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Franklin Street Properties Corp. Announces Second Quarter 2010 Results
03 Aug, 2010 @ 04:01 pm EDT
WAKEFIELD, MA -- (Marketwire) -- 08/03/10 -- Franklin Street Properties Corp. (the "Company," "FSP," "we" or "our") (NYSE Amex: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $16.7 million or $0.21 per share for the second quarter ended June 30, 2010. The Company also announced Net Income of $6.0 million and Earnings Per Share (EPS) of $0.07 for the second quarter and provided an update on other activities.
The Company evaluates its performance based on Net Income, EPS, FFO, Gains on Sales (GOS) and FFO+GOS, and believes each is an important measure. A reconciliation of Net Income to FFO and FFO+GOS, which are non-GAAP financial measures, is provided on page 4 of this press release.
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- -----------------------------
(in 000's
except per Increase Increase
share data) 2010 2009 (Decrease) 2010 2009 (Decrease)
--------- --------- -------- --------- --------- --------
Net Income $ 5,954 $ 4,865 $ 1,089 $ 11,516 $ 12,673 $ (1,157)
========= ========= ======== ========= ========= ========
FFO $ 16,702 $ 17,409 $ (707) $ 33,352 $ 34,747 $ (1,395)
GOS - - - - - -
--------- --------- -------- --------- --------- --------
FFO+GOS $ 16,702 $ 17,409 $ (707) $ 33,352 $ 34,747 $ (1,395)
========= ========= ======== ========= ========= ========
Per Share Data:
EPS $ 0.07 $ 0.07 $ - $ 0.14 $ 0.18 $ (0.04)
FFO $ 0.21 $ 0.25 $ (0.04) $ 0.42 $ 0.49 $ (0.07)
GOS $ - $ - $ - $ - $ - $ -
FFO+GOS $ 0.21 $ 0.25 $ (0.04) $ 0.42 $ 0.49 $ (0.07)
Weighted
average shares
(diluted) 79,681 70,481 9,200 79,681 70,481 9,200
--------- --------- -------- --------- --------- --------
Comparing results for the second quarter of 2010 to 2009, Net Income and EPS increased $1.1 million and was flat per share; and FFO decreased $0.7 million or $0.04 per share. The decrease in FFO was primarily attributable to a decrease in real estate FFO of $1.3 million and was partially offset by an increase in investment banking FFO of $0.6 million. The decrease in real estate FFO was primarily a result of decreased occupancy in the real estate portfolio during the second quarter of 2010 compared to the second quarter of 2009; and $0.2 million from decreases in distributions received from investments in our non-consolidated REITs. The increase in investment banking FFO resulted from greater sales of securities by our investment bank, which were $8.4 million in the second quarter of 2010 as compared to $0.4 million by our investment bank for the second quarter of 2009. Revenue from our investment bank is primarily based on the value of securities sales. There was no GOS during the second quarter of 2010 or 2009.
Comparing results for the first half of 2010 to 2009, Net Income and EPS decreased $1.2 million or $0.04 per share; and FFO decreased $1.4 million or $0.07 per share. The decrease in FFO was primarily attributable to a decrease in real estate FFO of $2.3 million and was partially offset by an increase in investment banking FFO of $0.9 million. The decrease in real estate FFO was primarily a result of decreased occupancy in the real estate portfolio during the first half of 2010 compared to the first half of 2009; and $0.4 million from decreases in distributions received from investments in our non-consolidated REITs. The increase in investment banking FFO resulted from greater sales of securities by our investment bank, which were $10.4 million during the first half of 2010 as compared to $0.6 million by our investment bank for the first half of 2009. Revenue from our investment bank is primarily based on the value of securities sales. There was no GOS during the first half of 2010 or 2009.
George J. Carter, President and CEO, commented as follows:
"For the second quarter of 2010, FSP's profits as represented by FFO + GOS totaled approximately $16.7 million or $0.21 per share, essentially flat compared to the first quarter of 2010. Dividend distributions declared for the second quarter of 2010, which are payable on August 20, 2010, will be approximately $15.1 million or $0.19 per share.
For 2010, FSP's profit results may have more quarter-to-quarter variability than 2009. The transactional nature, success and timing of our re-leasing efforts of existing vacancy and lease-roll in the portfolio will interplay with the timing of new property acquisitions and the capital closings of private placement offerings through our investment bank to affect FFO levels.
Our real estate portfolio was approximately 85% leased as of June 30, 2010 and approximately 84% leased as of December 31, 2009. Several properties in our portfolio have significant lease roll scheduled to occur during the remainder of 2010 and, as a consequence, we expect occupancy and rental income for those properties to be lower in 2010. However, we believe that we will be successful in re-leasing all or some portion of that vacated space in 2010 and, during the second quarter, we saw significant prospective tenant interest at most of those properties. Successful re-leasing efforts during the remainder of 2010 would favorably position us going into 2011, as more modest scheduled lease expirations of approximately 7%, 8% and 8% of our square footage are projected in 2011, 2012 and 2013, respectively.
Property acquisition efforts in the second quarter of 2010 culminated in the purchase on June 29 of two office buildings totaling approximately 470,000 square feet, located in the Central Business District of Minneapolis, Minnesota. The buildings were acquired for a purchase price of $40.5 million, are adjacent to one another and are approximately 90% leased to a diverse group of tenants with TCF National Bank leasing approximately 54% of the combined property. The buildings were purchased for approximately $85 per square foot (a price we believe to be well under replacement cost), at an approximate 8.8% cap-rate of in-place net operating income. The smaller of the two buildings is a four-story structure occupying what we believe to be one of the best potential future new office tower development locations in the city. Because the property was acquired close to the end of the second quarter, its first significant contribution to FSP's rental income stream will not occur until the third quarter of 2010. The Company continues to work on additional property acquisitions and we would anticipate current and future efforts to produce additional acquisitions of properties for the FSP portfolio this year. New property acquisitions, when completed, are anticipated to provide additional accretive rental income to the FSP profit picture.
During the second quarter of 2010, our Investment Banking Group placed approximately $8.4 million of equity in two different private placement syndications. Both of these offerings are now fully subscribed and closed. There are currently no private placement real estate investment offerings that are open. Our Investment Banking Group operated at about breakeven for the quarter generating net income of approximately $263,000. While we believe that general investor confidence and interest in commercial real estate investing continues to slowly improve, capital-raising efforts over any specific period of time remain choppy and unpredictable. In addition, the timing of property acquisition opportunities that could be attractive for our syndication business is unpredictable. For full year 2009, our Investment Banking Group raised equity capital totaling about $40.4 million. For the first six months of 2010, the group has raised approximately $10.4 million, compared to $550,000 for the same period in 2009. While we are still optimistic that business for full year 2010 will show an increase over 2009, sourcing and securing the right real estate investment opportunities will likely be the controlling factor.
FSP did not have any of its properties listed for sale during the second quarter of 2010. Generally speaking, we continue to find the property sales environment challenged relative to both liquidity and pricing. However, we continue to witness improving pricing and liquidity in certain markets, extending a trend that began in the second half of 2009. Nationwide, the number of completed commercial real estate transactions still remains low by historical standards. We believe that both improving office property fundamentals as well as plentiful and attractive financing availability will likely be required to meaningfully improve the market place for property dispositions. Since this is an important part of our total return strategy, we intend to be active in property dispositions once the real estate cycle more fully establishes a pattern of improvement.
We believe FSP continues to be in an excellent environment to position itself for meaningful future growth in profits and dividends. Our company will continue to use its capabilities and conservative financial structure to take advantage of real estate investment opportunities that are presenting themselves as a result of the current cyclical downturn in the economy and commercial property market. We are looking forward to the second half of 2010 with optimism."
Dividend Announcement
On July 16, 2010, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended June 30, 2010 of $0.19 per share of common stock payable on August 20, 2010 to stockholders of record on July 30, 2010.
Real Estate Update
Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 33 properties and for three non-consolidated REITs that we have interests in as of June 30, 2010. The Company will also be filing a supplemental information package that will provide stockholders and the financial community with additional operating and financial data. The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com.
A reconciliation of Net Income to FFO and FFO+GOS is shown below and definitions of FFO and FFO+GOS are provided on Supplementary Schedule H. We believe FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance and is generally calculated in a similar manner to our calculation. We also believe that FFO+GOS is an important measure as it considers investment performance.
Reconciliation of Net Income to FFO
and FFO+GOS: Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
(In thousands, except per share
amounts) 2010 2009 2010 2009
Net income $ 5,954 $ 4,865 $ 11,516 $ 12,673
(Gain) Loss on sale of properties - - - -
GAAP income from non-consolidated
REITs (380) (443) (633) (1,235)
Distributions from
non-consolidated REITs 1,324 1,523 2,731 3,138
Acquisition costs of new
properties 129 248 129 248
Depreciation of real estate &
intangible amortization 9,675 11,216 19,609 19,923
-------- -------- -------- --------
Funds From Operations (FFO) 16,702 17,409 33,352 34,747
Plus gains on sales of properties - - - -
-------- -------- -------- --------
FFO+GOS $ 16,702 $ 17,409 $ 33,352 $ 34,747
======== ======== ======== ========
Per Share Data
EPS $ 0.07 $ 0.07 $ 0.14 $ 0.18
FFO $ 0.21 $ 0.25 $ 0.42 $ 0.49
GOS $ - $ - $ - $ -
FFO+GOS $ 0.21 $ 0.25 $ 0.42 $ 0.49
Weighted average shares (basic and
diluted) 79,681 70,481 79,681 70,481
======== ======== ======== ========
Today's news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com. We routinely post information that may be important to investors in the Investor Relations section of our website. We encourage investors to consult that section of our website regularly for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted, to sign up for E-mail Alerts.
A conference call is scheduled for August 4, 2010 at 10:00 a.m. (ET) to discuss the second quarter 2010 results. To access the call, please dial 1-888-873-4896, passcode 39156828. Internationally, the call may be accessed by dialing 1-617-213-8850, passcode 39156828. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website, www.franklinstreetproperties.com at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.
About Franklin Street Properties Corp.
Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on achieving current income and long-term growth through investments in commercial properties. FSP operates in two business segments: real estate operations and investment banking/investment services. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. FSP's subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and a registered broker/dealer. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website 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 may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, changes in the demand by investors for investment in Sponsored REITs (as defined in our Annual Report on Form 10-K for the year ended December 31, 2009), risks of a lessening of demand for the types of real estate owned by us, changes in government regulations, and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the "Risk Factors" set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2009, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.
Franklin Street Properties Corp.
Earnings Release
Supplementary information
Table of Contents
Franklin Street Properties Corp. Financial Results A-C
Real Estate Portfolio Summary Information D
Portfolio and Other Supplementary Information E
Quarterly Information F
Percentage of Leased Space G
Largest 20 Tenants - FSP Owned Portfolio H
Definition of Funds From Operations (FFO) and FFO+GOS I
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income Statements
(Unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ------------------
(in thousands, except per share
amounts) 2010 2009 2010 2009
========= ======== ======== ========
Revenue:
Rental $ 29,261 $ 29,254 $ 60,060 $ 59,072
Related party revenue:
Syndication fees 541 29 662 39
Transaction fees 753 514 899 542
Management fees and interest
income from loans 558 317 1,091 862
Other 6 18 15 36
--------- -------- -------- --------
Total revenue 31,119 30,132 62,727 60,551
--------- -------- -------- --------
Expenses:
Real estate operating expenses 7,358 7,144 15,331 14,424
Real estate taxes and insurance 4,318 4,686 9,564 9,515
Depreciation and amortization 9,243 10,225 18,462 18,139
Selling, general and
administrative 2,559 2,127 4,730 4,135
Commissions 336 40 450 170
Interest 1,736 1,599 3,388 3,176
--------- -------- -------- --------
Total expenses 25,550 25,821 51,925 49,559
--------- -------- -------- --------
Income before interest income,
equity in earnings of
non-consolidated REITs and taxes 5,569 4,311 10,802 10,992
Interest income 9 36 17 72
Equity in earnings of
non-consolidated REITs 380 443 633 1,235
--------- -------- -------- --------
Income before taxes on income 5,958 4,790 11,452 12,299
Taxes on income 4 (75) (64) (374)
--------- -------- -------- --------
Net income $ 5,954 $ 4,865 $ 11,516 $ 12,673
========= ======== ======== ========
Weighted average number of shares
outstanding, basic and diluted 79,681 70,481 79,681 70,481
========= ======== ======== ========
Net income per share, basic and
diluted $ 0.07 $ 0.07 $ 0.14 $ 0.18
========= ======== ======== ========
Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and par value June 30, December 31,
amounts) 2010 2009
----------- -----------
Assets:
Real estate assets, net $ 935,530 $ 921,833
Acquired real estate leases, less accumulated
amortization of $20,154 and $34,592, respectively 56,431 44,757
Investment in non-consolidated REITs 90,782 92,910
Assets held for syndication, net - 4,827
Cash and cash equivalents 21,487 27,404
Restricted cash 59 334
Tenant rent receivables, less allowance for
doubtful accounts of $1,100 and $620, respectively 900 1,782
Straight-line rent receivable, less allowance for
doubtful accounts of $700 and $100, respectively 14,955 10,754
Prepaid expenses 2,280 2,594
Related party mortgage loan receivable 46,270 36,535
Other assets 1,248 844
Office computers and furniture, net of
accumulated depreciation of $1,306 and $1,233,
respectively 372 384
Deferred leasing commissions, net of accumulated
amortization of $5,845, and $4,995, respectively 16,587 10,808
----------- -----------
Total assets $ 1,186,901 $ 1,155,766
=========== ===========
Liabilities and Stockholders' Equity:
Liabilities:
Bank note payable $ 162,968 $ 109,008
Term loan payable 75,000 75,000
Accounts payable and accrued expenses 18,766 23,787
Accrued compensation 1,040 1,416
Tenant security deposits 2,004 1,808
Other liabilities: derivative termination value 1,735 2,076
Acquired unfavorable real estate leases, less
accumulated amortization of $2,765, and $2,492,
respectively 6,536 5,397
----------- -----------
Total liabilities 268,049 218,492
----------- -----------
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, 79,680,705 and 79,680,705
shares issued and outstanding, respectively 8 8
Additional paid-in capital 1,003,712 1,003,713
Accumulated other comprehensive loss (1,735) (2,076)
Accumulated distributions in excess of
accumulated earnings (83,133) (64,371)
----------- -----------
Total stockholders' equity 918,852 937,274
----------- -----------
Total liabilities and stockholders' equity $ 1,186,901 $ 1,155,766
=========== ===========
Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months
Ended June 30,
------------------------
(in thousands) 2010 2009
----------- -----------
Cash flows from operating activities:
Net income $ 11,516 $ 12,673
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense 18,597 18,276
Amortization of above market lease 1,147 1,780
Equity in earnings of non-consolidated REITs (633) (1,235)
Distributions from non-consolidated REITs 2,731 3,137
Increase in bad debt reserve 480 111
Changes in operating assets and liabilities:
Restricted cash 275 1
Tenant rent receivables, net 402 498
Straight-line rents, net (1,759) (444)
Prepaid expenses and other assets, net (224) (943)
Accounts payable and accrued expenses (4,139) 482
Accrued compensation (376) (1,154)
Tenant security deposits 196 (109)
Payment of deferred leasing commissions (7,085) (1,557)
----------- -----------
Net cash provided by operating
activities 21,128 31,516
----------- -----------
Cash flows from investing activities:
Purchase of real estate assets, office
computers and furniture (45,848) (56,135)
Changes in deposits on real estate assets - 1,300
Investment in non-consolidated REITs - (13,198)
Investment in related party mortgage loan
receivable (9,735) (10,990)
Investment in assets held for syndication, net 4,858 13,017
----------- -----------
Net cash used in investing activities (50,725) (66,006)
----------- -----------
Cash flows from financing activities:
Distributions to stockholders (30,279) (26,782)
Proceeds from equity offering, net (1) -
Borrowings under bank note payable 53,960 56,570
----------- -----------
Net cash provided by financing
activities 23,680 29,788
----------- -----------
Net decrease in cash and cash equivalents (5,917) (4,702)
Cash and cash equivalents, beginning of period 27,404 29,244
----------- -----------
Cash and cash equivalents, end of period $ 21,487 $ 24,542
=========== ===========
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary Information
(Unaudited & Approximated)
Commercial portfolio lease expirations (1)
As of June 30, 2010
Total % of
Year Square Feet Portfolio
2010 534,650 8.3%
2011 474,992 7.4%
2012 499,704 7.8%
2013 519,238 8.1%
2014 587,387 9.1%
2015 776,152 12.1%
Thereafter (2) 3,026,712 47.2%
------------ -----------
6,418,835 100.0%
============ ===========
(1) Percentages are determined based upon square footage of expiring
commercial leases.
(2) Includes 940,768 square feet of current vacancies.
(dollars & square feet in
000's) As of June 30, 2010
-------------------------------------------------
# of % of Square % of
State Properties Investment Portfolio Feet Portfolio
Texas 7 $ 225,711 24.1% 1,489 23.2%
Virginia 5 160,781 17.2% 942 14.7%
Colorado 4 126,578 13.5% 791 12.3%
Georgia 1 74,475 8.0% 387 6.0%
Missouri 3 71,224 7.6% 477 7.5%
Maryland 2 60,857 6.5% 424 6.6%
Minnesota 2 38,320 4.1% 628 9.8%
Florida 1 47,588 5.1% 213 3.3%
Indiana 1 36,136 3.8% 205 3.2%
Illinois 1 29,446 3.1% 177 2.8%
California 2 21,262 2.3% 182 2.8%
Michigan 1 14,674 1.6% 215 3.3%
Washington 1 14,534 1.6% 117 1.8%
North Carolina 2 13,944 1.5% 172 2.7%
--------- --------- -------- --------- --------
33 $ 935,530 100.0% 6,419 100.0%
========= ========= ======== ========= ========
Property by type: As of June 30, 2010
(dollars & square feet -------------------------------------------------
in 000's) # of % of Square % of
Type Properties Investment Portfolio Feet Portfolio
Office 32 $ 930,562 99.5% 6,320 98.5%
Industrial 1 4,968 0.5% 99 1.5%
--------- --------- -------- --------- --------
33 $ 935,530 100.0% 6,419 100.0%
========= ========= ======== ========= ========
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
Capital Expenditures
Owned Portfolio Six Months Ended
-------------------
(in thousands) 30-Jun-10 30-Jun-09
Tenant improvements $ 2,240 $ 2,286
Deferred leasing costs 7,085 1,557
Building improvements 878 581
--------- ---------
$ 10,203 $ 4,424
========= =========
Square foot & leased percentages June 30, December 31,
---------- ----------
2010 2009
---------- ----------
Owned portfolio of commercial real estate
Number of properties 33 32
Square feet 6,418,835 5,942,414
Leased percentage 85% 84%
Investments in non-consolidated commercial real
estate
Number of properties 3 3
Square feet 1,998,519 1,995,041
Leased percentage 77% 78%
Single Asset REITs (SARs) managed
Number of properties 11 11
Square feet* 2,406,370 2,406,370
Leased percentage* 76% 91%
Total owned, investments & managed properties
Number of properties 47 46
Square feet* 10,823,724 10,343,825
Leased percentage* 82% 85%
* Excludes a property under construction with approximately 285,000 square
feet.
The following table shows property information for our investments in
non-consolidated REITs:
Single Asset REIT Square % Leased % Interest
name City State Feet 30-Jun-10 Held
FSP 303 East
Wacker Drive
Corp. Chicago IL 847,559 75.2% 43.7%
FSP Grand
Boulevard Corp. Kansas City MO 532,453 89.5% 27.0%
FSP Phoenix Tower
Corp. Houston TX 618,507 68.2% 4.6%
--------- ----------
1,998,519 76.8%
--------- ----------
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F: Quarterly Information
(Unaudited)
(in 000's)
Q1 Q1 Q2 Q3
Revenue: 2010 2009 2009 2009
-------- -------- -------- --------
Rental $ 30,799 $ 29,818 $ 29,254 $ 31,702
Related party revenue:
Syndication fees 121 10 29 -
Transaction fees 146 28 514 1
Management fees and
interest income from loans 533 545 317 370
Other 9 18 18 19
-------- -------- -------- --------
Total revenue 31,608 30,419 30,132 32,092
-------- -------- -------- --------
Expenses:
Real estate operating expenses 7,973 7,280 7,144 7,752
Real estate taxes and insurance 5,246 4,829 4,686 5,364
Depreciation and amortization 9,219 7,914 10,225 8,801
Selling, general and
administrative 2,171 2,008 2,127 2,243
Commissions 114 130 40 8
Interest 1,652 1,577 1,599 1,744
-------- -------- -------- --------
Total expenses 26,375 23,738 25,821 25,912
-------- -------- -------- --------
Income before interest income,
equity in earnings in
non-consolidated REITs 5,233 6,681 4,311 6,180
Interest income 8 36 36 16
Equity in earnings in
non-consolidated REITs 253 792 443 475
-------- -------- -------- --------
Income before taxes on income 5,494 7,509 4,790 6,671
Taxes on income (68) (299) (75) (270)
-------- -------- -------- --------
Net income $ 5,562 $ 7,808 $ 4,865 $ 6,941
======== ======== ======== ========
FFO and FFO+GOS calculations:
Net income $ 5,562 $ 7,808 $ 4,865 $ 6,941
-------- -------- -------- --------
(Gain) Loss on sale of assets - - - -
GAAP income from non-consolidated
REITs (253) (792) (443) (475)
Distributions from
non-consolidated REITs 1,407 1,615 1,523 1,119
Acquisition costs - - 248 391
Depreciation & amortization 9,934 8,707 11,216 9,561
-------- -------- -------- --------
Funds From Operations (FFO) 16,650 17,338 17,409 17,537
Plus gains on sales of assets - - - -
-------- -------- -------- --------
FFO+GOS $ 16,650 $ 17,338 $ 17,409 $ 17,537
======== ======== ======== ========
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Percentage of Leased Space
(Unaudited & Estimated)
(1) (2) (1) (2)
% Q1 % Q2
Leased Average Leased Average
Square as Square as Square
Feet of 31- Feet of 30- Feet
Property Name Location 30-Jun-10 Mar-10 Leased Jun-10 Leased
-------------- --------------- --------- ----- ----- ----- -----
1 Park Seneca Charlotte, NC 109,550 85.1% 85.2% 84.4% 84.8%
2 Hillview
Center Milpitas, CA 36,288 100.0% 100.0% 100.0% 100.0%
3 Southfield
Centre Southfield, MI 214,697 55.7% 55.6% 56.4% 55.9%
4 Bollman Place Savage, MD 98,745 100.0% 100.0% 100.0% 100.0%
5 Forest Park Charlotte, NC 62,212 100.0% 100.0% 100.0% 100.0%
6 Centennial Colorado
Springs, CO 110,730 78.5% 78.5% 78.5% 78.5%
7 Meadow Point Chantilly, VA 138,538 51.5% 50.7% 80.6% 70.9%
8 Timberlake Chesterfield, MO 232,766 99.0% 99.0% 99.0% 99.0%
9 Federal Way Federal Way, WA 117,010 26.1% 26.1% 28.3% 26.9%
10 Northwest Elk Grove
Point Village, IL 176,848 100.0% 100.0% 100.0% 100.0%
11 Timberlake East Chesterfield, MO 116,197 100.0% 100.0% 100.0% 100.0%
12 Park Ten Houston, TX 155,715 66.0% 63.4% 49.8% 54.8%
13 Montague San Jose, CA 145,951 100.0% 100.0% 100.0% 100.0%
14 Addison Addison, TX 293,787 61.3% 61.3% 92.7% 71.8%
15 Collins
Crossing Richardson, TX 298,766 100.0% 100.0% 100.0% 100.0%
16 Greenwood
Plaza Englewood, CO 199,077 100.0% 100.0% 30.6% 53.7%
17 River Crossing Indianapolis, IN 205,059 94.7% 94.7% 94.7% 94.7%
18 Liberty Plaza Addison, TX 218,934 77.8% 74.4% 78.0% 77.7%
19 Innsbrook Glen Allen, VA 303,745 34.7% 25.4% 31.3% 31.3%
20 380 Interlocken Broomfield, CO 240,184 87.0% 87.0% 89.7% 88.8%
21 Blue Lagoon Miami, FLA 212,619 100.0% 100.0% 100.0% 100.0%
22 Eldridge Green Houston, TX 248,399 100.0% 100.0% 100.0% 100.0%
23 Willow Bend Plano, TX 116,622 49.8% 49.8% 49.8% 49.8%
24 One Overton
Park Atlanta, GA 387,267 90.3% 90.3% 91.5% 91.0%
25 390 Interlocken Broomfield, CO 241,516 98.5% 98.5% 98.3% 98.3%
26 East Baltimore Baltimore, MD 325,445 94.4% 94.7% 95.3% 95.3%
27 Park Ten
Phase II Houston, TX 156,746 97.8% 97.8% 97.8% 97.8%
28 Lakeside Maryland
Crossing I Heights, MO 127,778 100.0% 100.0% 100.0% 100.0%
29 Loudoun Tech Dulles, VA 135,888 100.0% 100.0% 100.0% 100.0%
30 4807 Stonecroft Chantilly, VA 111,469 100.0% 100.0% 100.0% 100.0%
31 Eden Bluff Eden Prairie, MN 153,028 100.0% 100.0% 100.0% 100.0%
32 3150 Fairview
Park Drive Falls Church, VA 252,613 100.0% 100.0% 100.0% 100.0%
33 121 South 8th
Street (3) Minneapolis, MN 474,646 n/a n/a 89.8% 89.8%
--------- ----- ----- ----- -----
6,418,835 85.4% 84.7% 85.3% 84.6%
========= ===== ===== ===== =====
(1) Percentage leased as of month's end and includes all leases that expire
on the last day of the quarter.
(2) Average quarterly percentage is the average of the end of the month
leased percentage for each of the 3 months during the quarter.
(3) Property was acquired on June 29, 2010.
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule H
Largest 20 Tenants -- FSP Owned Portfolio
(Unaudited & Estimated)
The following table includes the largest 20 tenants in FSP's owned
portfolio based on leased square feet:
As of June 30, 2010
% of
Portfol-
Tenant Sq Ft SIC Code io
----------------------------------- --------- --------- --------
1 TCF National Bank (1) 254,771 60 4.0%
2 Noblis, Inc. 252,613 54 3.9%
3 CITGO Petroleum Corporation (2) 248,399 29 3.9%
4 Tektronix Texas, LLC (3) 241,372 73 3.8%
5 Burger King Corporation 212,619 58 3.3%
6 Citigroup Credit Services, Inc 176,848 61 2.8%
7 RGA Reinsurance Company 185,501 63 2.9%
8 C.H. Robinson Worldwide, Inc. 153,028 47 2.4%
9 Geisecke & Devrient America, Inc. 135,888 73 2.1%
10 Murphy Exploration & Production
Company 133,786 13 2.1%
11 Monsanto Company 127,778 28 2.0%
12 Vail Holding Corp d/b/a Vail
Resorts (4) 121,913 79 1.9%
13 Northrop Grumman Information
Technology, Inc. 111,469 73 1.7%
14 Maines Paper & Food Service, Inc. 98,745 51 1.5%
15 Federal National Mortgage
Association (5) 92,358 61 1.4%
16 Amdocs, Inc. 91,928 73 1.4%
17 County of Santa Clara 90,467 91 1.4%
18 Ober Kaler Grimes & Shriver 88,736 81 1.4%
19 International Business Machines Corp. 83,209 79 1.3%
20 Corporate Holdings, LLC 81,818 67 1.3%
--------- --------
Total 2,983,246 46.5%
--------- --------
(1) Property was acquired on June 29, 2010.
(2) On January 20, 2010, the Company signed a new lease at a Houston,
Texas property, for approximately 248,000 square feet of space with
one of its tenants, CITGO Petroleum Corporation, effectively
extending the lease expiration from February 29, 2012 to
February 28, 2022.
(3) The Tektronix lease expired on June 30, 2010. Approximately
29,000 square feet had been subleased to ARGO Data Resource
Corporation (ARGO), which went direct with FSP. As of July 1, 2010
ARGO has an aggregate of approximately 84,000 square feet leased
through August 31, 2016.
(4) On March 22, 2010, the Company signed a lease for an additional
approximate 38,000 square feet of space with one of its tenants,
Vail Holdings, Inc. through March 2019. The remaining space of
approximately 84,000 square feet is leased through March 2023.
(5) On June 7, 2010, Federal National Mortgage Association commenced
a lease for approximately 92,000 square feet of space at an Addison,
Texas property. The lease expires September 6, 2013.
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule I
Definition of Funds From Operations ("FFO"),
and FFO plus Gains on Sales ("FFO+GOS")
The Company evaluates the performance of its reportable segments based on several measures including Funds From Operations ("FFO") and FFO plus Gains on Sales ("FFO+GOS") as management believes they represent important measures of activity and are an important consideration in determining distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with generally accepted accounting principles, or GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs. The Company defines FFO+GOS as FFO as defined above, plus gains (or losses) from sales of properties and provisions for assets held for sale, if applicable.
FFO and FFO+GOS should not be considered as alternatives to net income (determined in accordance with GAAP), as indicators of the Company's financial performance, nor as alternatives to cash flows from operating activities (determined in accordance with GAAP), nor as measures of the Company's liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company's needs. Other real estate companies may define these terms in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, FFO and FFO+GOS should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.
Contact:
John Demeritt
877-686-9496
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