Exhibit 99.2

 

 

Supplemental Operating and Financial Data Second Quarter 2013

 

 

 

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

 

www.franklinstreetproperties.com

 

 

	Page			Page
Company Overview	3		Tenant Analysis and Leasing Activity
			20 Largest Tenants, Industry Profile	18
Key Financial Data			20 Largest Tenants with Annualized Rent and Remaining Term	19
Financial Highlights	4		Leasing Activity	20
Income Statements	5		Lease Expirations by Square Feet	21
Balance Sheets	6		Lease Expirations with Annualized Rent per Square Foot	22
Cash Flow Statements	7		Capital Expenditures	23
Property Net Operating Income (NOI)	8
			Transaction Activity	24
Reconciliation
FFO & FAD	9		Loan Portfolio of Secured Real Estate	25
EBITDA	10
Property NOI	11		Net Asset Value Components	26
Debt Summary	12		Appendix: Definitions of Non-GAAP Measures
			FFO	27
Capital Analysis	13		EBITDA and FAD	28
			NOI	29
Owned and Managed Portfolio Overview	14-17

 

 

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”, “we”, “our” or the “Company”) (NYSE MKT: FSP) is investing in institutional-quality office properties in the U.S. FSP's strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. FSP’s real estate operations include property acquisitions and dispositions, 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 that previously sponsored the organization of single-purpose entities that own real estate and the private placement of equity in those entities, which we refer to as “Sponsored REITs”.

 

Our Business

As of June 30, 2013, the Company owned and operated a portfolio of real estate consisting of 38 properties, managed 15 Sponsored REITs and held seven promissory notes secured by mortgages on real estate owned by Sponsored REITs. From time-to-time, the Company may acquire real estate, make additional secured loans or acquire one of its Sponsored REITs. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons.

 

Management Team
George J. Carter			Scott H. Carter
President, Chief Executive Officer			Executive Vice President, General
Chairman of the Board			Counsel and Assistant Secretary
Barbara J. Fournier			Jeffrey B. Carter
Executive Vice President,  Chief Operating Officer,			Executive Vice President and
Treasurer, Secretary and Director			Chief Investment Officer
Janet Notopoulos			John G. Demeritt
Executive Vice President and Director			Executive Vice President and
			Chief Financial Officer

 

Inquiries

Inquiries should be directed to: John Demeritt, CFO

877-686-9496 or InvestorRelations@franklinstreetproperties.com

 

 

Snapshot (as of June 30, 2013)
Corporate Headquarters	Wakefield, MA
Fiscal Year-End	31-Dec
Total Properties	38
Total Square Feet	8.5 Million
Trading Symbol	FSP
Exchange	NYSE MKT
Common Shares Outstanding	100,187,405
Quarterly Dividend	$0.19
Dividend Yield	5.8%
Total Market Capitalization	$1.9 Billion
Insider Holdings	10.6%

 

 

 

(in thousands except per share amounts, SF & number of properties)		For the Three Months Ended
		30-Jun-13				31-Mar-13				31-Dec-12				30-Sep-12				30-Jun-12				31-Mar-12
Income Items:
Rental revenue		$	46,322			$	43,147			$	41,532			$	38,251			$	35,570			$	36,303
Total revenue			47,977				44,800				43,420				41,775				38,654				38,953
Adjusted EBITDA*			26,075				24,712				25,491				23,348				22,752				22,789
Equity in earnings in non-consolidated REITs			(196	)			(187	)			972				176				494				391
Net income			4,741				4,401				5,460				(8,998	)			5,433				5,738
FFO*			22,142				20,616				20,515				19,913				19,042				19,571
Per Share Data:
EPS		$	0.05			$	0.05			$	0.07			$	(0.11	)		$	0.07			$	0.07
FFO*		$	0.24			$	0.25			$	0.25			$	0.24			$	0.23			$	0.24
Weighted Average Shares (diluted)			91,847				82,937				82,937				82,937				82,937				82,937
Closing share price		$	13.20			$	14.62			$	12.31			$	11.07			$	10.58			$	10.60
Dividend		$	0.19			$	0.19			$	0.19			$	0.19			$	0.19			$	0.19
Payout Ratio:			79	%			76	%			77	%			79	%			83	%			81	%
Balance Sheet Items:
Real estate, net		$	1,288,025			$	1,136,204			$	1,142,628			$	1,015,984			$	982,685			$	987,003
Other assets, net			422,026				376,498				384,551				379,950				447,678				451,525
Total assets, net			1,710,051				1,512,702				1,527,179				1,395,934				1,430,363				1,438,528
Total liabilities, net			629,007				658,869				662,430				521,338				529,340				527,181
Shareholders' equity			1,081,044				853,833				864,749				874,596				901,023				911,347
Market Capitalization and Debt:
Total Market Capitalization (a)		$	1,903,974			$	1,834,295			$	1,637,709			$	1,400,117			$	1,371,478			$	1,373,136
Total debt outstanding			581,500				621,750				616,750				482,000				494,000				494,000
Debt to Total Market Capitalization			30.5	%			33.9	%			37.7	%			34.4	%			36.0	%			36.0	%
Debt to Adjusted EBITDA			5.6				6.3				6.0				5.2				5.4				5.4
Owned Portfolio Leasing Statistics:
Owned portfolio assets			38				37				37				37				36				36
Portfolio total SF			8,529,752				7,856,859				7,854,679				7,439,195				7,052,592				7,052,068
Portfolio % leased			94.4	%			94.4	%			94.0	%			89.9	%			90.0	%			89.0	%

 

(a)

Total Market Capitalization is the closing share price multilplied by the number of shares outstanding plus total debt outstanding on that date.

*

See pages 9 & 10 for reconciliations of Net Income to FFO and Adjusted EBITDA, respectively, and the Appendix for Defintions of these Non-GAAP Measures beginning on page 27.

 

 

										For the Six																				For the
		For the								Months																				Year
		Three Months Ended								Ended				For the Three Months Ended																Ended
		31-Mar-13				30-Jun-13				30-Jun-13				31-Mar-12				30-Jun-12				30-Sep-12				31-Dec-12				31-Dec-12
Revenue:
Rental		$	43,147			$	46,322			$	89,469			$	36,303			$	35,570			$	38,251			$	41,532			$	151,656
Related party revenue:
Management fees and interest income from loans			1,622				1,643				3,265				2,616				3,045				3,485				1,801				10,947
Other			31				12				43				34				39				39				87				199
Total revenue			44,800				47,977				92,777				38,953				38,654				41,775				43,420				162,802
Expenses:
Real estate operating expenses			10,770				11,116				21,886				8,697				8,604				9,639				10,501				37,441
Real estate taxes and insurance			6,597				7,311				13,908				5,696				5,493				5,764				5,960				22,913
Depreciation and amortization			15,987				17,124				33,111				13,071				13,003				13,572				15,226				54,872
Selling, general and administrative			2,532				3,204				5,736				2,077				2,236				3,141				2,462				9,916
Interest			4,208				4,174				8,382				3,677				4,037				4,187				4,167				16,068
Total expenses			40,094				42,929				83,023				33,218				33,373				36,303				38,316				141,210
Income before interest income, equity in earnings ofnon-consolidated REITs and taxes			4,706				5,048				9,754				5,735				5,281				5,472				5,104				21,592
Interest income			1				4				5				8				4				5				34				51
Equity in earnings of non-consolidated REITs			(187	)			(196	)			(383	)			391				494				176				972				2,033
Income before taxes on income			4,520				4,856				9,376				6,134				5,779				5,653				6,110				23,676
Income tax expense			119				115				234				79				77				80				99				335
Income from continuing operations			4,401				4,741				9,142				6,055				5,702				5,573				6,011				23,341
Income from discontinued operations			—				—				—				(317	)			(268	)			(271	)			(26	)			(882	)
Gain (loss) on sale, less applicable income tax			—				—				—				—				—				(14,300	)			(526	)			(14,826	)
Net income		$	4,401			$	4,741			$	9,142			$	5,738			$	5,434			$	(8,998	)		$	5,459			$	7,633
Weighted average number of shares outstanding, basic and diluted			82,937				91,847				87,417				82,937				82,937				82,937				82,937				82,937
Earnings per share, basic and diluted, attributable to:
Continuing operations		$	0.05			$	0.05			$	0.10			$	0.07			$	0.07			$	0.07			$	0.07			$	0.28
Discontinued operations			—				—				—				—				—				—				—				(0.01	)
Gain (loss) on sale, less applicable income tax			—				—				—				—				—				(0.18	)			—				(0.18	)
Net income per share, basic and diluted		$	0.05			$	0.05			$	0.10			$	0.07			$	0.07			$	(0.11	)		$	0.07			$	0.09

 

 

		March 31,				June 30,				March 31,				June 30,				September 30,				December 31,
		2013				2013				2012				2012				2012				2012
Assets:
Real estate assets:
Land		$	144,336			$	160,670			$	132,393			$	132,393			$	135,845			$	144,336
Buildings and improvements			1,180,959				1,325,919				1,009,706				1,013,122				1,051,111				1,178,144
Fixtures and equipment			904				960				860				871				904				904
			1,326,199				1,487,549				1,142,959				1,146,386				1,187,860				1,323,384
Less accumulated depreciation			189,995				199,524				155,956				163,701				171,876				180,756
Real estate assets, net			1,136,204				1,288,025				987,003				982,685				1,015,984				1,142,628
Acquired real estate leases, net			105,882				132,662				87,073				82,769				92,717				111,982
Investment in non-consolidated REITs			81,746				81,523				87,061				86,658				85,927				81,960
Assets held for sale			—				—				15,215				15,032				685				—
Cash and cash equivalents			17,282				24,962				29,283				22,620				23,962				21,267
Restricted cash			583				602				511				533				546				575
Tenant rent receivables, net			2,357				2,331				1,090				1,403				1,182				1,749
Straight-line rent receivable, net			36,287				37,952				31,861				33,048				34,190				35,441
Prepaid expenses			2,438				1,760				1,164				2,605				2,336				1,106
Related party mortgage loan receivable			96,896				97,846				172,286				177,536				108,236				93,896
Other assets			8,107				17,511				4,006				3,640				8,467				13,199
Deferred leasing commissions, net			24,920				24,877				21,975				21,834				21,702				23,376
Total assets		$	1,512,702			$	1,710,051			$	1,438,528			$	1,430,363			$	1,395,934			$	1,527,179
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable		$	221,750			$	181,500			$	494,000			$	494,000			$	82,000			$	216,750
Term loan payable			400,000				400,000				—				—				400,000				400,000
Accounts payable and accrued expenses			25,493				29,971				23,311				25,408				26,462				31,122
Accrued compensation			540				1,677				446				944				2,194				2,540
Tenant security deposits			2,474				3,074				2,181				2,113				2,281				2,489
Other liabilities: derivative termination value			778				—				—				—				1,671				1,219
Acquired unfavorable real estate leases, net			7,834				12,785				7,243				6,875				6,730				8,310
Total liabilities			658,869				629,007				527,181				529,340				521,338				662,430
Commitments and contingencies
Stockholders’ Equity:
Preferred stock			—				—				—				—				—				—
Common stock			8				10				8				8				8				8
Additional paid-in capital			1,042,876				1,273,585				1,042,876				1,042,876				1,042,876				1,042,876
Accumulated other comprehensive income (loss)			(778	)			6,739				—				—				(1,671	)			(1,219	)
Accumulated distributions in excess of accumulated earnings			(188,273	)			(199,290	)			(131,537	)			(141,861	)			(166,617	)			(176,916	)
Total stockholders’ equity			853,833				1,081,044				911,347				901,023				874,596				864,749
Total liabilities and stockholders’ equity		$	1,512,702			$	1,710,051			$	1,438,528			$	1,430,363			$	1,395,934			$	1,527,179

 

 

 

		Six Months ended June 30,									Twelve Months ended December 31
		2013				2012					2012				2011
Cash flows from operating activities:
Net income		$	9,142			$	11,172				$	7,633			$	43,524
Adjustments to reconcile net income to net cash provided by  operating activities:
Depreciation and amortization expense			33,968				27,495					57,500				50,261
Amortization of above market lease			(82	)			20					71				(47	)
Gain (loss) on sale, less applicable income tax			—				(885	)				14,826				(21,939	)
Equity in earnings (losses) from non-consolidated REITs			383				993					(2,033	)			(3,086	)
Distributions from non-consolidated REITs			—				—					705				3,474
Increase in bad debt reserve			(1,190	)			65					65				(365	)
Changes in operating assets and liabilities:
Restricted cash			(27	)			(40	)				(82	)			(73	)
Tenant rent receivables			608				(8	)				(354	)			827
Straight-line rents			(1,842	)			(2,571	)				(4,464	)			(9,878	)
Lease acquisition costs			(669	)			(2,026	)				(2,520	)			—
Prepaid expenses and other assets			(870	)			(1,512	)				(328	)			1,611
Accounts payable and accrued expenses			(1,244	)			(1,395	)				3,717				4,213
Accrued compensation			(863	)			(1,278	)				318				419
Tenant security deposits			585				105					481				78
Payment of deferred leasing commissions			(3,711	)			(1,513	)				(5,179	)			(8,058	)
Net cash provided by operating activities			34,188				28,622					70,356				60,961
Cash flows from investing activities:
Purchase of real estate assets, office computers and furniture, capitalized merger costs and acquired real estate leases			(192,294	)			(7,112	)				(221,170	)			(236,250	)
Investment in non-consolidated REITs			4,752				(1	)				(1	)			(10	)
Distributions in excess of earnings from non-consolidated REITs			54				834					2,105				1,582
Investment in related party mortgage loan receivable			(3,950	)			(37,020	)				(74,580	)			(82,832	)
Repayment of related party mortgage loan receivable			—									121,200				—
Changes in deposits on real estate assets			(3,000	)			—					—				200
Investment in assets held for syndication, net			—				—					—				2,230
Proceeds received on sales of real estate assets			—				—					157				96,790
Net cash used in investing activities			(194,438	)			(43,299	)				(172,289	)			(218,290	)
Cash flows from financing activities:
Distributions to stockholders			(31,516	)			(31,516	)				(63,032	)			(62,177	)
Proceeds (costs) from equity offering, net			230,711				—					—				17,295
Borrowings under bank note payable			—				45,000					294,750				449,000
Borrowings (repayments) under Revolver			(35,250	)			—					(527,000	)			(209,968	)
Borrowing (repayment) of term loan payable, net			—				—					400,000				(74,850	)
Deferred Financing Costs			—				—					(5,331	)			(5,388	)
Swap termination payment			—				—					—				(983	)
Net cash provided by (used in) financing activities			163,945				13,484					99,387				112,929
Net decreases in cash and cash equivalents			3,695				(1,193	)				(2,546	)			(44,400	)
Cash and cash equivalents, beginning of period			21,267				23,813					23,813				68,213
Cash and cash equivalents, end of period		$	24,962			$	22,620				$	21,267			$	23,813

 

 

(in thousands)						Net Operating Income (NOI)*
		Rentable												Six												Six
		Square												Months												Months
		Feet				Three Months Ended								Ended				Three Months Ended								Ended				Inc				%
Region		or RSF				31-Mar-13				30-Jun-13				30-Jun-13				31-Mar-12				30-Jun-12				30-Jun-12				(Dec)				Change
East			1,441			$	4,756			$	5,440			$	10,196			$	5,113			$	4,723			$	9,836			$	360				3.7	%
MidWest			1,682				4,839				5,008				9,847				5,122				4,980				10,102				(255	)			-2.5	%
South			2,630				9,559				9,645				19,204				9,212				9,015				18,227				977				5.4	%
West			1,088				2,350				2,118				4,468				2,278				2,443				4,721				(253	)			-5.4	%
Same Store			6,841				21,504				22,211				43,715				21,725				21,161				42,886				829				1.9	%
Acquisitions			1,689				3,919				5,107				9,026				—				—				—				9,026				21.1	%
Property NOI from the continuing portfolio			8,530				25,423				27,318				52,741				21,725				21,161				42,886				9,855				23.0	%
Dispositions and asset held for sale							—				—				—				(132	)			(47	)			(179	)			179				0.5	%
Property NOI						$	25,423			$	27,318			$	52,741			$	21,593			$	21,114			$	42,707			$	10,034				23.5	%
Same Store						$	21,504			$	22,211			$	43,715			$	21,725			$	21,161			$	42,886			$	829				1.9	%
Less Nonrecurring
Items in NOI (a)							63				556				619				514				21				535				84				-0.1	%
Comparative
Same Store						$	21,441			$	21,655			$	43,096			$	21,211			$	21,140			$	42,351			$	745				1.8	%

 

 

(a)

Nonrecurring Items in NOI include proceeds from bankruptcies, lease termination fees or other significant nonrecurring income or expenses, which may affect comparability.

*

See page 11 for a reconciliation of Net Income to Property NOI and the Appendix for Definitions of Non-GAAP Measures beginning on page 27. Property NOI Excludes NOI from investments in and interest income from secured loans to non-consolidated REITs.

 

 

										For the Six																				For the
		For the Three Months Ended								Months Ended								For the Three Months Ended:												Year Ended
		31-Mar-13				30-Jun-13				30-Jun-13				31-Mar-12				30-Jun-12				30-Sep-12				31-Dec-12				31-Dec-12
Net income		$	4,401			$	4,741			$	9,142			$	5,738			$	5,434			$	(8,998	)		$	5,459			$	7,633
Gain (loss) on sale, less applicable income tax			—								—				—				—				14,300				526				14,826
GAAP income from non-consolidated REITs			187				196				383				(391	)			(494	)			(176	)			(972	)			(2,033	)
Distributions from non-consolidated REITs			27				27				54				929				898				907				76				2,810
Depreciation & amortization			15,984				17,045				33,029				13,295				13,203				13,779				15,241				55,518
NAREIT FFO*			20,599				22,009				42,608				19,571				19,041				19,812				20,330				78,754
Acquisition costs			17				133				150				—				—				101				186				287
Funds From Operations (FFO)*		$	20,616			$	22,142			$	42,758			$	19,571			$	19,041			$	19,913			$	20,516			$	79,041
Funds Available for Distribution:
Funds From Operations (FFO)*			20,616				22,142				42,758				19,571				19,041				19,913				20,516				79,041
Straight-line rent			(657	)			(1,186	)			(1,843	)			(1,517	)			(1,054	)			(927	)			(965	)			(4,463	)
Capital expenditures			(1,118	)			(1,622	)			(2,740	)			(746	)			(1,003	)			(711	)			(1,252	)			(3,712	)
Funds Available for Distribution (FAD)*		$	18,841			$	19,334			$	38,175			$	17,308			$	16,984			$	18,275			$	18,299			$	70,866
Per Share Data:
EPS		$	0.05			$	0.05			$	0.10			$	0.07			$	0.07			$	(0.11	)		$	0.07			$	0.09
FFO*			0.25				0.24				0.49				0.24				0.23				0.24				0.25				0.95
FAD*			0.23				0.21				0.44				0.21				0.20				0.22				0.22				0.85
Weighted Average Shares (basic and diluted)			82,937				91,847				87,417				82,937				82,937				82,937				82,937				82,937

 

 

* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 27.

 

 

										For the
										Six																					Year
		For the Three								Months																					Ended
		Months Ended								Ended					For the three months ended:																31-Dec-12
		31-Mar-13				30-Jun-13				30-Jun-13					31-Mar-12				30-Jun-12				30-Sep-12				31-Dec-12
Net income		$	4,401			$	4,741			$	9,142				$	5,738			$	5,434			$	(8,998	)		$	5,459			$	7,633
Interest expense			4,208				4,174				8,382					3,677				4,037				4,187				4,167				16,068
Depreciation and amortization			15,984				17,045				33,029					13,295				13,203				13,779				15,241				55,518
Income taxes			119				115				234					79				77				80				99				335
EBITDA			24,712				26,075				50,787					22,789				22,751				9,048				24,966				79,554
Excluding (gain) loss on sale,less applicable income tax			—				—				—					—				—				14,300				526				14,826
Adjusted EBITDA		$	24,712			$	26,075			$	50,787				$	22,789			$	22,751			$	23,348			$	25,492			$	94,380
Interest expense		$	4,208			$	4,174			$	8,382				$	3,677			$	4,037			$	4,187			$	4,167			$	16,068
Scheduled principal payments			—				—				—					—				—				—				—				—
Interest and scheduled principal payments		$	4,208			$	4,174			$	8,382				$	3,677			$	4,037			$	4,187			$	4,167			$	16,068
Interest coverage ratio			5.87				6.25				6.06					6.20				5.64				5.58				6.12				5.87
Debt service coverage ratio			5.87				6.25				6.06					6.20				5.64				5.58				6.12				5.87
Debt		$	621,750			$	581,500			$	581,500				$	494,000			$	494,000			$	482,000			$	616,750
Adjusted EBITDA			24,712				26,075				50,787					22,789				22,751				23,348				25,492
Annualized			98,848				104,300				101,574					91,156				91,004				93,392				101,968
Debt-to-EBITDA			6.3				5.6				5.7					5.4				5.4				5.2				6.0

 

* See the Appendix for Definitions of these Non-GAAP Measures beginning on page 27.

 

 

Reconciliation to Net income										Six Months												Six Months
		Three Months Ended								Ended				Three Months Ended								Ended
		31-Mar-13				30-Jun-13				30-Jun-13				31-Mar-12				30-Jun-12				30-Jun-12
Net Income		$	4,401			$	4,741			$	9,142			$	5,738			$	5,434			$	11,172
Add (deduct):
Discontinued operations			—				—				—				317				268				585
Management fee income			(559	)			(553	)			(1,112	)			(488	)			(479	)			(967	)
Depreciation and amortization			15,987				17,124				33,111				13,071				13,004				26,075
Amortization of above/below market leases			(2	)			(80	)			(82	)			40				(20	)			20
Selling, general and administrative			2,532				3,204				5,736				2,077				2,236				4,313
Interest expense			4,208				4,174				8,382				3,677				4,037				7,714
Interest income			(1,353	)			(1,382	)			(2,735	)			(2,340	)			(2,774	)			(5,114	)
Equity in earnings of											—												—
nonconsolidated REITs			187				196				383				(391	)			(494	)			(885	)
Non-property specific items, net			22				(106	)			(84	)			24				(51	)			(27	)
Property NOI from the continuing portfolio		$	25,423			$	27,318			$	52,741			$	21,725			$	21,161			$	42,886
Dispositions and asset held for sale			—				—				—				(132	)			(47	)			(179	)
Property NOI		$	25,423			$	27,318			$	52,741			$	21,593			$	21,114			$	42,707

 

* See the Appendix for Definition of Non-GAAP Measures beginning on page 27.

 

 

(a)

(dollars in thousands)

Maximum

Amount

Interest

Interest

Maturity

Amount

Drawn at

Rate

Rate at

Facility

2012 Credit Facility

Date

of Loan

30-Jun-13

Components

30-Jun-13

Fee

2012 Revolver

27-Sep-16

$

500,000

$

181,500

L+1.45%

1.65%

0.3%

2012 Term Loan

27-Sep-17

400,000

400,000

0.75% + 1.45%

2.20%

0.3%

$

900,000

$

581,500

2.03%

(a) Interest rate excludes amortization of deferred financing costs and facility fees, see notes below

 

On September 27, 2012, we entered into a new bank facility we call the 2012 Credit Facility for a total of $900 million, which is comprised of a line of credit that we can borrow up to $500 million on, which we call the 2012 Revolver and a term loan for $400 million that we call the 2012 Term Loan.

•

The total amount available under the 2012 Credit Facility is $900 million and is subject to a facility fee on the entire amount based on a leverage calculation in the related loan agreement. The facility fee can range between 20 bps and 40 bps depending on our leverage at quarter end. As of June 30, 2013 the facility fee was 30 bps based on our leverage ratio, or approximately $2.7 million per year.

•

The interest rate on the 2012 Revolver as of June 30, 2013 was 145 bps over the 30-Day LIBOR based on our leverage calculation. The interest rate spread can range between 135 bps and 190 bps over 30-Day LIBOR depending on our leverage at quarter end. As of June 30, 2013 the annual rate for the borrowing outstanding was 1.65%.

•

The LIBOR interest rate on the 2012 Term Loan was fixed with a 5-year interest swap at 75 bps and is priced at 145 bps over that rate based on our leverage ratio. The interest rate spread can range between 135 bps and 190 bps over 30-Day LIBOR depending on our leverage at quarter end. As of June 30, 2013 the annual rate for the 2012 Term Loan was 2.20%.

•

We incurred financing costs to close the 2012 Credit Facility and the 2011 Revolver that preceded it. These costs are deferred and amortized into interest expense during the term of the loans. The annual run rate for amortization to interest expense from deferred financing costs is approximately $1.7 million.

•

The 2012 Revolver can be extended for 1 year at the Company’s option upon payment of fees and includes an accordion feature that allows for up to $250 million of additional borrowing capacity subject to receipt of lender commitments and satisfaction of certain customary conditions.

 

 

		31-Mar-13				30-Jun-13					31-Mar-12				30-Jun-12				30-Sep-12				31-Dec-12
Market Data:
Shares Outstanding			82,937				100,187					82,937				82,937				82,937				82,937
Closing market price per share		$	14.62			$	13.20				$	10.60			$	10.58			$	11.07			$	12.31
Market capitalization		$	1,212,545			$	1,322,474				$	879,136			$	877,478			$	918,117			$	1,020,959
Total Debt			621,750				581,500					494,000				494,000				482,000				616,750
Total Market Capitalization		$	1,834,295			$	1,903,974				$	1,373,136			$	1,371,478			$	1,400,117			$	1,637,709
Dividend Data:
Total dividends paid		$	15,758			$	15,758				$	15,758			$	15,758			$	15,758			$	15,758
Common dividend per share		$	0.19			$	0.19				$	0.19			$	0.19			$	0.19			$	0.19
Quarterly dividend as a % of FFO*			76.0	%			79.2	%				80.5	%			82.6	%			79.2	%			76.8	%
Liquidity:
Cash and cash equivalents		$	17,282			$	24,962				$	29,283			$	22,620			$	23,962			$	21,267
Revolving credit facilities:
Gross potential available under current credit facilities			900,000				900,000					600,000				600,000				900,000				900,000
Less:
Outstanding balance			(621,750	)			(581,500	)				(494,000	)			(494,000	)			(482,000	)			(616,750	)
Total Liquidity		$	295,532			$	343,462				$	135,283			$	128,620			$	441,962			$	304,517

 

*See page 9 for a reconciliation of Net Income to FFO and the Appendix for Definitions of Non-GAAP Measures beginning on page 27.

 

 

	For the Three Months Ended
	30-Jun-13	31-Mar-13	31-Dec-12	30-Sep-12	30-Jun-12	31-Mar-12
Owned portfolio of commercial real estate:
Number of properties (a)	38	37	37	37	36	36
Square feet	8,529,752	7,856,859	7,854,679	7,439,195	7,052,592	7,052,068
Leased percentage	94.4%	94.4%	94.0%	89.9%	90.0%	89.0%
Investments in non-consolidated
commercial real estate:
Number of properties (a)	2	2	2	3	3	3
Square feet	1,395,500	1,392,316	1,392,316	2,016,260	2,003,968	2,004,953
Leased percentage	67.6%	66.1%	65.0%	68.0%	89.5%	90.0%
Single Asset REITs (SARs) managed:
Number of properties	13	13	13	13	13	13
Square feet	3,323,566	3,323,566	3,323,566	3,322,589	3,322,589	3,322,570
Leased percentage	83.9%	87.8%	87.0%	84.8%	84.8%	84.0%
Total owned (a) , investments
and managed properties:
Number of properties	53	52	52	53	52	52
Square feet	13,248,818	12,572,741	12,570,561	12,778,044	12,379,149	12,379,591
Leased percentage	88.9%	89.5%	89.0%	85.1%	88.5%	88.0%
(a) Includes assets sold in prior periods

 

 

 

 

				Percent	Wtd Ave (a)	GAAP (b)
MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent
East Region
Baltimore
East Baltimore	Baltimore	MD	325,445	76.8%	70.0%	$        24.85
Washington, D.C.
Meadow Point	Chantilly	VA	138,537	92.6%	92.6%	$        26.85
Stonecroft	Chantilly	VA	111,469	100.0%	100.0%	$        38.02
Loudoun Tech Center	Dulles	VA	135,888	100.0%	100.0%	$        15.86
Richmond
Innsbrook	Glen Allen	VA	298,456	99.0%	98.8%	$        17.42
Charlotte
Park Seneca	Charlotte	NC	109,674	79.3%	77.8%	$        15.70
Forest Park	Charlotte	NC	62,212	100.0%	100.0%	$        13.74
Raleigh-Durham
Emperor Boulevard	Durham	NC	259,531	100.0%	100.0%	$        35.95
East Region Total			1,441,212	92.3%	90.6%	$        24.64
Midwest Region
Chicago
Northwest Point	Elk Grove Village	IL	176,848	100.0%	100.0%	$        19.20
909 Davis Street	Evanston	IL	195,245	97.9%	97.9%	$        33.73
Indianapolis
River Crossing	Indianapolis	IN	205,059	98.2%	92.2%	$        22.09
St. Louis
Timberlake	Chesterfield	MO	232,766	98.3%	97.2%	$        20.66
Timberlake East	Chesterfield	MO	116,197	94.6%	96.2%	$        22.70
Lakeside Crossing	Maryland Heights	MO	127,778	100.0%	100.0%	$        24.52
Minneapolis
Eden Bluff	Eden Prairie	MN	153,028	100.0%	100.0%	$        27.71
121 South 8th Street	Minneapolis	MN	474,403	90.7%	90.3%	$        14.77
Midwest Region Total			1,681,324	96.3%	95.4%	$        21.78

 

(a) Weighted Occupied Percentage for the six months ended June 30, 2013

(b) Weighted Average GAAP Rent per Occupied Square Foot

 

 

				Percent	Wtd Ave (a)	GAAP (b)
MSA / Property Name	City	State	Square Feet	Leased	Occupied	Rent
South Region
Dallas-Fort Worth
Willow Bend Office Center	Plano	TX	117,217	92.3%	85.4%	$             20.42
Legacy Tennyson Center	Plano	TX	202,600	100.0%	100.0%	$             19.47
One Legacy Circle	Plano	TX	214,110	100.0%	100.0%	$             30.69
Addison Circle	Addison	TX	293,787	95.4%	96.9%	$             23.97
Collins Crossing	Richardson	TX	298,766	99.5%	90.0%	$             23.52
East Renner Road	Richardson	TX	122,300	100.0%	100.0%	$               9.99
Liberty Plaza	Addison	TX	218,934	84.6%	81.7%	$             19.85
Houston
Park Ten	Houston	TX	157,460	100.0%	98.3%	$             28.23
Eldridge Green	Houston	TX	248,399	100.0%	100.0%	$             29.51
Park Ten Phase II	Houston	TX	156,746	100.0%	100.0%	$             31.19
Westchase I & II	Houston	TX	629,025	96.6%	95.8%	$             30.03
Miami-Ft. Lauderdale-West Palm Beach
Blue Lagoon Drive	Miami	FL	212,619	100.0%	100.0%	$             23.42
Atlanta
One Overton Place	Atlanta	GA	387,267	98.3%	89.6%	$             22.40
One Ravinia	Atlanta	GA	386,603	91.0%	86.1%	$             22.09
South Region Total			3,645,833	96.7%	94.0%	$             24.89
West Region
Seattle
Federal Way	Federal Way	WA	117,010	48.4%	47.2%	$        18.58
San Francisco-San Jose-Oakland
Hillview Center	Milpitas	CA	36,288	100.0%	100.0%	$        14.89
Montague Business Center	San Jose	CA	145,951	100.0%	100.0%	$        15.41
Denver
380 Interlocken	Broomfield	CO	240,184	87.6%	86.5%	$        29.01
1999 Broadway	Denver	CO	673,793	95.9%	95.6%	$        30.00
Greenwood Plaza	Englewood	CO	196,236	100.0%	38.4%	$        21.58
390 Interlocken	Broomfield	CO	241,516	79.8%	82.1%	$        26.93
Colorado Springs
Centennial Technology Center	Colorado Springs	CO	110,405	85.4%	85.4%	$        15.54
West Region Total			1,761,383	89.6%	82.7%	$        25.80
Total Owned			8,529,752	94.4%	91.4%	$        24.38

 

(a) Weighted Occupied Percentage for the six months ended June 30, 2013

(b) Weighted Average GAAP Rent per Occupied Square Foot

 

 

MSA / Property Name	City	State	Square Feet			MSA / Property Name	City	State	Square Feet
Southeast Region						Midwest Region
Columbia						Chicago
1441 Main Street	Columbia	SC	264,857			East Wacker (a)	Chicago	IL	860,429
Atlanta						Indianapolis
Satellite Place	Duluth	GA	134,785			Monument Circle	Indianapolis	IN	213,609
Southeast Region Total			399,642			St. Louis
						Lakeside Crossing II	Maryland Heights	MO	116,000
Southwest Region
						Minneapolis
Dallas-Fort Worth						505 Waterford	Plymouth	MN	256,367
5601 Executive Drive	Irving	TX	152,121			50 South Tenth Street	Minneapolis	MN	498,768
Galleria North	Dallas	TX	379,518
						Kansas City
Houston						Grand Boulevard (b)	Kansas City	MO	535,071
Energy Tower I	Houston	TX	325,797
						Cincinnati
Denver						Centre Pointe V	West Chester	OH	135,936
Highland Place	Centennial	CO	139,142			Union Centre	West Chester	OH	409,798
385 Interlocken	Broomfield	CO	296,868
						Midwest Region Total			3,025,978
Southwest Region Total			1,293,446
						Total Managed			4,719,066
						Total Owned & Managed			13,248,818

 

(a)

FSP has a Preferred Share Interest of 43.7% in the entity that owns this property.

(b)

FSP has a Preferred Share Interest of 27.0% in the entity that owns this property.

 

 

 

 

 

 

										Remaining				Aggregate				% of Aggregate				Annualized				% of Aggregate
				Tenant		Number of				Lease Term				Leased				Leased				Rent				Leased
				Name		Leases				in Months				Square Feet				Square Feet				(in 000's)				Annualized Rent
	1			TCF National Bank			2				30				263,111				3.1	%		$	2,883,485				1.6	%
	2			Quintiles Transnational Corp.			1				69				259,531				3.0	%			8,462,648				4.6	%
	3			CITGO Petroleum Corporation			1				104				248,399				2.9	%			7,356,701				4.0	%
	4			U.S. Government			6				14, 15, 18, 26, 59, 87				229,752				2.7	%			7,091,439				3.9	%
	5			Burger King Corporation			1				63				212,619				2.5	%			4,756,424				2.6	%
	6			Denbury Onshore, LLC			2				73				202,600				2.4	%			3,510,042				1.9	%
	7			RGA Reinsurance Company			2				18				197,354				2.3	%			4,200,823				2.3	%
	8			SunTrust Bank			2				40, 99				182,888				2.1	%			3,638,692				2.0	%
	9			Citicorp Credit Services, Inc			1				42				176,848				2.1	%			3,511,335				1.9	%
	10			C.H. Robinson Worldwide, Inc			1				96				153,028				1.8	%			4,111,367				2.2	%
	11			T-Mobile South, LLC dba T-Mobile			1				68				151,792				1.8	%			3,469,391				1.9	%
	12			Houghton Mifflin Harcourt Publishing Company			1				45				150,050				1.8	%			5,815,593				3.2	%
	13			Petrobras America, Inc.			1				77				144,813				1.7	%			4,855,533				2.7	%
	14			Murphy Exploration & Production Company			1				46				144,677				1.7	%			4,243,797				2.3	%
	15			Argo Data Resource Corporation			1				122				138,540				1.6	%			2,661,560				1.5	%
	16			Giesecke & Devrient America, Inc.			1				20				135,888				1.6	%			1,897,346				1.0	%
	17			Monsanto Company			1				19				127,778				1.5	%			3,297,783				1.8	%
	18			Federal National Mortgage Association			1				39				123,144				1.4	%			2,755,692				1.5	%
	19			AT&T Services, Inc.			1				60				122,300				1.4	%			977,989				0.5	%
	20			Vail Holdings, Inc.			1				69, 117				122,232				1.4	%			2,843,976				1.6	%
											Total				3,487,344				40.8	%		$	82,341,615				45.0	%

 

 

		Three	Three	Six
		Months	Months	Months		Year
		Ended	Ended	Ended		Ended
Leaasing Activity		31-Mar-13	30-Jun-13	30-Jun-13		31-Dec-12
(in Square Feet - SF)
New leasing		148,378	28,055	176,433		315,740
Renewals		201,011	91,031	292,042		700,838
		349,389	119,086	468,475		1,016,578
Other information per SF
(Activity on a year-to-date basis)
GAAP Rents on leasing		$               24.66		$          24.40		$       22.41
Weighted average lease term		8.25 Years		7.13 Years		5.1 Years
Average free rent		3 Months		3 Months		3 Months
Tenant Improvements		$               19.97		$          17.11		$       12.26
Leasing Costs		$               10.17		$            8.84		$         5.40

 

 

Year			Total Square Feet		% of Square Feet Commercial
2013			102,195		1.2%
2014			382,485		4.5%
2015			1,165,200		13.7%
2016			990,188		11.6%
2017			967,183		11.3%
2018			947,518		11.1%
2019			1,477,734		17.3%
2020			205,136		2.4%
2021			810,068		9.5%
2022			500,614		5.9%
2023			298,997		3.5%
2024			120,979		1.4%
2025			84,874		1.0%
Vacant			476,581		5.6%
Total			8,529,752		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
2013	69	(b)	102,195		2,160,633		21.14		1.18%
2014	64		382,485		8,937,797		23.37		4.88%
2015	78		1,165,200		25,520,060		21.90		13.94%
2016	68		990,188		20,980,295		21.19		11.46%
2017	58		967,183		25,298,117		26.16		13.82%
2018	42		947,518		22,885,707		24.15		12.50%
2019	27		1,477,734		36,000,063		24.36		19.67%
2020	12		205,136		5,035,786		24.55		2.75%
2021	13		810,068		16,521,471		20.40		9.03%
2022 and thereafter	67		1,005,464		19,702,305		19.60		10.77%
	498		8,053,171		183,042,233		22.73		100.00%
Vacancies as of 6/30/13			476,581
Total Portfolio Square Footage			8,529,752

 

(a)

Annualized rent represents the monthly rent, including tenant reimbursements, for each lease in effect at June 30, 2013 mulitplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.

 

(b)

39 leases are Month to Month

 

 

 

																		Year
		For the Three Months Ended																Ended
		31-Mar-13				30-Jun-13				30-Sep-13				31-Dec-13				31-Dec-13
Tenant improvements		$	1,729			$	5,755			$	—			$	—			$	7,484
Deferred leasing costs			2,813				1,087				—				—				3,900
Building improvements			1,118				1,622				—				—				2,740
Total		$	5,660			$	8,464			$	—			$	—			$	14,124

 

																		Year
		For the Three Months Ended																Ended
		31-Mar-12				30-Jun-12				30-Sep-12				31-Dec-12				31-Dec-12
Tenant improvements		$	3,014			$	2,705			$	2,854			$	4,464			$	13,037
Deferred leasing costs			2,196				1,343				1,104				2,784				7,427
Building improvements			746				1,003				711				1,252				3,712
Total		$	5,956			$	5,051			$	4,669			$	8,500			$	24,176

 

 

Recent Acquisitions:

Square

Date

Purchase Price

City

State

Feet

Acquired

(in thousands)

2013

1999 Broadway

Denver

CO

673,793

5/22/13

$

183,000

2012

One Ravinia

Atlanta

GA

386,603

7/31/12

$

52,750

Westchase

Houston

TX

629,025

11/1/12

154,750

2011

Emperor Boulevard

Durham

NC

259,531

3/4/11

75,800

Legacy Tennyson Center

Plano

TX

202,600

3/10/11

37,000

One Legacy Circle

Plano

TX

214,110

3/24/11

52,983

909 Davis

Evanston

IL

195,245

9/30/11

37,062

East Renner Road

Richardson

TX

122,300

10/6/11

11,282

Recent Dispositions:

Square

Net Sales

Gain (Loss)

City

State

Feet

Date Sold

Proceeds

on Sale

(in thousands)

2012

Southfield

Southfield

MI

252,613

12/21/12

$

293

$

(14,826

)

2011

Fairview

Falls Church

VA

252,613

1/21/11

89,382

19,592

Bollman (a)

Savage

MD

98,745

6/24/11

7,408

2,346

 

(a) Industrial property. All other acquisitions and dispositions are office properties

 

 

(dollars in thousands)							Maximum			Amount							Interest
				Maturity			Amount			Drawn at		Interest		Draw			Rate at
Sponsored REIT		Location		Date			of Loan			30-Jun-13		Rate (1)		Fee (2)			30-Jun-13
Secured revolving lines of credit
FSP Highland Place I Corp.		Centennial, CO		31-Dec-13		$	5,500		$	1,375		L+4.4%		0.5	%		4.59	%
FSP Satellite Place Corp.		Duluth, GA		31-Mar-14			5,500			5,500		L+4.4%		0.5	%		4.59	%
FSP 1441 Main Street Corp.		Columbia, SC		31-Mar-14			10,800			9,000		L+4.4%		0.5	%		4.59	%
FSP 505 Waterford Corp.		Plymouth, MN		30-Nov-13			7,000			2,350		L+4.4%		0.5	%		4.59	%
FSP Galleria North Corp.		Dallas, TX		30-Jan-15			15,000			9,080		L+5.0%		0.5	%		5.19	%
Secured construction loan
FSP 385 Interlocken
Development Corp.		Broomfield, CO		30-Apr-14			42,000			37,541		L+4.4%		n/a			4.59	%
Mortgage loan secured by property
FSP Energy Tower I Corp. (3)		Houston, TX		5-Jul-14			33,000			33,000		6.41	%	n/a			6.41	%
						$	118,800		$	97,846

 

(1)

The interest rate is 30-day LIBOR rate plus the additional rate indicated, otherwise a fixed rate.

(2)

The draw fee is a percentage of each new advance, and is paid at the time of each new draw.

(3)

The loan has a secured fixed mortgage amount of $33,000,000. A loan fee of $300,630 was paid at the time of closing and funding of the loan on July 5, 2012. The borrower is required to pay the Company an exit fee in the amount of 0.982% of the principal repayment amount.

 

 

(in thousands except per share data)
			As of
			30-Jun-13
Total Market Capitalization Values
Shares outstanding			100,187.4
Closing price, December 31st		$	13.20
Market capitalization		$	1,322,474
Debt			581,500
Total Market Capitalization			1,903,974
			3 Months
			Ended
NOI Components			30-Jun-13
Same Store NOI (1)		$	22,211
Acquisitions (1) (2)			5,107
Property NOI (1)			27,318
Full quarter adjustment (3)			1,575
Stabilized portfolio		$	28,893
Financial Statement Reconciliation:
Rental Revenue		$	46,322
Rental operating expenses			(11,116	)
Real estate taxes and insurance			(7,311	)
Taxes (4)			(115	)
Management fees & other (5)			(462	)
Property NOI (1)		$	27,318
Assets:
Loans outstanding on secured RE		$	97,846
Investments in SARs (book basis)			81,523
Straight-line rent receivable			37,952
Cash and cash equivalents			24,962
Restricted cash			602
Tenant rent receivables			2,331
Prepaid expenses			1,760
Office computers and furniture			510
Other assets:
Deferred financing costs, net			6,254
Other assets: Derivative Market Value			6,739
Phoenix Tower Liquidating Trust (6)			110
Other assets			3,898
		$	264,487
			—
Liabilities:
Debt		$	581,500
Accounts payable & accrued expenses			31,648
Tenant security deposits			3,074
Other liabilities: derivative liability			—
		$	616,222
Other information:
Leased SF to be FFO producing
During 2013, (primarily 2H 2013)			255
Straight-line rental revenue Q2		$	1,186
Management fee income first quarter 2013		$	264
Interest income from secured loans			1,378
Management fees and interest income from loans		$	1,642

 

Footnotes to the components
(1)	See pages 11 & 29 for definitions and reconciliations
(2)	Includes NOI from 2 acquisitions in 2012 and 2 from 2013
(3)	Adjustment to reflect property NOI for a full quarter
	in the quarter acquired, if necessary
(4)	HB3 Tax in Texas is classified as an income tax, though
	we treat it as a real estate tax in Property NOI
(5)	Management & other fees are eliminated in consolidation
	but included on Property NOI
(6)	Expected liquidating distribution from sale of equity interest
	(Collection within 3 years, subject to some expenses)

  

 

Definition of Funds From Operations (“FFO”)

 

The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, 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.

 

FFO should not be considered as an alternative to net income (determined in accordance with GAAP), nor 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 and the National Association of Real Estate Investment Trusts, or NAREIT, may define this term in a different manner. We have included the NAREIT FFO definition in our table and note that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do.

 

We believe that in order to facilitate a clear understanding of the results of the Company, FFO should be examined in connection with net income and cash flows from operating, investing and financing activities in the consolidated financial statements.

 

 

Definition of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA

 

EBITDA is defined as net income plus interest expense, income tax expense and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA excluding gains and losses on sales of properties or shares of equity investments or provisions for losses on assets held for sale. EBITDA and Adjusted EBITDA are not intended to represent cash flow for the period, are 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 are not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA and Adjusted EBITDA are 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 or Adjusted EBITDA the same way, this presentation 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 and Adjusted EBITDA.

 

Definition of Funds Available for Distribution (FAD)

 

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.

 

 

Definition of Property Net Operating Income (Property NOI)

 

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, including amortization of acquired above and below market lease intangibles and impairment charges, 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. 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