deposits on real estate assets 5,010 710
Other assets 1,118 489
Office computers and furniture, net of accumulated depreciation
of $851 and $729, respectively 375 311
Deferred leasing commissions, net of accumulated amortization
of $1,323, and $704, respectively 7,254 2,028
- --------------------------------------------------------------------------------------------------------
Total assets $ 955,317 $ 677,173
========================================================================================================
Liabilities and Stockholders' Equity:
Liabilities:
Accounts payable and accrued expenses $ 25,275 $ 11,583
Accrued compensation 2,643 1,891
Tenant security deposits 1,744 1,293
Acquired unfavorable real estate leases, less accumulated amortization
of $534, and $134, respectively 3,693 823
- --------------------------------------------------------------------------------------------------------
Total liabilities 33,355 15,590
- --------------------------------------------------------------------------------------------------------
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,
70,766,305 and 59,794,608 shares issued and outstanding, respectively 7 6
Additional paid-in capital 907,794 677,397
Treasury stock, 731,898 and 731,898 shares at cost, respectively (14,008) (14,008)
Earnings (distributions) in excess of accumulated earnings/distributions 28,169 (1,812)
- --------------------------------------------------------------------------------------------------------
Total stockholders' equity 921,962 661,583
- --------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 955,317 $ 677,173
========================================================================================================
-more-
-8-
Franklin Street Properties Financial Results
Supplementary Schedule C
Consolidated Statement of Cash Flows
(Unaudited)
(in thousands) December 31,
--------------------------
2006 2005
---- ----
Cash flows from operating activities:
Net income $ 110,929 $ 75,116
Adjustments to reconcile net income to net cash
provided by operating activities:
Gains on assets sold, net (61,438) (30,493)
Depreciation and amortization expense 24,951 17,937
Amortization of above market lease 7,138 4,310
Equity in earnings from non-consolidated REITs (1,043) (1,418)
Distributions from non-consolidated REITs 783 1,217
Increase to bad debt reserve 83 --
Shares issued as compensation -- 31
Changes in operating assets and liabilities:
Restricted cash (300) 572
Tenant rent receivables, net (1,076) (678)
Straight-line rents, net (1,334) (1,692)
Prepaid expenses and other assets, net (327) 586
Accounts payable and accrued expenses 1,174 (200)
Accrued compensation 752 1,186
Tenant security deposits 451 260
Payment of deferred leasing commissions (5,880) (1,560)
- ----------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 74,863 65,174
- ----------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Cash acquired through issuance of common stock in merger transaction 13,849 10,621
Purchase of real estate assets, office computers and
furniture, capitalized merger costs (159,351) (75,988)
Merger costs paid (838) (402)
Purchase of acquired favorable and unfavorable leases, net (6,801) (12,513)
Investment in certificate of deposit (5,143) --
Investment in non-consolidated REITs (4,137) (18)
Investment in assets held for syndication, net -- 59,532
Changes in deposits on real estate assets (4,300) (710)
Proceeds received on sale of real estate assets 173,183 112,030
- ----------------------------------------------------------------------------------------------------------
Net cash provided by investing activities 6,462 92,552
- ----------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Distributions to stockholders (80,948) (67,208)
Offering costs (119) --
Purchase of treasury shares -- (14,008)
Deferred financing costs -- (108)
Borrowings (repayments) under bank note payable, net -- (59,439)
- ----------------------------------------------------------------------------------------------------------
Net cash used for financing activities (81,067) (140,763)
- ----------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents 258 16,963
Cash and cash equivalents, beginning of period 69,715 52,752
- ----------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 69,973 $ 69,715
==========================================================================================================
-more-
-9-
Franklin Street Properties Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary
(Unaudited)
December 31, 2006
As of December 31,
--------------------------------
2006 2005
--------------- ---------------
Commercial real estate*
Number of properties 29 26
Square feet 5,148,490 3,978,264
Leased percentage 89% 92%
Residential real estate
Number of properties -- 1
Number of apartments -- 228
Square feet -- 231,363
Leased percentage -- 97%
Combined portfolio*
Number of properties 29 26
Square feet 5,148,490 4,209,627
Leased percentage 89% 92%
* Excluding asset held for sale
(Investment & square feet in 000's) As of December 31, 2006
----------------------------------------------------------------
# of % of Square % of
State Properties Investment* Portfolio Feet Portfolio
- ----- ---------- ----------- --------- ---- ---------
Texas 7 $218,322 27.2% 1,401 27.2%
Colorado 4 132,132 16.4% 791 15.4%
Georgia 2 104,185 13.0% 548 10.6%
Virginia 2 65,533 8.1% 433 8.4%
Missouri 2 58,694 7.3% 349 6.8%
Florida 1 51,641 6.4% 212 4.1%
California 3 40,617 5.1% 324 6.3%
Indiana 1 39,305 4.9% 205 4.0%
Illinois 1 33,972 4.2% 177 3.5%
Michigan 1 15,152 1.9% 215 4.2%
North Carolina 2 15,015 1.9% 172 3.3%
Washington 1 14,518 1.8% 117 2.3%
Massachusetts 1 9,033 1.1% 105 2.0%
Maryland 1 5,371 0.7% 99 1.9%
--------------------------------------- ----------------------
Total 29 $803,490 100.0% 5,148 100.0%
======================================= ======================
* Excluding asset held for sale
-more-
-10-
Franklin Street Properties Earnings Release
Supplementary Schedule E
(Unaudited)
December 31, 2006
Property by type:
(dollars & square feet As of December 31, 2006
in 000's) ---------------------------------------------------------------------------
# of % of Square % of
Type Properties Investment* Portfolio Feet Portfolio
- ---- ---------- ----------- --------- ---- ---------
Office 28 $798,119 99.3% 5,049 98.1%
Industrial 1 5,371 0.7% 99 1.9%
------------------------------------------ --------------------------
Total 29 $803,490 100.0% 5,148 100.0%
========================================== ==========================
* Excluding asset held for sale
Commercial portfolio lease expirations (1)
Total % of
Year Square Feet Portfolio
- ---- ----------- ---------
2007 526,269 10.2%
2008 496,639 9.6%
2009 632,936 12.3%
2010 729,969 14.2%
2011 250,264 4.9%
2012 634,050 12.3%
Thereafter 1,878,363 36.5%(2)
-------------------------------
5,148,490 100.0%
===============================
(1) Percentages are determined based upon square footage of expiring
commercial leases and exclude assets held for sale.
(2) Includes 589,000 square feet of current vacancies.
Year ending December 31,
------------------------------
(in thousands) 2006 2005
---- ----
Tenant improvements $13,471 $1,745
Deferred leasing costs 5,881 1,560
Building maintenance expenditures 1,308 1,015
Increase to investment in buildings 1,220 --
------------------------------
$21,880 $4,320
==============================
-more-
-11-
Franklin Street Properties Earnings Release
Supplementary Schedule F
Definition of Adjusted Funds From Operations ("AFFO"),
AFFO plus Gain on Sales ("AFFO+GOS") and
AFFO plus appreciation realized on assets sold
The Company evaluates the performance of its reportable segments based on
several measures including, Adjusted Funds From Operations ("AFFO"), AFFO plus
Gain on Sales ("AFFO+GOS") and AFFO plus appreciation realized on assets sold as
management believes they represent important measures of activity and are an
important consideration in determining distributions paid to equity holders. The
Company defines AFFO as: Net Income as computed in accordance with accounting
principles generally accepted in the United States of America ("GAAP");
excluding gains or losses on the sale of real estate and non-cash income from
Sponsored REITs; plus certain non-cash items included in the computation of Net
Income (depreciation and amortization and straight-line rent adjustments); plus
distributions received from Sponsored REITs; plus the net proceeds from the sale
of land; Depreciation and amortization, gain or loss on the sale of real estate
and straight-line rents are an adjustment to AFFO, as these are non-cash items
included in Net Income. The Company defines AFFO+GOS as AFFO as defined above,
plus gains and losses on sales of properties and provisions for assets held for
sale. The Company defines AFFO plus appreciation realized on assets sold as
AFFO+GOS as defined above excluding depreciation and amortization taken on
properties which have been sold or are held for sale.
AFFO, AFFO+GOS and AFFO plus appreciation realized on assets sold should not be
considered as alternatives to Net Income (determined in accordance with GAAP),
as indicators of the Company's financial performance, as alternatives to cash
flows from operating activities (determined in accordance with GAAP), or as
measures of the Company's liquidity, or are they necessarily indicative of
sufficient cash flow to fund all of the Company's needs. Other real estate
companies may define these terms in a different manner. We believe that in order
to facilitate a clear understanding of the results of the Company, AFFO,
AFFO+GOS and AFFO plus appreciation realized on assets sold should be examined
in connection with Net Income and cash flows from operating, investing and
financing activities in the consolidated financial statements.