Attached files
| file | filename |
|---|---|
| 8-K - 8-K - OFFICE PROPERTIES INCOME TRUST | a11-2435_38k.htm |
| EX-99.1 - EX-99.1 - OFFICE PROPERTIES INCOME TRUST | a11-2435_3ex99d1.htm |
Exhibit 99.2
GOVERNMENT PROPERTIES
INCOME TRUST
Fourth Quarter 2010
Supplemental Operating and Financial Data
All amounts in this report are unaudited.
TABLE OF CONTENTS
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Page |
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CORPORATE INFORMATION |
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Company Profile |
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5 |
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Investor Information |
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6 |
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Research Coverage |
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7 |
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FINANCIAL INFORMATION |
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Key Financial Data |
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9 |
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Consolidated Balance Sheets |
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10 |
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Consolidated Statements of Income |
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11 |
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Consolidated Statements of Cash Flows |
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12 |
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Same Property Results |
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13 |
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Debt Summary |
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14 |
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Debt Maturity Schedule |
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15 |
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Leverage Ratios and Coverage Ratios |
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16 |
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Tenant Improvements, Leasing Costs and Capital Improvements |
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17 |
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Acquisitions Information Since 1/1/2010 |
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18 |
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PROPERTY AND LEASING INFORMATION |
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Property Schedule |
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20 |
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Tenant List |
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21 |
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Occupancy and Leasing Summary |
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22 |
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Lease Expiration Schedule |
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23 |
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EXHIBITS |
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Calculation of EBITDA |
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A |
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Calculation and Reconciliation of Property Net Operating Income (NOI) |
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B |
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Calculation of Funds from Operations (FFO) |
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C |
WARNING CONCERNING
FORWARD LOOKING STATEMENTS
THIS SUPPLEMENTAL OPERATING AND FINANCIAL DATA CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:
· OUR ABILITY TO PAY DISTRIBUTIONS IN THE FUTURE AND THE EXPECTED AMOUNTS THEREOF,
· OUR ACQUISITIONS AND SALES OF PROPERTIES,
· THE CREDIT QUALITY OF OUR TENANTS,
· THE LIKELIHOOD THAT OUR TENANTS WILL PAY RENT, RENEW LEASES, SIGN NEW LEASES OR BE AFFECTED BY CYCLICAL ECONOMIC CONDITIONS,
· OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,
· OUR POLICIES AND PLANS REGARDING INVESTMENTS AND FINANCINGS,
· THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY,
· OUR ABILITY TO COMPETE FOR ACQUISITIONS AND TENANCIES EFFECTIVELY,
· OUR TAX STATUS AS A REAL ESTATE INVESTMENT TRUST, OR REIT,
· OUR ABILITY TO RAISE EQUITY OR DEBT CAPITAL, AND
· OTHER MATTERS.
OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FORWARD LOOKING STATEMENTS AND UPON OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION, FUNDS FROM OPERATIONS, CASH AVAILABLE FOR DISTRIBUTION, CASH FLOWS, LIQUIDITY AND PROSPECTS INCLUDE, BUT ARE NOT LIMITED TO:
· THE IMPACT OF CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS,
· COMPETITION WITHIN THE REAL ESTATE INDUSTRY,
· ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR MANAGING TRUSTEES, COMMONWEALTH REIT AND REIT MANAGEMENT & RESEARCH LLC AND ITS RELATED ENTITIES AND CLIENTS,
· COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS, AND
· LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY AS A REIT FOR U.S. FEDERAL INCOME TAX PURPOSES.
FOR EXAMPLE:
· CONTINGENCIES IN OUR ACQUISITION AGREEMENTS MAY CAUSE THESE TRANSACTIONS NOT TO OCCUR OR TO BE DELAYED,
· SOME OF OUR TENANTS MAY NOT RENEW EXPIRING LEASES, AND WE MAY BE UNABLE TO LOCATE NEW TENANTS TO MAINTAIN THE HISTORICAL OCCUPANCY RATES OF, OR RENTS FROM, OUR PROPERTIES,
· RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE,
· OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS DEPENDS UPON A NUMBER OF FACTORS, INCLUDING OUR FUTURE EARNINGS; WE MAY BE UNABLE TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS AND FUTURE DISTRIBUTIONS MAY BE SUSPENDED OR PAID AT A LESSER RATE THAN THE DISTRIBUTIONS WE NOW PAY,
· IF THE AVAILABILITY OF DEBT CAPITAL BECOMES RESTRICTED, WE MAY BE UNABLE TO REFINANCE OR REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE OR TO REFINANCE ON TERMS WHICH ARE AS FAVORABLE AS WE NOW HAVE, AND,
· OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES AND LEASE THEM FOR RENTS, LESS PROPERTY OPERATING EXPENSES, WHICH EXCEED OUR CAPITAL COSTS; WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES, ACQUISITION FINANCING OR LEASE TERMS FOR NEW PROPERTIES.
THESE RESULTS COULD OCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH ARE BEYOND OUR CONTROL, SUCH AS GOVERNMENT TENANTS’ NEEDS FOR LEASED SPACE, NATURAL DISASTERS, CHANGES IN CAPITAL MARKETS OR THE ECONOMY GENERALLY.
THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING UNDER “RISK FACTORS” IN OUR PERIODIC REPORTS, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS. OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION ARE AVAILABLE ON ITS WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING
STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
CORPORATE INFORMATION
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
COMPANY PROFILE
The Company:
Government Properties Income Trust, or GOV, we or us, is a real estate investment trust, or REIT, which owns buildings majority leased to government tenants located throughout the United States. The majority of our properties are office buildings. As of December 31, 2010, we owned 55 properties with approximately 6.8 million square feet. Forty-four properties are primarily leased to the U.S. Government and eleven are primarily leased to the state governments of California, Maryland, Massachusetts, Minnesota, New Jersey and South Carolina. GOV was formed in February 2009 and became a public company on June 8, 2009. We are included in the Russell 2000® stock index and the MSCI US REIT index.
Strategy:
Our primary business strategy is to maintain our properties, seek to renew our leases as they expire, selectively acquire additional properties that are majority leased to government tenants and to pay distributions to shareholders. As current leases expire, we will attempt to renew our leases with our existing tenants or enter into leases with new tenants, in both circumstances at rents which are equal to or greater than the rents we now receive. Our ability to renew leases with our existing tenants or to enter into new leases with new tenants and the rents we are able to charge will be dependent in large part upon market conditions which are generally beyond our control. Although we sometimes may sell properties, we generally consider ourselves to be a long term investor and are more interested in the long term earnings potential of our properties than selling properties for short term gains. We currently do not have any real estate investments in off balance sheet entities.
Management:
GOV is managed by Reit Management & Research LLC, or RMR. RMR is a real estate management company which was founded in 1986 to manage public investments in real estate. As of December 31, 2010, RMR managed one of the largest portfolios of publicly owned real estate in the North America, including nearly 1,400 properties, located in 46 states, Washington, DC, Puerto Rico and Ontario, Canada. RMR also manages a relatively small real estate portfolio located in Australia. RMR has approximately 650 employees in its headquarters and regional offices located throughout the country. In addition to managing GOV, RMR also manages CommonWealth REIT, or CWH, a publicly traded REIT that owns office and industrial properties, Hospitality Properties Trust, or HPT, a publicly traded REIT that owns hotels and travel centers, and Senior Housing Properties Trust, or SNH, a publicly traded REIT that primarily owns healthcare properties. RMR also provides management services to Five Star Quality Care, Inc., a healthcare services company which is a tenant of SNH, and to TravelCenters of America LLC, an operator of travel centers, which is a tenant of HPT. An affiliate of RMR, RMR Advisors, Inc., is the investment manager of publicly offered mutual funds, which principally invests in securities of unaffiliated real estate companies. The public companies managed by RMR and its affiliates had combined total gross assets of over $18 billion as of December 31, 2010. We believe that being managed by RMR is a competitive advantage for GOV because RMR provides us with a depth and quality of management and experience which may be unequaled in the real estate industry. We also believe RMR provides management services to GOV at costs that are lower than we would have to pay for similar quality services.
Corporate Headquarters:
Two Newton Place
255 Washington Street
Newton, MA 02458-1634
(t) (617) 219-1440
(f) (617) 219-1441
Stock Exchange Listing:
New York Stock Exchange
Trading Symbol:
Common Shares — GOV
Issuer Ratings:
Moody’s — Baa3
Standard & Poor’s — BBB-
Portfolio Data (as of 12/31/10):
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Total properties |
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55 |
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Total sq. ft. (000s) |
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6,804 |
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Percent leased |
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96.1 |
% |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
INVESTOR INFORMATION
Board of Trustees
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Barry M. Portnoy |
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Adam D. Portnoy |
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Managing Trustee |
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Managing Trustee |
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Barbara D. Gilmore |
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John L. Harrington |
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Independent Trustee |
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Independent Trustee |
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Jeffrey P. Somers |
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Independent Trustee |
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Senior Management
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David M. Blackman |
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Mark L. Kleifges |
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President and Chief Operating Officer |
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Treasurer and Chief Financial Officer |
Contact Information
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Investor Relations |
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Inquiries |
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Government Properties Income Trust |
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Financial inquiries should be directed to Mark L. Kleifges, |
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Two Newton Place |
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Treasurer and Chief Financial Officer, at (617) 219-1440 |
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255 Washington Street |
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or mkleifges@govreit.com. |
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Newton, MA 02458-1634 |
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(t) (617) 219-1440 |
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Investor and media inquiries should be directed to |
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(f) (617) 796-8267 |
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Timothy A. Bonang, Vice President, Investor Relations, at |
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(e-mail) info@govreit.com |
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(617) 796-8222 or tbonang@govreit.com, or Elisabeth |
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(website) www.govreit.com |
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Heiss, Manager, Investor Relations, at (617) 796-8222 or |
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eheiss@govreit.com. |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
RESEARCH COVERAGE
Equity Research Coverage
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Banc of America Merrill Lynch Research |
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Janney Capital Markets |
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James Feldman |
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Daniel P. Donlan |
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(212) 449-6255 |
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(215) 665-6476 |
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Jefferies & Company, Inc. |
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JMP Securities |
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Omotayo Okusanya |
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Mitch Germain |
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(212) 336-7076 |
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(212) 906-3546 |
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Morgan Keegan |
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RBC Capital Markets |
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Stephen Swett |
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David Rodgers |
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(212) 508-7585 |
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(440) 715-2647 |
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Wells Fargo Securities |
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Brendan Maiorana |
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(443) 263-6516 |
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Rating Agencies
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Moody’s Investors Service |
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Standard and Poor’s |
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Lori D. Marks |
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Susan Madison |
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(212) 553-0376 |
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(212) 438-4516 |
GOV is followed by the analysts and its credit is rated by the rating agencies listed above. Please note that any opinions, estimates or forecasts regarding GOV's performance made by these analysts or agencies do not represent opinions, forecasts or predictions of GOV or its management. GOV does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts or agencies.
FINANCIAL INFORMATION
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
KEY FINANCIAL DATA
(amounts in thousands, except per share data)
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As of and for the Three Months Ended |
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12/31/2010 |
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9/30/2010 |
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6/30/2010 |
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3/31/2010 |
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12/31/2009 |
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Shares Outstanding: |
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Common shares outstanding (at end of period) |
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40,501 |
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40,501 |
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31,264 |
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31,256 |
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21,481 |
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Weighted average common shares outstanding |
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40,501 |
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36,369 |
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31,261 |
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29,084 |
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21,481 |
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Common Share Data: |
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Price at end of period |
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$ |
26.79 |
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$ |
26.70 |
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$ |
25.52 |
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$ |
26.01 |
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$ |
22.98 |
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High during period |
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$ |
28.21 |
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$ |
28.53 |
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$ |
28.40 |
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$ |
26.01 |
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$ |
25.50 |
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Low during period |
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$ |
25.41 |
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$ |
24.65 |
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$ |
23.95 |
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$ |
21.64 |
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$ |
21.79 |
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Annualized dividends declared per share |
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$ |
1.64 |
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$ |
1.64 |
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$ |
1.60 |
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$ |
1.60 |
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$ |
1.60 |
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Annualized dividend yield (at end of period) |
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6.1 |
% |
6.1 |
% |
6.3 |
% |
6.2 |
% |
7.0 |
% | |||||
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Market Capitalization: |
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Total debt (book value) |
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$ |
164,428 |
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$ |
98,760 |
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$ |
117,944 |
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$ |
36,126 |
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$ |
144,375 |
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Plus: market value of common shares (at end of period) |
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1,085,022 |
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1,081,377 |
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797,857 |
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812,969 |
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493,633 |
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Total market capitalization |
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$ |
1,249,450 |
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$ |
1,180,137 |
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$ |
915,801 |
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$ |
849,095 |
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$ |
638,008 |
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Total debt / total market capitalization |
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13.2 |
% |
8.4 |
% |
12.9 |
% |
4.3 |
% |
22.6 |
% | |||||
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Selected Balance Sheet Data: |
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Total assets |
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$ |
951,288 |
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$ |
898,581 |
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$ |
686,278 |
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$ |
606,549 |
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$ |
514,813 |
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Total liabilities |
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$ |
193,891 |
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$ |
131,113 |
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$ |
132,898 |
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$ |
48,385 |
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$ |
162,763 |
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Gross book value of real estate assets (1) |
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$ |
1,038,355 |
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$ |
1,012,141 |
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$ |
806,584 |
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$ |
668,806 |
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$ |
595,281 |
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Total debt / gross book value of real estate (1) |
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15.8 |
% |
9.8 |
% |
14.6 |
% |
5.4 |
% |
24.3 |
% | |||||
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Book Capitalization: |
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Total debt |
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$ |
164,428 |
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$ |
98,760 |
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$ |
117,944 |
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$ |
36,126 |
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$ |
144,375 |
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Plus: total stockholders’ equity |
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757,397 |
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767,468 |
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553,380 |
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558,164 |
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352,050 |
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Total book capitalization |
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$ |
921,825 |
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$ |
866,228 |
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$ |
671,324 |
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$ |
594,290 |
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$ |
496,425 |
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Total debt / total book capitalization |
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17.8 |
% |
11.4 |
% |
17.6 |
% |
6.1 |
% |
29.1 |
% | |||||
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Selected Income Statement Data: |
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Rental income |
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$ |
36,727 |
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$ |
30,746 |
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$ |
25,940 |
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$ |
23,355 |
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$ |
20,654 |
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EBITDA (2) |
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$ |
21,430 |
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$ |
17,685 |
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$ |
15,850 |
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$ |
14,123 |
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$ |
12,010 |
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Property net operating income (NOI) (3) |
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$ |
23,537 |
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$ |
19,471 |
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$ |
17,480 |
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$ |
15,553 |
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$ |
13,243 |
|
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NOI margin (4) |
|
64.1 |
% |
63.3 |
% |
67.4 |
% |
66.6 |
% |
64.1 |
% | |||||
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Net income (5) |
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$ |
6,540 |
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$ |
6,669 |
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$ |
7,735 |
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$ |
6,851 |
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$ |
5,415 |
|
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Funds from operations (FFO) (6) |
|
$ |
19,171 |
|
$ |
15,677 |
|
$ |
14,147 |
|
$ |
12,575 |
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$ |
10,223 |
|
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Common distributions paid (7) |
|
$ |
16,605 |
|
$ |
12,818 |
|
$ |
12,503 |
|
$ |
8,592 |
|
$ |
10,741 |
|
|
FFO payout ratio |
|
86.6 |
% |
81.8 |
% |
88.4 |
% |
68.3 |
% |
105.1 |
% | |||||
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Per Share Data : |
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|
|
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Net income (5) |
|
$ |
0.16 |
|
$ |
0.18 |
|
$ |
0.25 |
|
$ |
0.24 |
|
$ |
0.25 |
|
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FFO (6) |
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$ |
0.47 |
|
$ |
0.43 |
|
$ |
0.45 |
|
$ |
0.43 |
|
$ |
0.48 |
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Coverage Ratios: |
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EBITDA (2) / interest expense |
|
9.9x |
|
9.0x |
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9.4x |
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9.2x |
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7.0x |
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(1) |
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Gross book value of real estate assets is real estate properties at cost, plus acquisition costs, before purchase price allocations and less impairment writedowns, if any. |
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(2) |
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See Exhibit A for calculation of EBITDA. |
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(3) |
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Property net operating income, or NOI, is defined as rental income from real estate less property operating expenses. See Exhibit B for calculation of NOI and reconciliation of NOI to net income. |
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(4) |
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NOI margin is defined as NOI as a percentage of rental income. See Exhibit B for more information. |
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(5) |
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Net income for the quarter ended December 31, 2010 includes a $3,786, or $0.09 per share, non-cash loss on extinguishement of debt. |
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(6) |
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See Exhibit C for calculation of funds from operations, or FFO, and FFO per share. |
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(7) |
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A $0.50 dividend was paid in the fourth quarter of 2009 including a regular quarterly distribution of $0.40 per common share plus an additional $0.10 reflecting our first 22 days as a public company during the prior quarter. |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
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As of |
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As of |
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12/31/2010 |
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12/31/2009 |
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ASSETS |
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Real estate properties: |
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Land |
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$ |
143,774 |
|
$ |
74,009 |
|
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Buildings and improvements |
|
833,719 |
|
502,748 |
| ||
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977,493 |
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576,757 |
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Accumulated depreciation |
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(131,046 |
) |
(113,027 |
) | ||
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|
|
846,447 |
|
463,730 |
| ||
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Acquired real estate leases, net |
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60,097 |
|
15,310 |
| ||
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Cash and cash equivalents |
|
2,437 |
|
1,478 |
| ||
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Restricted cash |
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1,548 |
|
— |
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Rents receivable, net |
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19,200 |
|
13,544 |
| ||
|
Deferred leasing costs, net |
|
1,002 |
|
1,330 |
| ||
|
Deferred financing costs, net |
|
3,935 |
|
5,204 |
| ||
|
Due from affiliates |
|
— |
|
103 |
| ||
|
Other assets, net |
|
16,622 |
|
14,114 |
| ||
|
Total assets |
|
$ |
951,288 |
|
$ |
514,813 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Revolving credit facility |
|
$ |
118,000 |
|
$ |
144,375 |
|
|
Mortgage notes payable |
|
46,428 |
|
— |
| ||
|
Accounts payable and accrued expenses |
|
14,436 |
|
13,985 |
| ||
|
Due to affiliates |
|
1,348 |
|
837 |
| ||
|
Acquired real estate lease obligations, net |
|
13,679 |
|
3,566 |
| ||
|
Total liabilities |
|
193,891 |
|
162,763 |
| ||
|
|
|
|
|
|
| ||
|
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Shareholders’ equity: |
|
|
|
|
| ||
|
Common shares of beneficial interest, $0.01 par value: 50,000,000 authorized, 40,500,800 and 21,481,350 shares issued and outstanding, respectively |
|
405 |
|
215 |
| ||
|
Additional paid in capital |
|
776,913 |
|
357,627 |
| ||
|
Cumulative other comprehensive income |
|
2 |
|
— |
| ||
|
Cumulative net income |
|
41,336 |
|
13,541 |
| ||
|
Cumulative common distributions |
|
(61,259 |
) |
(19,333 |
) | ||
|
Total shareholders’ equity |
|
757,397 |
|
352,050 |
| ||
|
Total liabilities and shareholders’ equity |
|
$ |
951,288 |
|
$ |
514,813 |
|
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
|
|
|
For the Three Months Ended |
|
For the Year Ended |
| ||||||||
|
|
|
12/31/2010 |
|
12/31/2009 |
|
12/31/2010 |
|
12/31/2009 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Rental income (1) |
|
$ |
36,727 |
|
$ |
20,654 |
|
$ |
116,768 |
|
$ |
78,957 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Real estate taxes |
|
3,553 |
|
2,296 |
|
12,177 |
|
8,546 |
| ||||
|
Utility expenses |
|
2,818 |
|
1,482 |
|
9,064 |
|
6,325 |
| ||||
|
Other operating expenses |
|
6,819 |
|
3,633 |
|
19,486 |
|
12,232 |
| ||||
|
Depreciation and amortization |
|
7,637 |
|
3,983 |
|
24,239 |
|
15,172 |
| ||||
|
Acquisition related costs |
|
1,208 |
|
825 |
|
5,750 |
|
1,032 |
| ||||
|
General and administrative |
|
2,146 |
|
1,228 |
|
7,055 |
|
4,058 |
| ||||
|
Total expenses |
|
24,181 |
|
13,447 |
|
77,771 |
|
47,365 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating income |
|
12,546 |
|
7,207 |
|
38,997 |
|
31,592 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest and other income |
|
23 |
|
10 |
|
103 |
|
53 |
| ||||
|
Interest expense (including net amortization of debt premiums and deferred financing fees of $492, $562, $2,283 and $1,551, respectively) |
|
(2,169 |
) |
(1,724 |
) |
(7,351 |
) |
(5,556 |
) | ||||
|
Loss on extinguishment of debt (2) |
|
(3,786 |
) |
— |
|
(3,786 |
) |
— |
| ||||
|
Equity in losses of an investee |
|
16 |
|
(15 |
) |
(1 |
) |
(15 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income before income tax expense |
|
6,630 |
|
5,478 |
|
27,962 |
|
26,074 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income tax expense |
|
(90 |
) |
(63 |
) |
(167 |
) |
(93 |
) | ||||
|
Net income |
|
$ |
6,540 |
|
$ |
5,415 |
|
$ |
27,795 |
|
$ |
25,981 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average common shares outstanding (3) |
|
40,501 |
|
21,481 |
|
34,341 |
|
15,082 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income per common share (3) |
|
$ |
0.16 |
|
$ |
0.25 |
|
$ |
0.81 |
|
$ |
1.72 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Additional Data: |
|
|
|
|
|
|
|
|
| ||||
|
General and administrative expenses / rental income |
|
5.84 |
% |
5.95 |
% |
6.04 |
% |
5.14 |
% | ||||
|
General and administrative expenses / total assets (at end of period) |
|
0.23 |
% |
0.24 |
% |
0.74 |
% |
0.79 |
% | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Non cash straight line rent adjustments (1) |
|
$ |
70 |
|
$ |
(55 |
) |
$ |
(5 |
) |
$ |
(452 |
) |
|
Lease value amortization (1) |
|
$ |
46 |
|
$ |
40 |
|
$ |
(34 |
) |
$ |
281 |
|
|
Lease termination fees included in rental income |
|
$ |
— |
|
$ |
— |
|
$ |
57 |
|
$ |
— |
|
|
(1) |
|
We report rental income on a straight line basis over the terms of the respective leases; accordingly, rental income includes non-cash straight line rent adjustments. Rental income also includes expense reimbursements, tax escalations, parking revenues and other fixed and variable obligations of our tenants, as well as the net effect of non-cash amortization of intangible lease assets and liabilities. |
|
(2) |
|
Net income for the quarter and year ended December 31, 2010 included a $3,786 non-cash loss on extinguishment of debt. |
|
(3) |
|
Prior to completion of our IPO on June 8, 2009, we did not have any publicly traded outstanding common shares. If our IPO had been completed on January 1, 2009, our weighted average common shares outstanding for the year ended December 31, 2009 would have been 21,459. |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
|
|
|
For the Year Ended |
| ||||
|
|
|
12/31/2010 |
|
12/31/2009 |
| ||
|
Cash flows from operating activities: |
|
|
|
|
| ||
|
Net income |
|
$ |
27,795 |
|
$ |
25,981 |
|
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
| ||
|
Depreciation |
|
19,180 |
|
13,562 |
| ||
|
Net amortization of debt premium and deferred financing fees |
|
2,283 |
|
1,551 |
| ||
|
Amortization of acquired real estate leases |
|
4,627 |
|
895 |
| ||
|
Amortization of deferred leasing costs |
|
465 |
|
435 |
| ||
|
Share based compensation expense |
|
546 |
|
250 |
| ||
|
Loss on extinguishment of debt |
|
3,786 |
|
— |
| ||
|
Equity in losses of an investee |
|
1 |
|
15 |
| ||
|
Change in assets and liabilities: |
|
|
|
|
| ||
|
(Increase) decrease in restricted cash |
|
(1,548 |
) |
1,334 |
| ||
|
(Increase) decrease in deferred leasing costs |
|
(137 |
) |
(9 |
) | ||
|
(Increase) decrease in rents receivable |
|
(5,656 |
) |
(6,998 |
) | ||
|
(Increase) decrease in due from affiliates |
|
103 |
|
(103 |
) | ||
|
(Increase) decrease in other assets |
|
(1,361 |
) |
(214 |
) | ||
|
Increase (decrease) in accounts payable and accrued expenses |
|
8,554 |
|
2,538 |
| ||
|
Increase (decrease) in due to affiliates |
|
511 |
|
837 |
| ||
|
Cash provided by operating activities |
|
59,149 |
|
40,074 |
| ||
|
|
|
|
|
|
| ||
|
Cash flows from investing activities: |
|
|
|
|
| ||
|
Real estate acquisitions and improvements |
|
(394,617 |
) |
(100,051 |
) | ||
|
Investment in Affiliates Insurance Company |
|
(76 |
) |
(5,134 |
) | ||
|
Cash used in investing activities |
|
(394,693 |
) |
(105,185 |
) | ||
|
|
|
|
|
|
| ||
|
Cash flows from financing activities: |
|
|
|
|
| ||
|
Proceeds from issuance of common shares, net |
|
418,930 |
|
205,510 |
| ||
|
Repayment of mortgage loans |
|
(571 |
) |
(134 |
) | ||
|
Borrowings on revolving credit facility |
|
335,000 |
|
382,000 |
| ||
|
Payments on revolving credit facility |
|
(361,375 |
) |
(237,625 |
) | ||
|
Financing fees |
|
(4,962 |
) |
(6,755 |
) | ||
|
Distributions to common shareholders |
|
(50,519 |
) |
(10,741 |
) | ||
|
Equity distributions |
|
— |
|
(265,763 |
) | ||
|
Cash provided by financing activities |
|
336,503 |
|
66,492 |
| ||
|
|
|
|
|
|
| ||
|
Increase in cash and cash equivalents |
|
959 |
|
1,381 |
| ||
|
Cash and cash equivalents at beginning of period |
|
1,478 |
|
97 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
2,437 |
|
$ |
1,478 |
|
|
|
|
|
|
|
| ||
|
Supplemental cash flow information: |
|
|
|
|
| ||
|
Interest paid |
|
$ |
4,333 |
|
$ |
3,918 |
|
|
Taxes paid |
|
145 |
|
— |
| ||
|
|
|
|
|
|
| ||
|
Non-cash operating activities |
|
|
|
|
| ||
|
Equity distributions |
|
$ |
— |
|
$ |
8,047 |
|
|
|
|
|
|
|
| ||
|
Non-cash investing activities |
|
|
|
|
| ||
|
Assumption of mortgage debt in connection with real estate acquisitions |
|
$ |
(44,951 |
) |
$ |
— |
|
|
|
|
|
|
|
| ||
|
Non-cash financing activities |
|
|
|
|
| ||
|
Mortgage debt assumed |
|
$ |
44,951 |
|
$ |
— |
|
|
Issuance of common shares pursuant to our equity compensation plan |
|
(546 |
) |
(250 |
) | ||
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
SAME PROPERTY RESULTS
(dollars and sq. ft. in thousands)
|
|
|
For the Three Months Ended (1) |
|
For the Year Ended (2) |
| ||||||||
|
|
|
12/31/2010 |
|
12/31/2009 |
|
12/31/2010 |
|
12/31/2009 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Properties |
|
30 |
|
30 |
|
29 |
|
29 |
| ||||
|
Total sq. ft. |
|
3,625 |
|
3,625 |
|
3,304 |
|
3,304 |
| ||||
|
Percent leased (3) |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% | ||||
|
Rental income (4) |
|
$ |
19,786 |
|
$ |
20,398 |
|
$ |
76,298 |
|
$ |
77,921 |
|
|
Property net operating income (NOI) (5) |
|
$ |
13,395 |
|
$ |
13,048 |
|
$ |
49,979 |
|
$ |
51,069 |
|
|
NOI margin |
|
67.7 |
% |
64.0 |
% |
65.5 |
% |
65.5 |
% | ||||
|
NOI % growth |
|
2.7 |
% |
|
|
-2.1 |
% |
|
| ||||
|
(1) |
|
Based on properties we owned continuously since 10/1/2009. |
|
(2) |
|
Based on properties owned continuously since 1/1/2009 by us or our predecessor. |
|
(3) |
|
Percent leased includes (i) space being fitted out for occupancy pursuant to signed leases, if any, and (ii) space which is leased, but is not occupied or is being offered for sublease by tenants, if any. |
|
(4) |
|
We report rental income on a straight line basis over the terms of the respective leases; accordingly, rental income includes non-cash straight line rent adjustments. Rental income also includes expense reimbursements, tax escalations, parking revenues and other fixed and variable charges paid to us by our tenants, as well as the net effect of non-cash amortization of intangible lease assets and liabilities. |
|
(5) |
|
Property net operating income, or NOI, is defined as property rental income less property operating expenses. See Exhibit B for calculation of NOI and reconciliation of NOI to net income. |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
DEBT SUMMARY
(dollars in thousands)
|
|
|
Coupon |
|
Interest |
|
Principal |
|
Maturity |
|
Due at |
|
Years to |
| ||
|
|
|
Rate |
|
Rate (1) |
|
Balance (1) |
|
Date |
|
Maturity |
|
Maturity |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Unsecured Floating Rate Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
$500 million unsecured revolving credit facility (2) |
|
2.37 |
% |
2.37 |
% |
$ |
118,000 |
|
10/28/2013 |
|
$ |
118,000 |
|
2.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Secured Fixed Rate Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Secured debt - One property in Landover, MD |
|
6.21 |
% |
6.21 |
% |
$ |
24,800 |
|
8/1/2016 |
|
$ |
23,296 |
|
5.6 |
|
|
Secured debt - One property in Lakewood, CO |
|
8.15 |
% |
6.15 |
% |
10,772 |
|
3/1/2021 |
|
— |
|
10.2 |
| ||
|
Secured debt - One property in Tampa, FL |
|
7.00 |
% |
5.15 |
% |
10,856 |
|
3/1/2019 |
|
7,890 |
|
8.2 |
| ||
|
Total / weighted average secured fixed rate debt |
|
6.84 |
% |
5.95 |
% |
$ |
46,428 |
|
|
|
$ |
31,186 |
|
7.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Summary Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Total / weighted average floating rate debt |
|
2.37 |
% |
2.37 |
% |
$ |
118,000 |
|
|
|
$ |
118,000 |
|
2.8 |
|
|
Total / weighted average secured fixed rate debt |
|
6.84 |
% |
5.95 |
% |
46,428 |
|
|
|
31,186 |
|
7.3 |
| ||
|
Total / weighted average debt |
|
3.63 |
% |
3.38 |
% |
$ |
164,428 |
|
|
|
$ |
149,186 |
|
4.1 |
|
|
(1) |
|
Includes the effect of mark to market accounting for mortgage debts assumed. Excludes the effects of offering and transaction costs. |
|
(2) |
|
Interest is generally set at LIBOR plus a spread which varies based upon our senior unsecured debt ratings; the coupon rate and interest rate listed above is as of 12/31/2010. Subject to meeting certain conditions and payment of a fee, GOV may extend the maturity date to 10/28/14. |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
DEBT MATURITY SCHEDULE
(dollars in thousands)
|
|
|
Unsecured |
|
Secured |
|
|
| |||
|
|
|
Floating |
|
Fixed Rate |
|
|
| |||
|
Year |
|
Rate Debt (1) |
|
Debt |
|
Total (2) |
| |||
|
|
|
|
|
|
|
|
| |||
|
2011 |
|
$ |
— |
|
$ |
901 |
|
$ |
901 |
|
|
2012 |
|
— |
|
1,153 |
|
1,153 |
| |||
|
2013 |
|
118,000 |
|
1,248 |
|
119,248 |
| |||
|
2014 |
|
— |
|
1,345 |
|
1,345 |
| |||
|
2015 |
|
— |
|
1,450 |
|
1,450 |
| |||
|
2016 |
|
— |
|
24,708 |
|
24,708 |
| |||
|
2017 |
|
— |
|
1,308 |
|
1,308 |
| |||
|
2018 |
|
— |
|
1,415 |
|
1,415 |
| |||
|
2019 |
|
— |
|
9,168 |
|
9,168 |
| |||
|
2020 and thereafter |
|
— |
|
1,683 |
|
1,683 |
| |||
|
Total |
|
$ |
118,000 |
|
$ |
44,379 |
|
$ |
162,379 |
|
|
|
|
|
|
|
|
|
| |||
|
Percent |
|
72.7 |
% |
27.3 |
% |
100.0 |
% | |||
|
(1) |
|
Represents amounts outstanding on GOV’s $500 million unsecured revolving credit facility at 12/31/2010 that matures 10/28/2013. Subject to meeting certain conditions and payment of a fee, GOV may extend the maturity date to 10/28/2014. |
|
(2) |
|
The total debt as of 12/31/2010, including unamortized mark to market premiums, was $164,428. |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
LEVERAGE RATIOS AND COVERAGE RATIOS
|
|
As of and for the Three Months Ended |
| |||||||||
|
|
|
12/31/2010 |
|
9/30/2010 |
|
6/30/2010 |
|
3/31/2010 |
|
12/31/2009 |
|
|
Leverage Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt / total market capitalization(1) |
|
13.2 |
% |
8.4 |
% |
12.9 |
% |
4.3 |
% |
22.6 |
% |
|
Total debt / total book capitalization(1) |
|
17.8 |
% |
11.4 |
% |
17.6 |
% |
6.1 |
% |
29.1 |
% |
|
Total debt / total assets(1) |
|
17.3 |
% |
11.0 |
% |
17.2 |
% |
6.0 |
% |
28.0 |
% |
|
Total debt / gross book value of real estate assets (2) |
|
15.8 |
% |
9.8 |
% |
14.6 |
% |
5.4 |
% |
24.3 |
% |
|
Secured debt / total assets |
|
4.9 |
% |
11.0 |
% |
17.2 |
% |
6.0 |
% |
28.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coverage Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (3) / interest expense (4) |
|
9.9x |
|
9.0x |
|
9.4x |
|
9.2x |
|
7.0x |
|
|
(1) |
|
Debt includes the effect of mark to market accounting for mortgage debts assumed at the time of certain real estate acquisitions. |
|
(2) |
|
Gross book value of real estate assets is real estate properties, at cost, including purchase price allocations less impairment writedowns, if any. |
|
(3) |
|
See Exhibit A for calculation of EBITDA. |
|
(4) |
|
Interest expense includes the net amortization of debt premiums and deferred financing fees. |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
TENANT IMPROVEMENTS, LEASING COSTS AND CAPITAL IMPROVEMENTS
(dollars and sq. ft. in thousands, except per sq. ft. data)
|
|
|
For the Three Months Ended |
| |||||||||||||
|
|
|
12/31/2010 |
|
9/30/2010 |
|
6/30/2010 |
|
3/31/2010 |
|
12/31/2009 |
| |||||
|
Tenant improvements (TI) |
|
$ |
383 |
|
$ |
648 |
|
$ |
87 |
|
$ |
209 |
|
$ |
438 |
|
|
Leasing costs (LC) |
|
28 |
|
62 |
|
22 |
|
25 |
|
8 |
| |||||
|
Total TI and LC |
|
411 |
|
710 |
|
109 |
|
234 |
|
446 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Building improvements (1) |
|
1,680 |
|
369 |
|
200 |
|
33 |
|
868 |
| |||||
|
Development, redevelopment and other activities (2) |
|
494 |
|
251 |
|
212 |
|
13 |
|
516 |
| |||||
|
Total capital improvements, including TI and LC |
|
$ |
2,585 |
|
$ |
1,330 |
|
$ |
521 |
|
$ |
280 |
|
$ |
1,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Sq. ft. beginning of period |
|
6,471 |
|
4,905 |
|
4,390 |
|
3,957 |
|
3,304 |
| |||||
|
Sq. ft. end of period |
|
6,804 |
|
6,471 |
|
4,905 |
|
4,390 |
|
3,957 |
| |||||
|
Average sq. ft. during period |
|
6,638 |
|
5,688 |
|
4,648 |
|
4,174 |
|
3,631 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Building improvements per average sq. ft. during period |
|
$ |
0.25 |
|
$ |
0.06 |
|
$ |
0.04 |
|
$ |
0.01 |
|
$ |
0.24 |
|
|
(1) |
|
Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets. |
|
(2) |
|
Development, redevelopment and other activities generally include non-recurring expenditures or expenditures that we believe increase the value of our existing properties. |
Government Properties Income Trust
Supplemental Operating and Financial Data
ACQUISITIONS INFORMATION SINCE 1/1/2010
(dollars and sq. ft. in thousands, except per sq. ft. amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
Purchase |
|
|
|
Remaining |
|
|
|
|
| ||
|
Date |
|
|
|
Number of |
|
|
|
Purchase |
|
Price (1) / |
|
Cap |
|
Lease |
|
Percent |
|
|
| ||
|
Acquired |
|
City and State |
|
Properties |
|
Sq. Ft. |
|
Price (1) |
|
Sq. Ft. |
|
Rate (2) |
|
Term (3) |
|
Leased (4) |
|
Major Tenant - Occupant |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Jan-10 |
|
Lakewood, CO |
|
1 |
|
167 |
|
$ |
28,710 |
|
$ |
171.92 |
|
10.2 |
% |
9.7 |
|
100.0 |
% |
U.S. Government - National Parks Service |
|
|
Feb-10 |
|
Landover, MD |
|
1 |
|
266 |
|
43,650 |
|
164.10 |
|
9.0 |
% |
9.5 |
|
100.0 |
% |
U.S. Government - Defense Intelligence Agency |
| ||
|
Apr-10 |
|
Burlington, VT |
|
1 |
|
27 |
|
9,700 |
|
359.26 |
|
8.6 |
% |
14.3 |
|
100.0 |
% |
U.S. Government - U.S. Citizenship & Immigration Services |
| ||
|
Apr-10 |
|
Detroit, MI |
|
1 |
|
56 |
|
21,300 |
|
380.36 |
|
8.7 |
% |
12.8 |
|
100.0 |
% |
U.S. Government - U.S. Citizenship & Immigration Services |
| ||
|
May-10 |
|
Malden, MA |
|
1 |
|
126 |
|
40,500 |
|
321.43 |
|
9.1 |
% |
8.6 |
|
100.0 |
% |
Commonwealth of Massachusetts - Department of Education |
| ||
|
Jun-10 |
|
Stoneham, MA |
|
1 |
|
98 |
|
14,709 |
|
150.09 |
|
8.9 |
% (5) |
8.9 |
|
92.7 |
% |
U.S. Government - Various federal agencies |
| ||
|
Jun-10 |
|
Kansas City, KS |
|
1 |
|
171 |
|
13,112 |
|
76.68 |
|
8.9 |
% (5) |
5.4 |
|
95.5 |
% |
U.S. Government - Various federal agencies |
| ||
|
Jun-10 |
|
Safford, AZ |
|
1 |
|
38 |
|
12,559 |
|
330.50 |
|
8.9 |
% (5) |
13.9 |
|
100.0 |
% |
U.S. Government - Bureau of Land Management |
| ||
|
Jul-10 |
|
Tucson, AZ |
|
1 |
|
35 |
|
2,884 |
|
82.40 |
|
8.9 |
% (5) |
1.6 |
|
100.0 |
% |
U.S. Government - Drug Enforcement Agency |
| ||
|
Jul-10 |
|
San Diego, CA |
|
1 |
|
142 |
|
16,482 |
|
116.07 |
|
8.9 |
% (5) |
7.8 |
|
50.0 |
% |
U.S. Government - Various federal agencies |
| ||
|
Jul-10 |
|
Savannah, GA |
|
1 |
|
36 |
|
3,348 |
|
93.00 |
|
8.9 |
% (5) |
0.9 |
|
100.0 |
% |
U.S. Government - Federal Bureau of Investigation |
| ||
|
Jul-10 |
|
Minneapolis, MN |
|
1 |
|
200 |
|
23,231 |
|
116.16 |
|
8.9 |
% (5) |
3.8 |
|
53.8 |
% |
U.S. Government - Various federal agencies |
| ||
|
Jul-10 |
|
Albuquerque, NM |
|
1 |
|
29 |
|
2,394 |
|
82.55 |
|
8.9 |
% (5) |
1.3 |
|
100.0 |
% |
U.S. Government - Bureau of Land Management |
| ||
|
Aug-10 |
|
Washington, DC |
|
1 |
|
155 |
|
51,503 |
|
332.28 |
|
8.9 |
% (5) |
4.3 |
|
100.0 |
% |
U.S. Government - Defense Nuclear Facilities Safety Board |
| ||
|
Aug-10 |
|
Boston, MA |
|
1 |
|
133 |
|
23,813 |
|
179.05 |
|
8.9 |
% (5) |
2.8 |
|
98.8 |
% |
Commonwealth of Massachusetts - Dept. of Environmental Affairs |
| ||
|
Sep-10 |
|
Riverdale, MD |
|
1 |
|
338 |
|
41,731 |
|
123.46 |
|
8.9 |
% (5) |
4.5 |
|
100.0 |
% |
U.S. Government - Department of Agriculture |
| ||
|
Sep-10 |
|
Oklahoma City, OK |
|
1 |
|
186 |
|
8,302 |
|
44.63 |
|
8.9 |
% (5) |
2.4 |
|
89.6 |
% |
U.S. Government - Internal Revenue Service |
| ||
|
Sep-10 |
|
Columbia, SC |
|
1 |
|
51 |
|
3,927 |
|
77.00 |
|
8.9 |
% (5) |
1.8 |
|
73.8 |
% |
State of South Carolina - Public Service Commission |
| ||
|
Sep-10 |
|
Columbia, SC |
|
1 |
|
58 |
|
3,190 |
|
55.00 |
|
8.9 |
% (5) |
4.3 |
|
84.7 |
% |
State of South Carolina - Technical College System |
| ||
|
Sep-10 |
|
Memphis, TN |
|
1 |
|
205 |
|
9,815 |
|
47.88 |
|
8.9 |
% (5) |
4.8 |
|
83.6 |
% |
U.S. Government - Bankruptcy Courts |
| ||
|
Oct-10 |
|
Tampa, FL |
|
1 |
|
68 |
|
13,500 |
|
198.77 |
|
9.0 |
% |
8.0 |
|
100.0 |
% |
U.S. Government - Department of Veterans Affairs |
| ||
|
Dec-10 |
|
Trenton, NJ |
|
1 |
|
267 |
|
46,050 |
|
172.48 |
|
8.5 |
% |
7.5 |
|
97.6 |
% |
State of New Jersey - Department of Treasury |
| ||
|
Feb-11 |
|
Woodlawn, MD |
|
2 |
|
183 |
|
28,000 |
|
153.37 |
|
9.0 |
% |
4.0 |
|
100.0 |
% |
U.S. Government - Social Security Administration |
| ||
|
Feb-11 |
|
Quincy, MA |
|
1 |
|
93 |
|
14,000 |
|
151.27 |
|
10.2 |
% |
5.1 |
|
100.0 |
% |
Commonwealth of Massachusetts - Registry of Motor Vehicles |
| ||
|
|
|
Total / Weighted Average |
|
25 |
|
3,128 |
|
$ |
476,410 |
|
$ |
152.30 |
|
9.0 |
% |
6.8 |
|
94.5 |
% |
|
|
|
(1) |
|
Represents the gross contract purchase price including assumed debt, if any, and excludes acquisition costs, amounts necessary to adjust assumed liabilities to their fair values and purchase price allocations to intangibles. |
|
(2) |
|
Represents the ratio of the estimated current GAAP based annual rental income less property operating expenses to the purchase price on the date of acquisition. |
|
(3) |
|
Average remaining lease term based on rental income as of the date of acquisition. |
|
(4) |
|
Percent leased as of the date of acquisition. |
|
(5) |
|
In June 2010, we entered a series of agreements to acquire 15 properties for an aggregate purchase price of $231 million, excluding acquisition costs. The cap rate presented for these properties is the cap rate for the 15 properties combined. |
PROPERTY AND LEASING INFORMATION
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
PROPERTY SCHEDULE
|
|
|
Location |
|
Sq. Ft. |
|
% Sq. Ft. |
|
% Rental Income(1) |
|
% NOI |
|
|
1 |
|
Fresno, CA |
|
531,976 |
|
7.8 |
% |
5.8 |
% |
10.6 |
% |
|
2 |
|
Washington, DC |
|
339,541 |
|
5.0 |
% |
8.6 |
% |
9.5 |
% |
|
3 |
|
Riverdale, MD |
|
337,500 |
|
5.0 |
% |
6.0 |
% |
5.3 |
% |
|
4 |
|
Rockville, MD |
|
188,444 |
|
2.8 |
% |
4.2 |
% |
4.7 |
% |
|
5 |
|
Landover, MD |
|
266,000 |
|
3.9 |
% |
3.1 |
% |
4.6 |
% |
|
6 |
|
Washington, DC |
|
154,530 |
|
2.3 |
% |
4.3 |
% |
3.8 |
% |
|
7 |
|
Lakewood, CO |
|
166,745 |
|
2.5 |
% |
2.9 |
% |
3.6 |
% |
|
8 |
|
Sacramento, CA |
|
163,840 |
|
2.4 |
% |
3.3 |
% |
3.5 |
% |
|
9 |
|
Malden, MA |
|
125,521 |
|
1.8 |
% |
3.2 |
% |
3.4 |
% |
|
10 |
|
San Diego, CA |
|
147,955 |
|
2.2 |
% |
2.1 |
% |
2.7 |
% |
|
11 |
|
Phoenix, AZ |
|
97,145 |
|
1.4 |
% |
2.3 |
% |
2.7 |
% |
|
12 |
|
Falls Church, VA |
|
164,746 |
|
2.4 |
% |
2.3 |
% |
2.5 |
% |
|
13 |
|
Atlanta, GA |
|
128,390 |
|
1.9 |
% |
2.1 |
% |
2.3 |
% |
|
14 |
|
Atlanta, GA |
|
151,252 |
|
2.2 |
% |
2.3 |
% |
2.2 |
% |
|
15 |
|
Boston, MA |
|
132,876 |
|
2.0 |
% |
2.6 |
% |
2.1 |
% |
|
16 |
|
Nashua, NH |
|
321,800 |
|
4.7 |
% |
1.7 |
% |
1.9 |
% |
|
17 |
|
Detroit, MI |
|
55,966 |
|
0.8 |
% |
1.6 |
% |
1.8 |
% |
|
18 |
|
Buffalo, NY |
|
124,647 |
|
1.8 |
% |
1.9 |
% |
1.6 |
% |
|
19 |
|
Sacramento, CA |
|
110,500 |
|
1.6 |
% |
1.3 |
% |
1.6 |
% |
|
20 |
|
Memphis, TN |
|
204,694 |
|
3.0 |
% |
2.3 |
% |
1.6 |
% |
|
21 |
|
Stoneham, MA |
|
97,777 |
|
1.4 |
% |
1.5 |
% |
1.5 |
% |
|
22 |
|
Richland, WA |
|
92,914 |
|
1.4 |
% |
1.2 |
% |
1.4 |
% |
|
23 |
|
Arlington Heights, IL |
|
57,770 |
|
0.9 |
% |
1.3 |
% |
1.4 |
% |
|
24 |
|
Lakewood, CO |
|
70,884 |
|
1.0 |
% |
1.2 |
% |
1.3 |
% |
|
25 |
|
Kansas City, KS |
|
170,817 |
|
2.5 |
% |
1.6 |
% |
1.2 |
% |
|
26 |
|
San Diego, CA |
|
141,634 |
|
2.1 |
% |
1.6 |
% |
1.2 |
% |
|
27 |
|
Kansas City, MO |
|
98,073 |
|
1.4 |
% |
1.0 |
% |
1.1 |
% |
|
28 |
|
Germantown, MD |
|
80,550 |
|
1.2 |
% |
1.1 |
% |
1.1 |
% |
|
29 |
|
Lakewood, CO |
|
70,904 |
|
1.0 |
% |
1.0 |
% |
1.1 |
% |
|
30 |
|
Tampa, FL |
|
67,916 |
|
1.0 |
% |
2.5 |
% |
1.1 |
% |
|
31 |
|
San Diego, CA |
|
94,272 |
|
1.4 |
% |
1.2 |
% |
1.1 |
% |
|
32 |
|
Lakewood, CO |
|
71,208 |
|
1.1 |
% |
1.0 |
% |
1.0 |
% |
|
33 |
|
Golden, CO |
|
43,232 |
|
0.6 |
% |
1.0 |
% |
1.0 |
% |
|
34 |
|
Oklahoma City, OK |
|
185,881 |
|
2.7 |
% |
1.0 |
% |
1.0 |
% |
|
35 |
|
Burlington, VT |
|
26,609 |
|
0.4 |
% |
0.7 |
% |
0.9 |
% |
|
36 |
|
Atlanta, GA |
|
99,084 |
|
1.5 |
% |
0.9 |
% |
0.9 |
% |
|
37 |
|
Safford, AZ |
|
36,139 |
|
0.5 |
% |
0.6 |
% |
0.9 |
% |
|
38 |
|
Cheyenne, WY |
|
122,647 |
|
1.8 |
% |
0.9 |
% |
0.8 |
% |
|
39 |
|
San Diego, CA |
|
43,918 |
|
0.7 |
% |
0.7 |
% |
0.8 |
% |
|
40 |
|
Baltimore, MD |
|
84,674 |
|
1.2 |
% |
0.8 |
% |
0.8 |
% |
|
41 |
|
Minneapolis, MN |
|
200,346 |
|
2.9 |
% |
1.7 |
% |
0.8 |
% |
|
42 |
|
Richland, WA |
|
47,238 |
|
0.7 |
% |
0.6 |
% |
0.7 |
% |
|
43 |
|
Columbia, SC |
|
71,580 |
|
1.1 |
% |
0.7 |
% |
0.7 |
% |
|
44 |
|
Roseville, MN |
|
61,426 |
|
0.9 |
% |
0.7 |
% |
0.6 |
% |
|
45 |
|
Columbia, SC |
|
58,085 |
|
0.9 |
% |
0.5 |
% |
0.6 |
% |
|
46 |
|
Atlanta, GA |
|
37,554 |
|
0.6 |
% |
0.5 |
% |
0.6 |
% |
|
47 |
|
Waco, TX |
|
137,782 |
|
2.0 |
% |
1.4 |
% |
0.6 |
% |
|
48 |
|
Tucson, AZ |
|
34,500 |
|
0.5 |
% |
0.5 |
% |
0.5 |
% |
|
49 |
|
Savannah, GA |
|
35,228 |
|
0.5 |
% |
0.4 |
% |
0.4 |
% |
|
50 |
|
Albuquerque, NM |
|
29,045 |
|
0.4 |
% |
0.3 |
% |
0.3 |
% |
|
51 |
|
Falling Waters, WV |
|
36,818 |
|
0.5 |
% |
0.5 |
% |
0.3 |
% |
|
52 |
|
Columbia, SC |
|
50,947 |
|
0.8 |
% |
0.4 |
% |
0.3 |
% |
|
53 |
|
Atlanta, GA |
|
32,158 |
|
0.5 |
% |
0.3 |
% |
0.3 |
% |
|
54 |
|
Atlanta, GA |
|
32,828 |
|
0.5 |
% |
0.3 |
% |
0.2 |
% |
|
55 |
|
Trenton, NJ |
|
266,995 |
|
3.9 |
% |
4.8 |
% |
0.1 |
% |
|
|
|
|
|
6,803,501 |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
|
(1) |
|
Percentage of rental income is calculated using the annualized rent from tenants pursuant to signed leases as of 12/31/2010, plus estimated expense reimbursements; and excludes lease value amortization. |
|
(2) |
|
Percentage of NOI is calculated using the net operating income and is defined as property rental income less property operating expenses. |
|
|
|
See Exhibit B for the calculation and reconciliation of NOI to net income. |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
TENANT LIST
|
|
|
Tenant |
|
Sq. Ft. (1) |
|
% of Total |
|
% of Rental |
|
|
|
|
US Government: |
|
|
|
|
|
|
|
|
1 |
|
Internal Revenue Service |
|
757,732 |
|
11.1 |
% |
7.8 |
% |
|
2 |
|
U.S. Citizenship & Immigration Service |
|
334,750 |
|
4.9 |
% |
7.7 |
% |
|
3 |
|
Department of Veterans Affairs |
|
314,247 |
|
4.7 |
% |
6.4 |
% |
|
4 |
|
Centers for Disease Control |
|
481,266 |
|
7.1 |
% |
6.3 |
% |
|
5 |
|
Department of Agriculture |
|
337,500 |
|
5.0 |
% |
6.0 |
% |
|
6 |
|
Department of Justice |
|
243,561 |
|
3.6 |
% |
5.6 |
% |
|
7 |
|
Federal Bureau of Investigation |
|
269,856 |
|
4.0 |
% |
4.8 |
% |
|
8 |
|
National Business Center |
|
212,996 |
|
3.1 |
% |
3.2 |
% |
|
9 |
|
Defense Intelligence Agency |
|
266,000 |
|
3.9 |
% |
3.1 |
% |
|
10 |
|
Department of Energy |
|
220,702 |
|
3.2 |
% |
2.9 |
% |
|
11 |
|
Drug Enforcement Agency |
|
197,339 |
|
2.9 |
% |
2.9 |
% |
|
12 |
|
National Park Service |
|
166,745 |
|
2.5 |
% |
2.9 |
% |
|
13 |
|
Food and Drug Administration |
|
133,920 |
|
2.0 |
% |
2.8 |
% |
|
14 |
|
U.S. Courts |
|
112,021 |
|
1.6 |
% |
2.4 |
% |
|
15 |
|
Defense Information Systems |
|
163,407 |
|
2.4 |
% |
2.2 |
% |
|
16 |
|
Bureau of Land Management |
|
183,325 |
|
2.7 |
% |
1.8 |
% |
|
17 |
|
U.S. Postal Service |
|
321,800 |
|
4.7 |
% |
1.7 |
% |
|
18 |
|
Defense Nuclear Facilities Safety Board |
|
58,931 |
|
0.9 |
% |
1.3 |
% |
|
19 |
|
Occupational Health and Safety Administration |
|
57,770 |
|
0.8 |
% |
1.3 |
% |
|
20 |
|
Department of Housing and Urban Development |
|
90,487 |
|
1.3 |
% |
1.1 |
% |
|
21 |
|
Environmental Protection Agency |
|
43,232 |
|
0.6 |
% |
1.0 |
% |
|
22 |
|
Financial Management Service |
|
98,073 |
|
1.4 |
% |
1.0 |
% |
|
23 |
|
Military Entrance Processing Station |
|
27,634 |
|
0.4 |
% |
0.7 |
% |
|
24 |
|
Bureau of Prisons |
|
51,138 |
|
0.8 |
% |
0.5 |
% |
|
25 |
|
Equal Employment Opportunity Commission |
|
19,409 |
|
0.3 |
% |
0.2 |
% |
|
26 |
|
National Labor Relations Board |
|
10,615 |
|
0.2 |
% |
0.2 |
% |
|
27 |
|
Department of Homeland Security |
|
6,419 |
|
0.1 |
% |
0.1 |
% |
|
28 |
|
Executive Office for Immigration Review |
|
5,500 |
|
0.1 |
% |
0.1 |
% |
|
29 |
|
Department of State |
|
5,928 |
|
0.1 |
% |
0.1 |
% |
|
30 |
|
Department of Labor |
|
6,459 |
|
0.1 |
% |
0.0 |
% |
|
|
|
|
|
5,198,762 |
|
76.5 |
% |
78.2 |
% |
|
|
|
State Government: |
|
|
|
|
|
|
|
|
1 |
|
State of Massachusetts - two agency occupants |
|
223,744 |
|
3.3 |
% |
4.8 |
% |
|
2 |
|
State of California - six agency occupants |
|
260,199 |
|
3.8 |
% |
3.9 |
% |
|
3 |
|
State of New Jersey - Department of Treasury |
|
173,189 |
|
2.5 |
% |
3.3 |
% |
|
4 |
|
State of South Carolina - five agency occupants |
|
137,897 |
|
2.0 |
% |
1.3 |
% |
|
5 |
|
State of Maryland - three agency occupants |
|
84,674 |
|
1.2 |
% |
0.8 |
% |
|
6 |
|
State of Minnesota - two agency occupants |
|
71,821 |
|
1.1 |
% |
0.8 |
% |
|
|
|
|
|
951,524 |
|
13.9 |
% |
14.8 |
% |
|
|
|
101 Non-government Tenants |
|
386,137 |
|
5.7 |
% |
7.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal Leased Square Feet |
|
6,536,423 |
|
96.1 |
% |
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for Lease |
|
267,078 |
|
3.9 |
% |
— |
|
|
|
|
Total Square Feet |
|
6,803,501 |
|
100.0 |
% |
100.0 |
% |
|
(1) |
|
Sq. ft. is pursuant to signed leases as of 12/31/2010, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease, if any. |
|
(2) |
|
Percentage of rental income is calculated using annualized rent from tenants pursuant to signed leases as of 12/31/2010, plus estimated expense reimbursements; and excludes lease value amortization. |
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
OCCUPANCY AND LEASING SUMMARY
(dollars and sq. ft. in thousands, except per sq. ft. data)
|
|
|
As of and for the Three Months Ended |
| |||||||||||||
|
|
|
12/31/2010 |
|
9/30/2010 |
|
6/30/2010 |
|
3/31/2010 |
|
12/31/2009 |
| |||||
|
Properties |
|
55 |
|
53 |
|
41 |
|
35 |
|
33 |
| |||||
|
Total sq. ft. (1) |
|
6,804 |
|
6,469 |
|
4,905 |
|
4,390 |
|
3,957 |
| |||||
|
Percentage leased |
|
96.1 |
% |
96.0 |
% |
99.7 |
% |
100.0 |
% |
99.9 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Leasing Activity (sq. ft.): |
|
|
|
|
|
|
|
|
|
|
| |||||
|
New leases |
|
2 |
|
5 |
|
2 |
|
3 |
|
14 |
| |||||
|
Renewals |
|
45 |
|
71 |
|
11 |
|
1 |
|
— |
| |||||
|
Total |
|
47 |
|
76 |
|
13 |
|
4 |
|
14 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Capital Commitments (2): |
|
|
|
|
|
|
|
|
|
|
| |||||
|
New leases |
|
$ |
23 |
|
$ |
18 |
|
$ |
44 |
|
$ |
8 |
|
$ |
188 |
|
|
Renewals |
|
31 |
|
13 |
|
90 |
|
16 |
|
— |
| |||||
|
Total |
|
$ |
54 |
|
$ |
31 |
|
$ |
134 |
|
$ |
24 |
|
$ |
188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Capital Commitments per Sq. Ft. (2): |
|
|
|
|
|
|
|
|
|
|
| |||||
|
New leases |
|
$ |
9.78 |
|
$ |
3.82 |
|
$ |
21.25 |
|
$ |
2.39 |
|
$ |
13.05 |
|
|
Renewals |
|
$ |
0.68 |
|
$ |
0.18 |
|
$ |
8.60 |
|
$ |
15.87 |
|
$ |
— |
|
|
Total |
|
$ |
1.14 |
|
$ |
0.40 |
|
$ |
10.68 |
|
$ |
5.46 |
|
$ |
13.05 |
|
|
Weighted Average Lease Term by Sq. Ft. (years): |
|
|
|
|
|
|
|
|
|
|
| |||||
|
New leases |
|
7.8 |
|
1.8 |
|
5.3 |
|
1.1 |
|
5.4 |
| |||||
|
Renewals |
|
1.2 |
|
5.2 |
|
3.7 |
|
5.8 |
|
— |
| |||||
|
Total |
|
1.6 |
|
5.0 |
|
4.0 |
|
2.2 |
|
5.4 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Capital Commitments per Sq. Ft. per Year: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
New leases |
|
$ |
1.25 |
|
$ |
2.09 |
|
$ |
4.03 |
|
$ |
2.13 |
|
$ |
2.42 |
|
|
Renewals |
|
$ |
0.55 |
|
$ |
0.03 |
|
$ |
2.32 |
|
$ |
2.72 |
|
$ |
— |
|
|
Total |
|
$ |
0.72 |
|
$ |
0.08 |
|
$ |
2.70 |
|
$ |
2.43 |
|
$ |
2.42 |
|
|
(1) |
|
Sq. ft. measurements are subject to modest changes when space is remeasured or reconfigured for new tenants. |
|
(2) |
|
Represents commitments to tenant improvements and leasing costs. |
The above leasing summary is based on leases executed during the periods indicated.
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
LEASE EXPIRATION SCHEDULE
(dollars and sq. ft. in thousands)
|
|
|
Sq. Ft. |
|
% of Sq. Ft. |
|
Cumulative % |
|
Rental Income |
|
% of Rental |
|
Cumulative % of |
| |
|
2011 |
|
853 |
|
13.1 |
% |
13.1 |
% |
$ |
20,096 |
|
13.0 |
% |
13.0 |
% |
|
2012 |
|
1,052 |
|
16.1 |
% |
29.2 |
% |
27,920 |
|
18.1 |
% |
31.1 |
% | |
|
2013 |
|
1,027 |
|
15.7 |
% |
44.9 |
% |
17,095 |
|
11.1 |
% |
42.2 |
% | |
|
2014 |
|
389 |
|
6.0 |
% |
50.9 |
% |
8,006 |
|
5.2 |
% |
47.4 |
% | |
|
2015 |
|
1,026 |
|
15.7 |
% |
66.6 |
% |
22,808 |
|
14.8 |
% |
62.2 |
% | |
|
2016 |
|
334 |
|
5.1 |
% |
71.7 |
% |
8,679 |
|
5.6 |
% |
67.8 |
% | |
|
2017 |
|
498 |
|
7.6 |
% |
79.3 |
% |
9,841 |
|
6.4 |
% |
74.2 |
% | |
|
2018 |
|
329 |
|
5.0 |
% |
84.3 |
% |
12,953 |
|
8.4 |
% |
82.6 |
% | |
|
2019 |
|
665 |
|
10.2 |
% |
94.5 |
% |
15,803 |
|
10.2 |
% |
92.8 |
% | |
|
2020 and thereafter |
|
363 |
|
5.5 |
% |
100.0 |
% |
10,991 |
|
7.2 |
% |
100.0 |
% | |
|
Total |
|
6,536 |
|
100.0 |
% |
|
|
$ |
154,192 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Weighted average remaining lease term (in years) |
|
4.3 |
|
|
|
|
|
4.5 |
|
|
|
|
| |
|
(1) |
|
Sq. ft. is pursuant to signed leases as of 12/31/2010, and includes (i) space being fitted out for occupancy and (ii) space which is leased, but is not occupied or is being offered for sublease, if any. |
|
(2) |
|
Rental income is annualized rent from tenants pursuant to signed leases as of 12/31/2010, plus estimated expense reimbursements; and excludes lease value amortization. |
EXHIBITS
EXHIBIT A
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
CALCULATION OF EBITDA
(amounts in thousands)
|
|
|
For the Three Months Ended |
|
For the Year Ended |
| ||||||||
|
|
|
12/31/2010 |
|
12/31/2009 |
|
12/31/2010 |
|
12/31/2009 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income |
|
$ |
6,540 |
|
$ |
5,415 |
|
$ |
27,795 |
|
$ |
25,981 |
|
|
Plus: interest expense |
|
2,169 |
|
1,724 |
|
7,351 |
|
5,556 |
| ||||
|
Plus: income tax expense |
|
90 |
|
63 |
|
167 |
|
93 |
| ||||
|
Plus: depreciation and amortization |
|
7,637 |
|
3,983 |
|
24,239 |
|
15,172 |
| ||||
|
Plus: acquisition related costs |
|
1,208 |
|
825 |
|
5,750 |
|
1,032 |
| ||||
|
Plus: loss on extinguishment of debt (1) |
|
3,786 |
|
— |
|
3,786 |
|
— |
| ||||
|
EBITDA |
|
$ |
21,430 |
|
$ |
12,010 |
|
$ |
69,088 |
|
$ |
47,834 |
|
|
(1) |
|
Net income for the quarter and year ended December 31, 2010 included a $3,786 non-cash loss on extinguishment of debt. |
We compute EBITDA, or earnings before interest, taxes, depreciation and amortization, as net income plus interest expense, income tax expense, if any, depreciation and amortization, acquisition related costs and loss on extinguishment of debt (See Note 1). We consider EBITDA to be an appropriate measure of our performance, along with net income and cash flow from operating, investing and financing activities. We believe EBITDA provides useful information to investors because by excluding the effects of certain historical costs, such as interest expense and depreciation and amortization expense, EBITDA can facilitate a comparison of our current operating performance with our past operating performance and of operating performances among REITs. EBITDA does not represent cash generated by operating activities in accordance with U.S. generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. Also, some REITs may calculate EBITDA differently than us.
EXHIBIT B
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
CALCULATION AND RECONCILIATION OF PROPERTY NET OPERATING INCOME (NOI)
(amounts in thousands)
|
|
|
For the Three Months Ended |
|
For the Year Ended |
| ||||||||
|
|
|
12/31/2010 |
|
12/31/2009 |
|
12/31/2010 |
|
12/31/2009 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Calculation of NOI: |
|
|
|
|
|
|
|
|
| ||||
|
Rental income (1) |
|
$ |
36,727 |
|
$ |
20,654 |
|
$ |
116,768 |
|
$ |
78,957 |
|
|
Operating expenses |
|
(13,190 |
) |
(7,411 |
) |
(40,727 |
) |
(27,103 |
) | ||||
|
Property net operating income (NOI) |
|
$ |
23,537 |
|
$ |
13,243 |
|
$ |
76,041 |
|
$ |
51,854 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Reconciliation of NOI to Net Income: |
|
|
|
|
|
|
|
|
| ||||
|
Property net operating income (NOI) |
|
$ |
23,537 |
|
$ |
13,243 |
|
$ |
76,041 |
|
$ |
51,854 |
|
|
Depreciation and amortization |
|
(7,637 |
) |
(3,983 |
) |
(24,239 |
) |
(15,172 |
) | ||||
|
Acquisition related costs |
|
(1,208 |
) |
(825 |
) |
(5,750 |
) |
(1,032 |
) | ||||
|
General and administrative |
|
(2,146 |
) |
(1,228 |
) |
(7,055 |
) |
(4,058 |
) | ||||
|
Operating income |
|
12,546 |
|
7,207 |
|
38,997 |
|
31,592 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest and other income (expense), net |
|
23 |
|
10 |
|
103 |
|
53 |
| ||||
|
Interest expense |
|
(2,169 |
) |
(1,724 |
) |
(7,351 |
) |
(5,556 |
) | ||||
|
Loss on extinguishment of debt |
|
(3,786 |
) |
— |
|
(3,786 |
) |
— |
| ||||
|
Income tax expense |
|
(90 |
) |
(63 |
) |
(167 |
) |
(93 |
) | ||||
|
Equity in losses of an investee |
|
16 |
|
(15 |
) |
(1 |
) |
(15 |
) | ||||
|
Net income |
|
$ |
6,540 |
|
$ |
5,415 |
|
$ |
27,795 |
|
$ |
25,981 |
|
|
(1) |
|
We report rental income on a straight line basis over the terms of the respective leases; as a result, rental income includes non-cash straight line rent adjustments of approximately $70 and ($55) for the three months ended December 31, 2010 and 2009, respectively, and ($5) and ($452) for the year ended December 31, 2010 and 2009, respectively. Rental income includes non-cash amortization of intangible lease assets and liabilities of approximately $46 and $40 for the three months ended December 31, 2010 and 2009, respectively, and ($34) and $281 for the year ended December 31, 2010 and 2009, respectively. Rental income also includes reimbursements, tax escalations, parking revenues, service income and other fixed and variable payments received by us from our tenants. |
|
|
|
|
|
We compute NOI as shown above. We consider NOI to be an appropriate supplemental measure of our operating performance because we believe it helps both investors and management understand the operations of our properties. We believe NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are incurred at the property level and may facilitate comparisons of our operating performance between periods and among REITs. Our management uses NOI to evaluate individual and company wide property level performance. The calculation of NOI excludes depreciation and amortization, acquisition related costs, and general and administrative expenses from the calculation of net income in order to provide results that are more closely related to our properties’ results of operations. NOI does not represent cash generated by operating activities in accordance with GAAP, and should not be considered an alternative to net income, net income available or cash flow from operating activities as a measure of financial performance. Also, some REITs may calculate NOI differently than us. | ||
EXHIBIT C
Government Properties Income Trust
Supplemental Operating and Financial Data
December 31, 2010
CALCULATION OF FUNDS FROM OPERATIONS (FFO)
(amounts in thousands, except per share data)
|
|
|
For the Three Months Ended |
|
For the Year Ended |
| ||||||||
|
|
|
12/31/2010 |
|
12/31/2009 |
|
12/31/2010 |
|
12/31/2009 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income |
|
$ |
6,540 |
|
$ |
5,415 |
|
$ |
27,795 |
|
$ |
25,981 |
|
|
Plus: depreciation and amortization |
|
7,637 |
|
3,983 |
|
24,239 |
|
15,172 |
| ||||
|
Plus: acquisition related costs |
|
1,208 |
|
825 |
|
5,750 |
|
1,032 |
| ||||
|
Plus: loss on extinguishment of debt (1) |
|
3,786 |
|
— |
|
3,786 |
|
— |
| ||||
|
FFO |
|
$ |
19,171 |
|
$ |
10,223 |
|
$ |
61,570 |
|
$ |
42,185 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average common shares outstanding (2) |
|
40,501 |
|
21,481 |
|
34,341 |
|
15,082 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
FFO per share (2) |
|
$ |
0.47 |
|
$ |
0.48 |
|
$ |
1.79 |
|
$ |
2.80 |
|
|
(1) |
|
Net income for the quarter and year ended December 31, 2010 included a $3,786 non-cash loss on extinguishment of debt. |
|
(2) |
|
Prior to completion of our IPO on June 8, 2009, we did not have any publicly traded outstanding common shares. If our IPO had been completed on January 1, 2009, our weighted average common shares outstanding for the year ended December 31, 2009 would have been 21,459. |
We compute FFO as shown above. Our calculations of FFO differ from the National Association of Real Estate Investment Trusts, or NAREIT, definition because we exclude acquisition related costs and loss on extinguishment of debt (See Note 1) from the determination of FFO. We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical amounts, such as acquisition related costs and depreciation expense, FFO can facilitate a comparison of operating performances by a REIT over time and among REITs. FFO does not represent cash generated by operating activities in accordance with GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders. Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving credit facility, the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance. Also, some REITs may calculate FFO differently than us.