Exhibit 99.2

 

 

Supplemental Operating and Financial Data Second Quarter 2011

 

 

 

Franklin Street Properties Corp. ● 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300

 

www.franklinstreetproperties.com

 

 

	Page			Page
Company Overview	3-5		Tenant Analysis
			20 Largest tenants with annualized rent and remaining term	21
Key Financial Data			20 Largest Tenants, Industry Profile	22
Financial Highlights	6		Lease Expirations by Square Feet	23
Management’s Key Operating Measures	7		Lease Expirations with annualized rent per square foot	24
Income Statements	8
EPS, FFO, GOS and FFO+GOS	9		Transactional Drivers
Balance Sheets	10		Capital Recycling	25
Cash Flow Statements	11		Investment Banking Performance	26
Segment Information	12-13
Property Net Operating Income (NOI): Cash and GAAP Basis	14		FFO and FFO+GOS Reconciliations	27
Capital Analysis	15		FFO and FFO+GOS Definitions	28
			FAD Reconciliation and Definition	29
Portfolio Overview			EBITDA Reconciliation and Definition	30
Property by Form of FSP Participation	16		NOI Reconciliation and Definition	31
Regional Analysis and Map	17
Owned Property List	18
Properties with annualized rent per square foot	19
Capital Expenditures	20

 

All financial information contained in this supplemental information package is unaudited. In addition, certain statements contained in this supplemental information package may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although FSP believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause actual results to differ materially from FSP’s current expectations include general economic conditions, local real estate conditions, the performance of properties that FSP has acquired or may acquire, the timely lease-up of properties and other risks, detailed from time to time in FSP’s SEC reports. FSP assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

 

 

Overview

 

Franklin Street Properties Corp. (FSP) (NYSE Amex: FSP) is an investment firm focused on achieving current income and long-term growth through investments in commercial properties. FSP’s portfolio of real estate assets consists primarily of suburban office buildings and includes select investments in central business district (CBD) properties. FSP’s real estate operations include property acquisitions and dispositions, interim acquisition and short-term financing, leasing, development and asset management. FSP’s subsidiary, FSP Investments LLC (member, FINRA and SIPC), is a real estate investment banking firm and registered broker/dealer.

 

Our Business

 

FSP operates in two business segments and has two principal sources of revenue; real estate operations and investment banking/investment services. Real estate operations include rental income from real estate leasing, interest income from loans made for interim acquisition or other purposes, and fee income from asset management. Investment banking/investment services generate brokerage commissions, loan origination fees, development services and other fees related to the organization of single-purpose entities that own real estate and the private placement of equity in those entities.

 

Strategy

 

FSP’s investment strategy is to make selective acquisitions based on market and/or property specific criteria, actively manage the property to maximize its value and dispose of the property when the ideal time or situation arises. Proceeds from property sales are redeployed into other specific real estate assets, used for other corporate purposes and/or paid out to shareholders as special dividends. Unlike many real estate investment companies, which have utilized significant leverage in an attempt to enhance their real estate portfolio’s returns, FSP has used very moderate leverage. FSP’s historical growth has been achieved without the use of permanent mortgage debt on any of our properties. This model has significantly reduced FSP’s risk profile by reducing foreclosure, financing and refinancing risk. The Company’s strategy is to employ modest leverage to accelerate its growth and capitalize on market conditions and opportunities as they arise. In addition, FSP believes that it can lower investment risk while enhancing current income and long-term appreciation potential by owning properties in diversified geographic locations that have sound long-term economic growth potential.

 

 

Snapshot
(as of June 30, 2011)
Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Total Properties	34
Total Square Feet	6.7 Million
Common Shares Outstanding	81,437,405
Quarterly Dividend	$0.19
Dividend Yield	5.89%
Total Market Capitalization	$1.4 Billion
Insider Holdings	12.8%

 

 

Structure of the Company

 

FSP has elected to be taxed as a Real Estate Investment Trust (REIT) under the Internal Revenue Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income to our shareholders. Management intends to continue to adhere to these requirements and to maintain our REIT status. As a REIT we are entitled to a tax deduction for some or all of the dividends we pay to shareholders. Accordingly, we generally will not be subject to federal income taxes as long as we distribute an amount equal to or in excess of our taxable income to shareholders.

 

Dividend Philosophy

 

FSP has been able to offer shareholders high-quality, risk-adjusted returns. The ongoing and recurring rental revenue stream provides stability to our regular quarterly dividend. In addition, the possibility exists for the payment of annual special dividends resulting from the sale of properties in the portfolio and the income from FSP’s investment banking business.

 

 

Board of Directors and Management
George J. Carter		Dennis J. McGillicuddy		Scott H. Carter
President, Chief Executive Officer		Director		Executive Vice President, General
Chairman of the Board		Member, Audit Committee		Counsel and Assistant Secretary
		Member, Compensation Committee
Barbara J. Fournier				John G. Demeritt
Executive Vice President,  Chief Operating Officer,		Georgia Murray		Executive Vice President and
Treasurer, Secretary and Director		Director		Chief Financial Officer
		Chair, Compensation Committee
Janet Notopoulos		Member, Audit Committee		William W. Gribbell
Executive Vice President and Director				Executive Vice President
		Barry Silverstein
John N. Burke		Director		R. Scott MacPhee
Director		Member, Audit Committee		Executive Vice President
Chair, Audit Committee		Member, Compensation Committee
Member, Compensation Committee

 

 

 

 

Corporate Headquarters		Trading Symbol		Inquiries
401 Edgewater Place, Suite 200		NYSE Amex		Inquires should be directed to:
Wakefield, MA 01880		Symbol: FSP		John Demeritt, CFO
(t) 781-557-1300				877-686-9496 or InvestorRelations@
(f) 781-246-2807				franklinstreetproperties.com
www.franklinstreetproperties.com

 

 

Common Stock Data (NYSE Amex: FSP)
	For the Three Months Ended
	30-Jun-11	31-Mar-11	31-Dec-10	30-Sep-10	30-Jun-10	31-Mar-10
High Price	14.25	15.63	14.42	12.86	15.70	15.01
Low Price	12.00	13.52	12.2	10.99	11.04	11.64
Closing Price, at the end of the quarter	12.91	14.07	14.25	12.42	11.81	14.43
Dividends paid per share – quarterly	0.19	0.19	0.19	0.19	0.19	0.19
Closing dividend yield – annualized	5.89%	5.40%	5.33%	6.12%	6.44%	5.27%
Common shares outstanding (millions)	81.44	81.44	81.44	79.84	79.68	79.68

 

 

Timing

 

Quarterly and Annual results are expected to be announced during the week ending on these dates:

 

First Quarter:	4-May-12		Third Quarter:	4-Nov-11
Second Quarter:	30-Jul-12		Fourth Quarter:	24-Feb-12

 

 

 

																										For the Year
		For the Three Months Ended																								Ended
		31-Mar-11				30-Jun-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Dec-10
Income Items:
Revenue:
Rental		$	31,100			$	34,755			$	28,588			$	27,046			$	29,222			$	29,782			$	114,638
Related party revenue			2,016				5,658				800				1,853				896				4,163				7,712
Other			6				7				9				6				20				54				89
Total revenue			33,122				40,420				29,397				28,905				30,138				33,999				122,439
Total expenses			29,336				33,589				25,320				24,488				26,987				29,258				106,053
Income before interest income, equity in earnings in non-consolidated REITs and taxes			3,786				6,831				4,077				4,417				3,151				4,741				16,386
Interest income			11				9				8				9				4				4				25
Equity in earnings in non-consolidated REITs			968				1,166				253				380				404				229				1,266
Income before taxes			4,765				8,006				4,338				4,806				3,559				4,974				17,677
Income tax expense (benefit)			50				68				(68	)			5				(37	)			317				217
Income from continuing operations			4,715				7,938				4,406				4,801				3,596				4,657				17,460
Income from discontinued operations			459				97				1,156				1,153				1,161				1,163				4,633
Gain on sale of assets			19,593				2,346				—				—								—				—
Net income		$	24,767			$	10,381			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093
FFO+GOS*:
FFO		$	16,250			$	20,140			$	16,650			$	16,702			$	16,052			$	17,518			$	66,922
GOS			19,593				2,346				—				—				—				—				—
FFO+GOS		$	35,843			$	22,486			$	16,650			$	16,702			$	16,052			$	17,518			$	66,922
Per Share Data:
EPS		$	0.30			$	0.13			$	0.07			$	0.07			$	0.06			$	0.07			$	0.28
FFO			0.20				0.25				0.21				0.21				0.20				0.22				0.84
GOS			—				—				—				—				—				—				—
FFO+GOS			0.44				0.28				0.21				0.21				0.20				0.22				0.84
Weighted Average Shares (diluted)			81,437				81,437				79,681				79,681				79,751				80,187				79,826
Balance Sheet Items:
Real estate, net		$	979,560			$	976,131			$	778,409			$	798,058			$	796,289			$	862,698			$	862,698
Other assets, net			387,342				327,633				372,139				387,141				391,270				376,037				376,037
Total assets, net			1,366,902				1,303,764				1,150,548				1,185,199				1,187,559				1,238,735				1,238,735
Total liabilities, net			435,801				377,374				222,771				266,347				277,272				317,177				317,177
Shareholders' equity			931,101				926,390				927,777				918,852				910,287				921,558				921,558

 

* See page 27 for a reconciliation of Net Income to FFO and FFO+GOS and page 28 for definitions of FFO and FFO+GOS

 

 

 

 

 

* See page 27 for a reconciliation of Net Income to FFO and FFO+GOS (Total Profits) and page 28 for definitions of FFO and FFO+GOS

 

 

																										For the
		For the Three Months Ended																								Year Ended
		31-Mar-11				30-Jun-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Dec-10
Revenue:
Rental		$	31,100			$	33,605			$	28,588			$	27,046			$	29,222			$	29,782			$	114,638
Related party revenue:
Syndication fees			517				2,973				121				541				20				1,862				2,544
Transaction fees			691				2,685				146				753				246				1,582				2,727
Management fees and interest income from loans			808				1,150				533				559				630				719				2,441
Other			6				7				9				6				20				54				89
Total revenue			33,122				40,420				29,397				28,905				30,138				33,999				122,439
Expenses:
Real estate operating expenses			8,730				8,765				7,949				7,335				8,714				9,602				33,600
Real estate taxes and insurance			4,759				5,228				4,973				4,038				4,636				4,430				18,077
Depreciation and amortization			10,783				12,067				8,461				8,485				9,655				9,729				36,330
Selling, general and administrative			2,368				2,396				2,171				2,559				2,074				2,482				9,286
Commissions			288				1,555				114				336				16				1,011				1,477
Interest			2,408				3,578				1,652				1,735				1,892				2,004				7,283
Total expenses			29,336				33,589				25,320				24,488				26,987				29,258				106,053
Income before interest income, equity in earnings of
non-consolidated REITs and taxes			3,786				6,831				4,077				4,417				3,151				4,741				16,386
Interest income			11				9				8				9				4				4				25
Equity in earnings of non-consolidated REITs			968				1,166				253				380				404				229				1,266
			4,765				8,006				4,338				4,806				3,559				4,974				17,677
Income tax expense (benefit)			50				68				(68	)			5				(37	)			317				217
Income from continuing operations			4,715				7,938				4,406				4,801				3,596				4,657				17,460
Income from discontinued operations			459				97				1,156				1,153				1,161				1,163				4,633
Gain on sale of assets			19,593				2,346				—				—				—				—				—
Net income		$	24,767			$	10,381			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093
Weighted average number of shares outstanding,
basic and diluted			81,437				81,437				79,681				79,681				79,751				80,187				79,826
Earnings per share, basic and diluted, attributable to:
Continuing operations		$	0.06			$	0.10			$	0.06			$	0.06			$	0.05			$	0.06			$	0.22
Discontinued operations			0.01				0.00				0.01				0.01				0.01				0.01				0.06
Gains on sales of assets			0.24				0.03				—				—				—				—				—
Net income per share, basic and diluted		$	0.30			$	0.13			$	0.07			$	0.07			$	0.06			$	0.07			$	0.28

 

 

 

 

* See page 27 for a reconciliation of Net Income to FFO and FFO+GOS (Total Profits) and page 28 for definitions of FFO and FFO+GOS

 

 

		March 31,				June 30,				March 31,				June 30,				September 30,				December 31,
		2011				2011				2010				2010				2010				2010
Assets:
Real estate assets:
Land		$	129,800			$	129,800			$	101,322			$	109,950			$	109,950			$	121,720
Buildings and improvements			978,876				982,821				779,033				795,515				799,339				863,317
Fixtures and equipment			600				726				354				458				458				578
			1,109,276				1,113,347				880,709				905,923				909,747				985,615
Less accumulated depreciation			129,716				137,216				102,300				107,865				113,458				122,917
Real estate assets, net			979,560				976,131				778,409				798,058				796,289				862,698
Acquired real estate leases, net			85,290				81,455				30,822				45,871				43,185				40,578
Investment in non-consolidated REITs			88,652				88,654				91,787				90,782				89,995				89,327
Assets held for syndication, net			47,630				11,206				2,791				—				—				2,976
Assets held for sale			5,108				—				148,472				147,225				145,981				74,947
Cash and cash equivalents			49,488				28,881				22,815				21,487				20,554				68,213
Restricted cash			440				459				50				59				55				420
Tenant rent receivables, net			1,688				1,846				1,385				900				2,123				1,922
Straight-line rent receivable, net			20,838				23,745				13,584				14,153				15,183				18,752
Prepaid expenses			1,400				1,255				2,236				2,280				2,511				1,654
Related party mortgage loan receivable			60,116				61,916				41,325				46,270				53,756				57,684
Other assets			6,339				6,237				1,220				1,620				1,387				1,188
Deferred leasing commissions, net			20,353				21,979				15,652				16,494				16,540				18,376
Total assets		$	1,366,902			$	1,303,764			$	1,150,548			$	1,185,199			$	1,187,559			$	1,238,735
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable		$	404,000			$	345,000			$	119,968			$	162,968			$	167,968			$	209,968
Term loan payable			—				—				75,000				75,000				75,000				74,850
Accounts payable and accrued expenses			20,562				21,431				20,467				18,766				25,064				22,435
Accrued compensation			603				1,070				274				1,040				1,334				1,803
Tenant security deposits			2,533				2,476				1,696				2,004				1,922				1,930
Other liabilities: derivative termination value			828				447				1,995				1,735				1,416				1,077
Acquired unfavorable real estate leases, net			7,275				6,950				3,371				4,834				4,568				5,114
Total liabilities			435,801				377,374				222,771				266,347				277,272				317,177
Commitments and contingencies
Stockholders’ Equity:
Preferred stock			—				—				—				—				—				—
Common stock			8				8				8				8				8				8
Additional paid-in capital			1,025,491				1,025,491				1,003,712				1,003,712				1,005,211				1,025,491
Accumulated other comprehensive loss			(828	)			(447	)			(1,995	)			(1,735	)			(1,416	)			(1,077	)
Accumulated distributions in excess of accumulated earnings			(93,570	)			(98,662	)			(73,948	)			(83,133	)			(93,516	)			(102,864	)
Total stockholders’ equity			931,101				926,390				927,777				918,852				910,287				921,558
Total liabilities and stockholders’ equity		$	1,366,902			$	1,303,764			$	1,150,548			$	1,185,199			$	1,187,559			$	1,238,735

 

 

		Six Months ended June 30,								Twelve Months ended December 31
		2011				2010				2010				2009				2008
Cash flows from operating activities:
Net income		$	35,148			$	11,516			$	22,093			$	27,872			$	31,959
Adjustments to reconcile net income to net cash         provided by  operating activities:
Gains on assets sold			(21,939	)			—				—				(424	)			—
Depreciation and amortization expense			23,670				18,597				39,627				36,561				30,444
Amortization of above market lease			(62	)			1,147				1,362				3,359				4,283
Equity in earnings (losses) from non-consolidated REITs			(2,844	)			(633	)			(1,183	)			(2,012	)			(2,747	)
Distributions from non-consolidated REITs			2,982				2,731				5,170				5,628				5,348
Increase in bad debt reserve			(365	)			480				980				111				79
Changes in operating assets and liabilities:
Restricted cash			(39	)			275				(86	)			2				—
Tenant rent receivables			441				402				(1,120	)			(564	)			64
Straight-line rents			(5,176	)			(1,759	)			(4,249	)			(1,879	)			(1,406	)
Prepaid expenses and other assets			914				(224	)			865				907				(901	)
Accounts payable and accrued expenses			(726	)			(4,139	)			(351	)			2,760				448
Accrued compensation			(733	)			(376	)			387				(238	)			90
Tenant security deposits			546				196				122				(66	)			—
Payment of deferred leasing commissions			(5,386	)			(7,085	)			(10,515	)			(2,659	)			(3,353	)
Net cash provided by operating activities			26,431				21,128				53,102				69,358				64,308
Cash flows from investing activities:
Purchase of real estate assets, office computers and          furniture, capitalized merger costs and acquired          real estate leases			(173,086	)			(45,848	)			(54,344	)			(132,323	)			(78,396	)
Investment in non-consolidated REITs			(10	)			—				(11	)			(13,218	)			(10	)
Investment in related party mortgage loan receivable			(4,232	)			(9,735	)			(21,149	)			(35,410	)			(1,125	)
Changes in deposits on real estate assets			200				—				(200	)			—				(1,300	)
Investment in assets held for syndication, net			(8,200	)			4,858				1,319				8,159				12,236
Proceeds received on sales of real estate assets			96,790				—				—				672				—
Net cash used in investing activities			(88,538	)			(50,725	)			(74,385	)			(172,120	)			(68,595	)
Cash flows from financing activities:
Distributions to stockholders			(30,946	)			(30,279	)			(60,586	)			(55,313	)			(70,481	)
Proceeds (costs) from equity offering, net			(90	)			(1	)			21,868				114,695				—
Borrowings under New Revolver, net			345,000				—				—				—				—
Borrowings (repayments) under Revolver			(209,968	)			—				100,960				41,540				(17,282	)
Borrowing (repayment) of term loan payable, net			(74,850	)			53,960				(150	)			—				75,000
Deferred Financing Costs			(5,389	)			—				—				—				(694	)
Swap termination payment			(982	)			—				—				—				—
Net cash (used in) provided by financing activities			22,775				23,680				62,092				100,922				(13,457	)
Net decreases in cash and cash equivalents			(39,332	)			(5,917	)			40,809				(1,840	)			(17,744	)
Cash and cash equivalents, beginning of period			68,213				27,404				27,404				29,244				46,988
Cash and cash equivalents, end of period		$	28,881			$	21,487			$	68,213			$	27,404			$	29,244

 

 

		Three Months Ended June 30, 2011												Three Months Ended June 30, 2010												Six Months Ended June 30, 2011												Six Months Ended June 30, 2010
		Real				Investment								Real				Investment								Real				Investment								Real				Investment
		Estate				Banking				Total				Estate				Banking				Total				Estate				Banking				Total				Estate				Banking				Total
Revenue:
Rental Income		$	33,605			$	—			$	33,605			$	27,046			$	—			$	27,046			$	64,705			$	—			$	64,705			$	55,634			$	—			$	55,634
Syndication Fees			—				2,973				2,973				—				541				541				—				3,490				3,490				—				662				662
Transaction Fees			—				2,685				2,685				—				753				753				—				3,376				3,376				—				899				899
Management Fees & Interest Income			1,150				—				1,150				559				—				559				1,958				—				1,958				1,091				—				1,091
Other Income			7				—				7				6				—				6				13				—				13				15				—				15
Total Revenue			34,762				5,658				40,420				27,611				1,294				28,905				66,676				6,866				73,542				56,740				1,561				58,301
Expenses
Rental Operating Expenses			8,765				—				8,765				7,335				—				7,335				17,495				—				17,495				15,284				—				15,284
Real Estate Taxes and Insurance			5,228				—				5,228				4,038				—				4,038				9,987				—				9,987				9,011				—				9,011
Depreciaton and Amortization			12,029				38				12,067				8,446				39				8,485				22,774				76				22,850				16,873				72				16,945
Selling, general  and administrative			1,601				795				2,396				1,851				708				2,559				3,246				1,518				4,764				3,299				1,432				4,731
Commissions and  Broker Expenses			—				1,555				1,555				—				336				336				—				1,843				1,843				—				450				450
Interest & Commitment Fees			3,578				—				3,578				1,735				—				1,735				5,986				—				5,986				3,387				—				3,387
Total Expenses			31,201				2,388				33,589				23,405				1,083				24,488				59,488				3,437				62,925				47,854				1,954				49,808
Income before Equity, Interest and Taxes			3,561				3,270				6,831				4,206				211				4,417				7,188				3,429				10,617				8,886				(393	)			8,493
Interest Income			5				4				9				9				—				9				15				5				20				17				—				17
Equity Income SARs			1,166				—				1,166				380				—				380				2,134				—				2,134				633				—				633
Income before Taxes			4,732				3,274				8,006				4,595				211				4,806				9,337				3,434				12,771				9,536				(393	)			9,143
Income Taxes			68				—				68				57				(52	)			5				118				—				118				113				(177	)			(64	)
Income from continuing operations			4,664				3,274				7,938				4,538				263				4,801				9,219				3,434				12,653				9,423				(216	)			9,207
Income from discontinued operations			97				—				97				1,153				—				1,153				556				—				556				2,309				—				2,309
Gain on sale of assets			2,346				—				2,346				—				—				—				21,939				—				21,939				—				—				—
Net Income (loss)		$	7,107			$	3,274			$	10,381			$	5,691			$	263			$	5,954			$	31,714			$	3,434			$	35,148			$	11,732			$	(216	)		$	11,516
Funds From Operations (FFO)*
Net Income		$	7,107			$	3,274			$	10,381			$	5,691			$	263			$	5,954			$	31,714			$	3,434			$	35,148			$	11,732			$	(216	)		$	11,516
Gain on sale of assets, net			(2,346	)			—				(2,346	)			—				—				—				(21,939	)			—				(21,939	)			—				—				—
Equity in income of SARs			(1,166	)			—				(1,166	)			(380	)			—				(380	)			(2,938	)			—				(2,938	)			(633	)			—				(633	)
Cash received from SARs			1,215				—				1,215				1,324				—				1,324				2,982				—				2,982				2,731				—				2,731
Acquisition costs			9				—				9				129				—				129				278				—				278				129				—				129
Depreciation and amortization			12,009				38				12,047				9,636				39				9,675				22,783				76				22,859				19,537				72				19,609
Funds From Operations (FFO)*			16,828				3,312				20,140				16,400				302				16,702				32,880				3,510				36,390				33,496				(144	)			33,352
EPS		$	0.08			$	0.04			$	0.13			$	0.06			$	0.00			$	0.07			$	0.39			$	0.04			$	0.43			$	0.15			$	—			$	0.14
FFO per Share*		$	0.21			$	0.04			$	0.25			$	0.21			$	0.00			$	0.21			$	0.41			$	0.04			$	0.45			$	0.43			$	—			$	0.42
Weighted Average Shares											81,437												79,681												81,437												79,681

 

 

		Year Ended December 31, 2010												Year Ended December 31, 2009												Year Ended December 31, 2008
						Investment												Investment												Investment
		Real Estate				Banking				Total				Real Estate				Banking				Total				Real Estate				Banking				Total
Revenue:
Rental Income		$	114,638			$	—			$	114,638			$	119,341			$	—			$	119,341			$	110,531			$	—			$	110,531
Syndication Fees			—				2,544				2,544				—				2,428				2,428				—				3,766				3,766
Transaction Fees			—				2,727				2,727				—				2,080				2,080				—				3,641				3,641
Management Fees & Interest Income			2,439				—				2,439				1,740				—				1,740				1,739				—				1,739
Other Income			89				—				89				61				—				61				72				—				72
Total Revenue			117,166				5,271				122,437				121,142				4,508				125,650				112,342				7,407				119,749
Expenses
Rental Operating Expenses			33,600				—				33,600				30,807				—				30,807				28,966				—				28,966
Real Estate Taxes and Insurance			18,077				—				18,077				18,892				—				18,892				17,655				—				17,655
Depreciaton and Amortization			36,156				173				36,329				35,303				123				35,426				30,078				138				30,216
Selling, general  and administrative			6,399				2,887				9,286				4,452				4,062				8,514				4,229				4,039				8,268
Commissions and  Broker Expenses			—				1,477				1,477				—				1,801				1,801				100				2,051				2,151
Interest & Commitment Fees			7,283				—				7,283				6,570				—				6,570				4,921				—				4,921
Total Expenses			101,515				4,537				106,052				96,024				5,986				102,010				85,949				6,228				92,177
Income before Equity, Interest and Taxes			15,651				734				16,385				25,118				(1,478	)			23,640				26,393				1,179				27,572
Interest Income			24				1				25				92				4				96				709				36				745
Equity Income SARs			1,266				—				1,266				1,994				—				1,994				2,747				—				2,747
Income before Taxes			16,941				735				17,676				27,204				(1,474	)			25,730				29,849				1,215				31,064
Income Taxes			217				—				217				248				(827	)			(579	)			246				(736	)			(490	)
Income from continuing operations			16,724				735				17,459				26,956				(647	)			26,309				29,603				1,951				31,554
Income from discontinued operations			4,634				—				4,634				1,139				—				1,139				405				—				405
Gain on sale of assets			—				—				—				424				—				424				—				—				—
Net Income		$	21,358			$	735			$	22,093			$	28,519			$	(647	)		$	27,872			$	30,008			$	1,951			$	31,959
Funds From Operations (FFO)*
Net Income		$	21,358			$	735			$	22,093			$	28,519			$	(647	)		$	27,872			$	30,008			$	1,951			$	31,959
Gain on sale of assets, net			—				—				—				(424	)			—				(424	)			—				—				—
Equity in income of SARs			(1,190	)			—				(1,190	)			(2,012	)			—				(2,012	)			(2,747	)			—				(2,747	)
Cash received from SARs			5,170				—				5,170				5,628				—				5,628				5,348				—				5,348
Acquisition costs			125				—				125				643				—				643				—				—				—
Depreciation and amortization			40,551				173				40,724				39,529				123				39,652				34,505				138				34,643
Funds From Operations (FFO)*			66,014				908				66,922				71,883				(524	)			71,359				67,114				2,089				69,203
EPS		$	0.27			$	0.01			$	0.28			$	0.39			$	(0.01	)		$	0.38			$	0.43			$	0.03			$	0.45
FFO per Share*		$	0.83			$	0.01			$	0.84			$	0.99			$	(0.01	)		$	0.98			$	0.95			$	0.03			$	0.98
Weighted Average Shares											79,826												73,001												70,481

 

*See page 27 for a reconciliation of Net Income to FFO and FFO+GOS and page 28 for definitions of FFO and FFO+GOS

 

 

Property NOI Cash*
										Three Months Ended								Three Months Ended																Year
						30-Jun-11																												Ended
Region		Division				Sq Feet				31-Mar-11				30-Jun-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				2010
Eastern			Mideast				1,452			$	3,476			$	3,840			$	4,031			$	4,390			$	5,551			$	4,931			$	18,903
Midwest			East North Central				597				1,586				1,057				1,103				1,574				1,184				1,123				4,984
			West North Central				1,104				2,405				2,909				2,034				2,000				2,991				3,028				10,053
							1,701				3,991				3,966				3,137				3,574				4,175				4,151				15,037
South			Southeast				600				2,068				2,023				2,307				2,251				2,285				1,917				8,760
			Southwest				1,906				3,747				4,907				4,234				4,238				3,597				3,564				15,633
							2,506				5,815				6,930				6,541				6,489				5,882				5,481				24,393
West			Mountain				790				922				1,311				3,254				2,212				810				894				7,170
			Pacific				299				518				523				443				491				498				480				1,912
							1,089				1,440				1,834				3,697				2,703				1,308				1,374				9,082
Total							6,748			$	14,722			$	16,570			$	17,406			$	17,156			$	16,916			$	15,937			$	67,415

 

Property NOI GAAP*
										Three Months Ended								Three Months Ended																Year
						30-Jun-11																												Ended
Region		Division				Sq Feet				31-Mar-11				30-Jun-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				2010
Eastern			Mideast				1,452			$	4,007			$	4,486			$	4,666			$	5,002			$	5,992			$	5,362			$	21,022
Midwest			East North Central				597				1,552				1,027				1,110				1,602				1,210				1,166				5,088
			West North Central				1,104				2,886				2,986				2,164				2,106				3,136				3,135				10,541
							1,701				4,438				4,013				3,274				3,708				4,346				4,301				15,629
South			Southeast				600				1,572				2,093				2,356				2,355				2,359				2,033				9,103
			Southwest				1,906				4,629				6,558				4,404				4,395				3,797				3,778				16,374
							2,506				6,201				8,651				6,760				6,750				6,156				5,811				25,477
West			Mountain				790				1,162				1,715				3,229				2,502				1,100				1,231				8,062
			Pacific				299				555				577				497				533				524				513				2,067
							1,089				1,717				2,292				3,726				3,035				1,624				1,744				10,129
Total							6,748			$	16,363			$	19,442			$	18,426			$	18,495			$	18,118			$	17,218			$	72,257

 

*See page 31 for a reconciliation and definition of Net Income to Property NOI cash and Property NOI GAAP.

 

 

		31-Mar-11				30-Jun-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10
Market Data:
Shares Outstanding			81,437				81,437				79,681				79,681				79,837				81,437
Closing market price per share		$	14.07			$	12.91			$	14.43			$	11.81			$	12.42			$	14.25
Market capitalization		$	1,145,824			$	1,051,357			$	1,149,793			$	941,029			$	991,581			$	1,160,483
Total Debt			404,000				345,000				194,968				237,968				242,968			$	284,118
Total Market Capitalization		$	1,549,824			$	1,396,357			$	1,344,761			$	1,178,997			$	1,234,549			$	1,444,601
Dividend Data:
Total dividends paid		$	15,473			$	15,473			$	15,139			$	15,139			$	15,139			$	15,169
Common dividend per share		$	0.19			$	0.19			$	0.19			$	0.19			$	0.19			$	0.19
Quarterly dividend as a % of FFO*			95%				76%				90%				90%				95%				86%
Liquidity:
Cash and cash equivalents		$	49,488			$	28,881			$	22,815			$	21,487			$	20,554			$	68,213
Revolving credit facilities:
Gross potential available under current credit facilities			500,000				600,000				250,000				250,000				250,000				250,000
Less:
Outstanding balance			(404,000	)			(345,000	)			(119,968	)			(162,968	)			(167,968	)			(209,968	)
Total Liquidity		$	145,488			$	283,881			$	152,847			$	108,519			$	102,586			$	108,245

 

*See page 27 for a reconciliation of Net Income to FFO and FFO+GOS and page 28 for definitions of FFO and FFO+GOS

 

 

Property by Form of FSP Participation

	30-Jun-11	31-Mar-11	31-Dec-10	30-Sep-10	30-Jun-10	31-Mar-10
Owned portfolio of commercial real estate:
Number of properties (1)	34	35	33	33	33	32
Square feet	6,747,815	6,845,176	6,422,357	6,417,299	6,418,835	5,942,299
Leased percentage	87%	88%	86%	82%	85%	85%
Investments in non-consolidated commercial real estate:
Number of properties	3	3	3	3	3	3
Square feet	1,996,457	1,995,932	1,995,913	1,998,519	1,998,519	1,995,041
Leased percentage	82%	85%	77%	76%	77%	78%
Single Asset REITs (SARs) managed:
Number of properties	13	13	12	11	11	11
Square feet *	3,322,569	3,325,694	2,915,896	2,702,287	2,406,370	2,406,370
Leased percentage*	79%	79%	75%	73%	76%	76%
Total owned, investments and managed properties:
Number of properties	50	51	48	47	47	46
Square feet *	12,066,841	12,166,802	11,334,166	11,118,105	10,823,724	10,343,710
Leased percentage*	84%	85%	81%	79%	82%	82%

 

(1) Includes asset held for sale for 12/31/10 and prior periods

*Prior to September 30, 2010, excludes a property that completed construction on July 9, 2010 with approximately 295,891 square feet

 

 

Owned:
Name	City	State	Region	Square Feet
Park Seneca	Charlotte	NC	East	109,550
Forest Park	Charlotte	NC	East	62,212
Emperor Boulevard	Durham	NC	East	259,531
Meadow Point	Chantilly	VA	East	138,537
Stonecroft	Chantilly	VA	East	111,469
Innsbrook	Glen Allen	VA	East	310,060
East Baltimore	Baltimore	MD	East	325,445
Loudoun Tech Center	Dulles	VA	East	135,888
Southfield Centre	Southfield	MI	MidWest	214,697
Northwest Point	Elk Grove Village	IL	MidWest	176,848
River Crossing	Indianapolis	IN	MidWest	205,059
Timberlake	Chesterfield	MO	MidWest	232,766
Timberlake East	Chesterfield	MO	MidWest	116,197
Lakeside Crossing	Maryland Heights	MO	MidWest	127,778
Eden Bluff	Eden Prairie	MN	MidWest	153,028
121 South 8th Street	Minneapolis	MN	MidWest	473,979
Blue Lagoon Drive	Miami	FL	South	212,619
One Overton Place	Atlanta	GA	South	387,267
Willow Bend Office Center	Plano	TX	South	116,622
Legacy Tennyson Center	Plano	TX	South	202,600
One Legacy Circle	Plano	TX	South	214,110
Park Ten	Houston	TX	South	155,715
Addison Circle	Addison	TX	South	293,787
Collins Crossing	Richardson	TX	South	298,766
Eldridge Green	Houston	TX	South	248,399
Park Ten Phase II	Houston	TX	South	156,746
Liberty Plaza	Addison	TX	South	218,934
Centennial Technology Center	Colorado Springs	CO	West	110,730
380 Interlocken	Broomfield	CO	West	240,184
Greenwood Plaza	Englewood	CO	West	197,527
390 Interlocken	Broomfield	CO	West	241,516
Hillview Center	Milpitas	CA	West	36,288
Federal Way	Federal Way	WA	West	117,010
Montague Business Center	San Jose	CA	West	145,951
Total				6,747,815
Managed:
Name	City	State	Region	Square Feet
1441 Main Street	Columbia	SC	East	264,857
303 East Wacker Drive	Chicago	IL	MidWest	844,953
Monument Circle	Indianapolis	IN	MidWest	213,609
505 Waterford	Plymouth	MN	MidWest	256,348
50 South Tenth Street	Minneapolis	MN	MidWest	498,768
Grand Boulevard	Kansas City	MO	MidWest	532,472
Lakeside Crossing II	Maryland Heights	MO	MidWest	116,000
Centre Pointe V	West Chester	OH	MidWest	135,936
Union Centre	West Chester	OH	MidWest	409,798
Satellite Place	Duluth	GA	South	134,785
5601 Executive Drive	Irving	TX	South	152,121
Galleria North	Dallas	TX	South	379,518
Energy Tower I	Houston	TX	South	325,796
Phoenix Tower	Houston	TX	South	619,032
Highland Place I	Centennial	CO	West	139,142
385 Interlocken	Broomfield	CO	West	295,891
Total				5,319,026

 

Properties by Division/Region
($ in thousands)
							NBV (a)		% Leased
	# of Properties		Square Feet		% of Portfolio		30-Jun-11		30-Jun-11
East Region Total	8		1,452,692		21.5%		$    225,012		80.8%
East North Central Division	3		596,604		8.8%		78,367		75.9%
West North Central	5		1,103,748		16.4%		107,018		96.3%
Midwest Region Total	8		1,700,352		25.2%		185,385		89.1%
Southeast	2		599,886		8.9%		119,108		94.2%
Southwest	9		1,905,679		28.2%		285,547		92.2%
South Region Total	11		2,505,565		37.1%		404,655		92.7%
Mountain	4		789,957		11.8%		124,843		78.1%
Pacific	3		299,249		4.4%		36,236		77.3%
West Region Total	7		1,089,206		16.2%		161,079		77.9%
Grand Total	34		6,747,815		100.0%		$     976,131		86.9%
(a) NBV is for real estate assets, excluding intangibles

 

 

 

 

 

					NBV (1)	% Leased
Division	Name	City	State	S.F.	30-Jun-11	30-Jun-11
Pacific	Hillview Center	Milpitas	CA	36	4,137	100.0%
Pacific	Montague	San Jose	CA	146	17,606	100.0%
Mountain	380 Interlocken	Broomfield	CO	240	42,624	85.1%
Mountain	390 Interlocken	Broomfield	CO	242	42,390	95.9%
Mountain	Centennial Technology Center	Colorado Springs	CO	111	11,263	66.9%
Mountain	Greenwood Plaza	Englewood	CO	197	28,566	54.3%
Southeast	Blue Lagoon Drive	Miami	FL	213	46,393	100.0%
Southeast	One Overton Place	Atlanta	GA	387	72,714	91.1%
East North Central	Northwest Point	Elk Grove Village	IL	177	28,142	100.0%
East North Central	River Crossing	Indianapolis	IN	205	35,211	93.5%
Mideast	East Baltimore	Baltimore	MD	325	54,938	55.7%
East North Central	Southfield Centre	Southfield	MI	215	15,013	39.2%
West North Central	Eden Bluff	Eden Prairie	MN	153	14,240	100.0%
West North Central	121 South 8th Street	Minneapolis	MN	474	23,695	92.5%
West North Central	Timberlake	Chesterfield	MO	233	34,494	97.7%
West North Central	Timberlake East	Chesterfield	MO	116	17,568	100.0%
West North Central	Lakeside Crossing	Maryland Heights	MO	128	17,022	100.0%
Mideast	Park Seneca	Charlotte	NC	109	7,440	80.1%
Mideast	Forest Park	Charlotte	NC	62	6,145	100.0%
Mideast	Emperor Boulevard	Durham	NC	259	55,959	100.0%
Southwest	Addison Circle	Addison	TX	294	47,566	95.8%
Southwest	Liberty Plaza	Addison	TX	219	24,396	75.6%
Southwest	Park Ten	Houston	TX	156	18,185	98.8%
Southwest	Eldridge Green	Houston	TX	248	41,933	100.0%
Southwest	Park Ten Phase II	Houston	TX	157	30,495	100.0%
Southwest	Willow Bend Office Center	Plano	TX	117	18,020	83.1%
Southwest	Legacy Tennyson Center	Plano	TX	203	24,943	100.0%
Southwest	One Legacy Circle	Plano	TX	214	38,964	100.0%
Southwest	Collins Crossing	Richardson	TX	299	41,045	79.7%
Mideast	Meadow Point	Chantilly	VA	139	23,521	100.0%
Mideast	Stonecroft	Chantilly	VA	111	19,181	100.0%
Mideast	Loudoun Tech Center	Dulles	VA	136	17,247	100.0%
Mideast	Innsbrook	Glen Allen	VA	310	40,582	63.7%
Pacific	Federal Way	Federal Way	WA	117	14,493	42.0%
				6,748	$    976,131	86.9%
	(1) NBV is for real estate assets, excluding intangibles

 

 

													Percentage				Average
							Year Built						Leased		Annualized Rent		Annualized
							or		Net Rentable		Leased		as of June 30,		as of June 30,		Rent per Leased
Property Name		City		State	Type		Renovated		Square Feet		Sq. Ft.		2011 (a)		2011 (b)		Square Feet (c)
Park Seneca		Charlotte		NC	Office		1969		109,550		87,754		80.1%		1,360,434		$    15.50
Forest Park		Charlotte		NC	Office		1999		62,212		62,212		100.0%		619,363		9.96
Meadow Point		Chantilly		VA	Office		1999		138,537		138,537		100.0%		3,502,484		25.28
Innsbrook		Glen Allen		VA	Office		1999		310,060		197,418		63.7%		488,595		2.47
East Baltimore		Baltimore		MD	Office		1989		325,445		181,298		55.7%		4,581,920		25.27
Loudoun Tech Center		Dulles		VA	Office		1999		135,888		135,888		100.0%		1,788,430		13.16
Stonecroft		Chantilly		VA	Office		2008		111,469		111,469		100.0%		4,035,422		36.20
Emperor Boulevard		Durham		NC	Office		2009		259,531		259,531		100.0%		8,190,181		31.56
East total									1,452,692		1,174,107		80.8%		24,566,829		20.92
Southfield Centre		Southfield		MI	Office		1977		214,697		84,205		39.2%		962,442		11.43
Northwest Point		Elk Grove Village		IL	Office		1999		176,848		176,848		100.0%		3,511,335		19.86
River Crossing		Indianapolis		IN	Office		1998		205,059		191,769		93.5%		4,623,996		24.11
Timberlake		Chesterfield		MO	Office		1999		232,766		227,292		97.7%		4,331,194		19.06
Timberlake East		Chesterfield		MO	Office		2000		116,197		116,197		100.0%		2,836,089		24.41
Lakeside Crossing		Sl. Louis		MO	Office		2008		127,778		127,778		100.0%		3,153,561		24.68
Eden Bluff		Eden Praire		MN	Office		2006		153,028		153,028		100.0%		3,984,757		26.04
121 South 8th Street		Minneapolis		MN	Office		1974		473,979		438,466		92.5%		6,674,280		15.22
Midwest total									1,700,352		1,515,583		89.1%		30,077,654		19.85
Blue Lagoon Drive		Miami		FL	Office		2002		212,619		212,619		100.0%		4,440,795		20.89
One Overton Place		Atlanta		GA	Office		2002		387,267		352,603		91.1%		7,082,749		20.09
Willow Bend Office Center		Plano		TX	Office		1999		116,622		96,912		83.1%		1,142,717		11.79
Park Ten		Houston		TX	Office		1999		155,715		153,820		98.8%		2,827,506		18.38
Addison Circle		Addison		TX	Office		1999		293,787		281,503		95.8%		6,756,746		24.00
Collins Crossing		Richardson		TX	Office		1999		298,766		237,964		79.7%		2,358,180		9.91
Eldridge Green		Houston		TX	Office		1999		248,399		248,399		100.0%		7,150,326		28.79
Park Ten Phase II		Houston		TX	Office		2006		156,746		156,746		100.0%		4,053,995		25.86
Liberty Plaza		Addison		TX	Office		1985		218,934		165,426		75.6%		3,178,859		19.22
Denbury Park		Plano		TX	Office		1999/2008		202,600		202,600		100.0%		3,290,040		16.24
One Legacy Circle		Plano		TX	Office		2008		214,110		214,110		100.0%		3,366,355		15.72
South Total									2,505,565		2,322,702		92.7%		45,648,268		19.65
Centennial Technology Center		Colorado Springs		CO	Office		1999		110,730		74,030		66.9%		1,284,850		17.36
380 Interlocken		Broomfield		CO	Office		2000		240,184		204,347		85.1%		5,531,535		27.07
Greenwood Plaza		Englewood		CO	Office		2000		197,527		107,157		54.3%		632,385		5.90
390 Interlocken		Broomfield		CO	Office		2002		241,516		231,676		95.9%		6,277,829		27.10
Hillview Center		Milpitas		CA	Office		1984		36,288		36,288		100.0%		538,494		14.84
Federal Way		Federal Way		WA	Office		1982		117,010		49,149		42.0%		661,914		13.47
Montague Business Center		San Jose		CA	Office		1982		145,951		145,951		100.0%		2,217,622		15.19
West Total									1,089,206		848,598		77.9%		17,144,629		20.20
Grand Total									6,747,815		5,860,990		86.9%		$   117,437,380		$     20.04

 

(a) Based on all leases in effect, including month-to-month tenants, divided by the Property's net rentable square footage.

(b) Represents gross rental charges for the month of June 2011 (including month-to-month leases) multiplied by 12, which can result in unusual per square foot amounts calculated when there are free rent periods (usually with new leases).

(c) Represents the annualized rent as of June 2011 divided by leased square feet.

 

 

										Six Months
		For the Three Months Ended								Ended
		31-Mar-11				30-Jun-11				30-Jun-11
Tenant improvements		$	2,506			$	3,215			$	5,721
Deferred leasing costs			2,819				2,567				5,386
Building improvements			449				876				1,325
Total		$	5,774			$	6,658			$	12,432

 

																		Year
		For the Three Months Ended																Ended
		31-Mar-10				30-Jun-10				29-Sep-10				31-Dec-10				31-Dec-10
Tenant improvements		$	1,305			$	935			$	3,634			$	1,126			$	7,000
Deferred leasing costs			5,566				1,519				808				2,622				10,515
Building improvements			380				498				671				1,053				2,602
Total		$	7,251			$	2,952			$	5,113			$	4,801			$	20,117

 

																		Year
		For the Three Months Ended																Ended
		31-Mar-09				30-Jun-09				30-Sep-09				31-Dec-09				31-Dec-09
Tenant improvements		$	1,373			$	912			$	931			$	1,528			$	4,744
Deferred leasing costs			162				1,395				645				457				2,659
Building improvements			466				116				265				619				1,466
Total		$	2,001			$	2,423			$	1,841			$	2,604			$	8,869

 

																		Year
		For the Three Months Ended																Ended
		31-Mar-08				30-Jun-08				30-Sep-08				31-Dec-08				31-Dec-08
Tenant improvements		$	2,337			$	560			$	1,667			$	823			$	5,387
Deferred leasing costs			817				1,313				305				919				3,354
Building improvements			197				372				740				419				1,728
Total		$	3,351			$	2,245			$	2,712			$	2,161			$	10,469

 

 

			Remaning	Aggregate	% of Aggregate	Annualized	% of
	Tenant	Number of	Lease Term	Leased	Leased	Rent (1)	Aggregate
	Name	Leases	in Months	Square Feet	Square Feet	(in 000's)	Annualized Rent
1	TCF National Bank	2	54	267,470	3.96%	$     2,862,860	2.44%
2	Quintiles Transnational Corporation	1	93	259,531	3.85%	8,143,405	6.93%
3	CITGO Petroleum Corporation	1	128	248,399	3.68%	7,150,326	6.09%
4	Burger King Corporation	1	87	212,619	3.15%	4,440,795	3.78%
5	Denbury Onshore, LLC	2	61	202,600	3.00%	3,290,040	2.80%
6	RGA Reinsurance Company	2	42	185,501	2.75%	3,799,527	3.24%
7	Citicorp Credit Services, Inc (a)	1	66	176,848	2.62%	3,511,335	2.99%
8	C.H. Robinson Worldwide, Inc	1	120	153,028	2.27%	3,984,757	3.39%
9	SunTrust Bank	2	64,123	150,142	2.23%	1,392,682	1.19%
10	Murphy Exploration & Production Company	1	70	144,677	2.14%	3,770,499	3.21%
11	Giesecke & Devrient America, Inc	1	44	135,888	2.01%	1,788,430	1.52%
12	Monsanto Company	1	43	127,778	1.89%	3,153,561	2.69%
13	Vail Holdings, Inc	1	141	121,913	1.81%	3,156,070	2.69%
14	Northrop Grumman Systems Corporation	1	82	111,469	1.65%	4,035,422	3.44%
15	Alliance Data Systems	1	108,120	96,749	1.43%	125,292	0.11%
16	Federal National Mortgage Association	1	26	92,358	1.37%	1,754,802	1.49%
17	Amdocs, Inc.	1	66	91,928	1.36%	1,746,632	1.49%
18	County of Santa Clara	1	114	90,467	1.34%	1,380,732	1.18%
19	VCE Company, LLC (b)	1	99	85,650	1.27%	174,703	0.15%
20	Argo Data Resource Corporation	1	62	85,641	1.27%	2,056,863	1.75%
			Total Square Footage	3,040,656	45.06%	$   61,718,732	52.55%

 

(1) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at June 30, 2011 multiplied by 12.

     Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

 

(a)  The lease with Citicorp Credit Services, Inc. is guaranteed by Citigroup, Inc.

(b)  The lease with VCE Company, LLC is guaranteed by EMC Corp.

 

 

 

 

 

 

 

 

 

 

Year		Total Square Feet		% of Square Feet Commercial
2011		203,228		3.0%
2012		297,239		4.4%
2013		412,196		6.1%
2014		423,693		6.3%
2015		789,042		11.7%
2016		981,957		14.6%
2017		514,128		7.6%
2018		410,669		6.1%
2019		619,856		9.2%
2020		163,844		2.4%
2021		559,875		8.3%
2022		401,643		6.0%
2023		83,620		1.2%
Vacant		886,825		13.1%
Total		6,747,815		100.0%

 

 

				Rentable				Annualized		Percentage
	Number of			Square				Rent		of Total Final
Year of	Leases			Footage		Annualized		Per Square		Annualized
Lease	Expiring			Subject to		Rent Under		Foot Under		Rent Under
Expiration	Within the			Expiring		Expiring		Expiring		Expiring
December 31,	Year			Leases		Leases (a)		Leases		Leases
2011	63	(b)		203,228		3,765,335		18.53		3.21%
2012	59			297,239		6,431,684		21.64		5.48%
2013	47			412,196		9,337,983		22.65		7.95%
2014	37			423,693		7,787,372		18.38		6.63%
2015	33			789,042		16,485,948		20.89		14.04%
2016	28			981,957		17,368,526		17.69		14.79%
2017	9			514,128		11,182,037		21.75		9.52%
2018	9			410,669		10,517,162		25.61		8.96%
2019	9			619,856		12,904,470		20.82		10.99%
2020 and thereafter	21			1,208,982		21,656,863		17.91		18.44%
	315			5,860,990		117,437,380		20.04		100.00%
Vacancies as of 6/30/11				886,825
Total Portfolio Square Footage				6,747,815

 

(a) Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at June 30, 2011 multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

 

(b) 38 leases are Month to Month

 

 

 

Recent Acquisitions:

State/Region

Property Type

Square Feet

Date Acquired

Purchase Price

2011

Emperor Boulevard

NC/East

Office

259,531

3/4/11

$              75,800

Legacy Tennyson Center

TX/South

Office

202,600

3/10/11

37,000

One Legacy Circle

TX/South

Office

214,110

3/24/11

52,983

2010

121 South 8th Street

MN/Midwest

Office

474,646

6/29/10

39,405

2009

Stonecroft-Chantilly

VA/East

Office

111,469

6/26/09

29,000

Eden Bluff - Eden Prairie

MN/Midwest

Office

153,028

6/30/09

22,784

Fairview

VA/East

Office

252,613

9/30/09

73,000

2008

Park Ten Phase II

TX/South

Office

156,746

5/15/08

35,079

Lakeside Crossing

MO/Midwest

Office

127,778

12/11/08

20,003

Loudoun Tech Center

VA/East

Office

135,888

12/23/08

18,628

2007

East Baltimore

MD/East

Office

325,298

6/13/07

63,592

Recent Dispositions:

Net Sales

Gain (Loss)

State/Region

Property Type

Square Feet

Date Sold

Proceeds

on Sale

2011

Fairview

VA/East

Office

252,613

1/21/11

$              89,382

$              19,592

Bolman

MD/East

Industrial

98,745

6/24/11

7,408

2,346

2007

Piedmont Center

SC/East

Office

144,029

1/31/07

5,830

(4,849)

Royal Ridge

GA/South

Office

161,366

6/21/07

32,535

6,601

Goldentop Technology Center

CA/West

Office

141,405

6/27/07

36,199

14,741

Lyberty Way

MA/East

Office

104,711

7/16/07

10,861

1,942

Austin N.W. (Canyon Hills)

TX/South

Office

68,533

12/20/07

10,429

257

 

 

 

 

 

 

 

 

		For the three months ended																																								For the year ended
		31-Mar-11				30-Jun-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Mar-09				30-Jun-09				30-Sep-09				31-Dec-09				2010				2009
Net income		$	24,767			$	10,381			$	5,562			$	5,954			$	4,757			$	5,820			$	7,808			$	4,865			$	6,941			$	8,258			$	22,093			$	27,872
(Gain) Loss on sale of assets			(19,592	)			(2,346	)			—				—				—				—				—				—				—				(424	)			—				(424	)
GAAP income from non-consolidated REITs			(1,773	)			(1,166	)			(253	)			(380	)			(404	)			(153	)			(792	)			(443	)			(475	)			(301	)			(1,190	)			(2,011	)
Distributions from non-consolidated REITs			1,767				1,215				1,407				1,324				1,192				1,247				1,615				1,523				1,119				1,371				5,170				5,628
Acquisition costs			269				9				—				129				(4	)			—				—				248				391				4				125				643
Depreciation & amortization			10,812				12,047				9,934				9,675				10,510				10,605				8,707				11,216				9,561				10,167				40,724				39,651
Funds From Operations (FFO)			16,250				20,140				16,650				16,702				16,051				17,519				17,338				17,409				17,537				19,075				66,922				71,359
Plus gains on sales of assets (GOS)			19,592				2,346				—				—				—				—				—				—				—				424				—				424
FFO+GOS (Total Profits)		$	35,842			$	22,486			$	16,650			$	16,702			$	16,051			$	17,519			$	17,338			$	17,409			$	17,537			$	19,499			$	66,922			$	71,783
Per Share Data:
EPS		$	0.30			$	0.13			$	0.07			$	0.07			$	0.06			$	0.07			$	0.11			$	0.07			$	0.10			$	0.10			$	0.28			$	0.38
FFO			0.20				0.25				0.21				0.21				0.20				0.22				0.25				0.25				0.25				0.24				0.84				0.98
GOS			0.24				0.03				—				—				—				—				—				—				—				—				—				—
FFO+GOS			0.44				0.28				0.21				0.21				0.20				0.22				0.25				0.25				0.25				0.24				0.84				0.98
Weighted Average Shares (basic and diluted)			81,437				81,437				79,681				79,681				79,751				80,187				70,481				70,481				71,281				79,681				79,826				73,001

 

 

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” or “Total Profits”) 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.

 

 

 

Franklin Street Properties

Funds Available for Distribution (FAD)

Non-GAAP Measures

 

		For the three months ended:
		31-Mar-11				30-Jun-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Mar-09				30-Jun-09				30-Sep-09				31-Dec-09
Net income		$	24,767			$	10,381			$	5,562			$	5,954			$	4,757			$	5,820			$	7,808			$	4,865			$	6,941			$	8,258
(Gain) Loss on sale of assets			(19,593	)			(2,346	)			—				—				—				—				—				—				—				(424	)
GAAP income from non-consolidated REITs			(1,772	)			(1,166	)			(253	)			(380	)			(404	)			(153	)			(792	)			(443	)			(475	)			(301	)
Distributions from non-consolidated REITs			1,767				1,215				1,407				1,324				1,192				1,247				1,615				1,522				1,119				1,371
Acquisition costs			269				9				—				129				(4	)			—				—				248				391				4
Depreciation & amortization			10,812				12,047				9,934				9,675				10,510				10,605				8,707				11,217				9,561				10,167
Funds From Operations (FFO)			16,250				20,140				16,650				16,702				16,051				17,519				17,338				17,409				17,537				19,075
Plus gains on sales of assets (GOS)			19,592				2,346				—				—				—				—				—				—				—				424
FFO+GOS (Total Profits)		$	35,842			$	22,486			$	16,650			$	16,702			$	16,051			$	17,519			$	17,338			$	17,409			$	17,537			$	19,499
Funds Available for Distribution:
Funds From Operations (FFO)			16,250				20,140				16,650				16,702				16,051				17,519				17,338				17,409				17,537				19,075
Straight-line rent			(2,303	)			(2,873	)			(1,018	)			(740	)			(1,203	)			(1,288	)			(374	)			(69	)			(405	)			(1,030	)
Capital expenditures			(449	)			(876	)			(380	)			(498	)			(671	)			(1,053	)			(466	)			(115	)			(265	)			(619	)
Funds Available for Distribution (FAD)		$	13,498			$	16,391			$	15,252			$	15,464			$	14,177			$	15,178			$	16,498			$	17,225			$	16,867			$	17,426
Per Share Data:
EPS		$	0.30			$	0.13			$	0.07			$	0.07			$	0.06			$	0.07			$	0.11			$	0.07			$	0.10			$	0.10
FFO			0.20				0.25				0.21				0.21				0.20				0.22				0.25				0.25				0.25				0.24
GOS			0.24				0.03				—				—				—				—				—				—				—				0
FFO+GOS			0.44				0.28				0.21				0.21				0.20				0.22				0.25				0.25				0.25				0.24
FAD			0.17				0.20				0.19				0.19				0.18				0.19				0.23				0.24				0.24				0.22
Weighted Average Shares (basic and diluted)			81,437				81,437				79,681				79,681				79,751				80,187				70,481				70,481				71,281				79,681

 

The Company defines FAD as the sum of (1) FFO, (2) less the effect of straight-line rent, (3) less recurring capital expenditures that are generally for maintenance of properties and are not recovered through rental income from tenants, and (4) plus non-cash compensation expenses, if any. FAD should not be considered as an alternative to net income (determined in accordance with GAAP), as an indicator of the Company’s financial performance, nor as an alternative to cash flows from operating activities (determined in accordance with GAAP), nor as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs. Other real estate companies may define this term in a different manner. We believe that in order to facilitate a clear understanding of the results of the Company, FAD should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

 

 

 

		For the three months ended:																								Year Ended				For the three months ended:																Year Ended
		31-Mar-11				30-Jun-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				31-Dec-10				31-Mar-09				30-Jun-09				30-Sep-09				31-Dec-09				31-Dec-09
Net income		$	24,767			$	10,381			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093			$	7,808			$	4,865			$	6,941			$	8,258			$	27,872
Interest expense			2,408				3,578				1,652				1,735				1,892				2,004				7,283				1,577				1,599				1,744				1,650				6,570
Depreciation and amortization			10,812				12,047				9,934				9,675				10,510				10,605				40,724				8,707				11,216				9,561				10,167				39,651
Income taxes			50				68				(68	)			5				(37	)			317				217				(299	)			(75	)			(270	)			65				(579	)
EBITDA			38,037				26,074				17,080				17,369				17,122				18,746				70,317				17,793				17,605				17,976				20,140				73,514
Interest expense		$	2,408			$	3,578			$	1,652			$	1,735			$	1,892			$	2,004			$	7,283			$	1,577			$	1,599			$	1,744			$	1,650			$	6,570
Scheduled principal payments (1)			—				—				—				—				—				150				150				—				—				—				—				—
Interest and scheduled principal payments		$	2,408			$	3,578			$	1,652			$	1,735			$	1,892			$	2,154			$	7,433			$	1,577			$	1,599			$	1,744			$	1,650			$	6,570
Interest coverage ratio			15.80				7.29				10.34				10.01				9.05				9.35				9.65				11.28				11.01				10.31				12.21				11.19
Debt service coverage ratio			15.80				7.29				10.34				10.01				9.05				8.70				9.46				11.28				11.01				10.31				12.21				11.19

 

(1) Scheduled principal payments exclude repayment of our Term Loan on February 22, 2011 in its entirety.

 

EBITDA, a non-GAAP financial measure, is defined as net income, plus interest expense, income tax expense and depreciation and amortization expense. EBITDA is not intended to represent cash flow for the period, is not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and is not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to service or incur debt. Because all companies do not calculate EBITDA the same way, this presentation of EBITDA may not be comparable to similarly titled measures of other companies. The Company believes that net income is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA.

 

 

 

		Three Months Ended:								Three months ended:																2010
		31-Mar-11				30-Jun-11				31-Mar-10				30-Jun-10				30-Sep-10				31-Dec-10				Total
Net Income		$	24,767			$	10,381			$	5,562			$	5,954			$	4,757			$	5,820			$	22,093
Add (deduct):
Investment banking segment net loss (income)			(160	)			(3,274	)			479				(263	)			401				(1,352	)			(735	)
Gain on sale of assets			(19,592	)			(2,346	)			—				—				—				—				—
Management fees (before elimination)			(364	)			(428	)			(484	)			(359	)			(362	)			(535	)			(1,740	)
Depreciation and Amortization			10,781				12,065				9,184				9,205				10,348				10,453				39,190
Amortization of favorable leases			(39	)			(23	)			716				432				96				119				1,363
Selling, general and administrative			1,644				1,602				1,447				1,854				1,400				1,698				6,399
Interest expense			2,408				3,578				1,652				1,736				1,892				2,003				7,283
Interest income			(600	)			(910	)			(338	)			(374	)			(431	)			(491	)			(1,634	)
Equity in earnings of nonconsolidated REITs			(968	)			(1,166	)			(253	)			(380	)			(404	)			(229	)			(1,266	)
Non-property specific income and expenses, net			(1,514	)			(37	)			461				690				421				(268	)			1,304
GAAP Property NOI			16,363				19,442				18,426				18,495				18,118				17,218				72,257
Straight-line rent			(1,641	)			(2,872	)			(1,020	)			(1,339	)			(1,202	)			(1,281	)			(4,842	)
Cash Property NOI		$	14,722			$	16,570			$	17,406			$	17,156			$	16,916			$	15,937			$	67,415

 

GAAP Property NOI is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, plus selling, general and administrative expenses, depreciation and amortization, interest expense, less equity in earnings of nonconsolidated REITs, interest income, management fee income, gains or losses on the sale of assets and excludes non-property specific income and expenses. The Company also presents this on a cash basis (Cash Property NOI), which is GAAP Property NOI after eliminating the effects of straight-line rent. GAAP Property NOI and Cash Property NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.

 

 

 

Investor Relations Contact   (877) 686-9496  InvestorRelations@franklinstreetproperties.com

 

 

 

Franklin Street Properties Corp. ● 401 Edgewater Place ● Wakefield, MA 01880 ● (781) 557-1300

 

www.franklinstreetproperties.com