News Column

Franklin Street Properties Corp. Announces Second Quarter 2014 Results

July 29, 2014

WAKEFIELD, Mass.--(BUSINESS WIRE)-- Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE MKT: FSP), a real estate investment trust (REIT), announced today Funds From Operations (FFO) of $28.3 million or $0.28 per share for the second quarter ended June 30, 2014. Net income was $3.7 million or $0.04 per share for the second quarter ended June 30, 2014.

The Company evaluates its performance based on FFO, Net Income and EPS and believes each is an important measure. A reconciliation of Net Income to FFO, which is a non-GAAP financial measure, is provided on page 3 of this press release.

  Three Months Ended June 30,     Six Months Ended June 30,
(in 000's except per share data) 2014   2013  

Increase

(Decrease)

2014   2013  

Increase

(Decrease)

   
Net Income $ 3,713     $ 4,741   $ (1,028 ) $ 7,286     $ 9,142   $ (1,856 )
 
FFO $ 28,254     $ 22,810   $ 5,444   $ 57,033     $ 44,046   $ 12,987  
Per Share Data:
EPS $ 0.04 $ 0.05 $ (0.01 ) $ 0.07 $ 0.10 $ (0.03 )
FFO $ 0.28 $ 0.25 $ 0.03 $ 0.57 $ 0.50 $ 0.07
 

Weighted average shares (diluted)

  100,187       91,847     8,340     100,187       87,417     12,770  
 


Comparing results for the second quarter of 2014 to the same period in 2013, FFO increased $5.4 million or $0.03 per share to $28.3 million or $0.28 per share. The FFO increase was primarily from higher property income due to three acquisitions completed since May 2013. The increase was partially offset by higher interest costs. Net Income and EPS was $3.7 million or $0.04 per share for the second quarter of 2014 compared to a net income of $4.7 million or $0.05 per share for the second quarter of 2013.

Comparing results for the six months ended June 30, 2014 to the same period in 2013, FFO increased $13.0 million or $0.07 per share to $57.0 million or $0.57 per share. The FFO increase was primarily from higher property income due to three acquisitions completed since May 2013. The increase was partially offset by higher interest costs and G&A expenses. Net Income and EPS was $7.3 million or $0.07 per share for the six months ended June 30, 2014 compared to a net income of $9.1 million or $0.10 per share for the same period in 2013.

George J. Carter, President and CEO, commented as follows:

“For the second quarter of 2014, FSP's funds from operations, or FFO, totaled approximately $28.3 million or $0.28 per share, a 12% increase over the same period last year. For the six months ending June 30, 2014, FSP's FFO totaled approximately $57.0 million or $0.57 per share, a 14% increase over the same period last year. Dividend distributions declared for the second quarter of 2014 were approximately $19.0 million or $0.19 per share. Our directly-owned real estate portfolio of 39 properties, totaling approximately 9.7 million square feet, was approximately 94% leased as of June 30, 2014, and our comparative same-store rental growth totaled approximately 2.8% through the first six months of 2014.

Currently, we are in active efforts to potentially sell a number of our suburban office assets that we believe are no longer core to our long-term strategy. We would anticipate recycling proceeds from these sales into new acquisitions of urban in-fill office properties within one or more of our five primary markets. Results from these efforts should become known during the second half of this year.

As we begin the third quarter of 2014, our property portfolio is operating smoothly with generally improving rental metrics in most of our locations. We remain very optimistic about our continuing growth prospects for the balance of 2014 and beyond.”

Dividend Update

On July 11, 2014, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended June 30, 2014 of $0.19 per share of common stock that will be paid on August 14, 2014 to stockholders of record on July 25, 2014.

FFO Guidance

Our full year FFO guidance for 2014 is reiterated to be in the range of $1.09 to $1.12 per diluted share. This guidance (a) excludes the impact of future acquisitions, dispositions, debt financings or repayments or other capital market transactions; (b) reflects estimates from our ongoing portfolio of properties, other real estate investments and G&A expenses; and (c) reflects our current expectations of economic conditions in the coming year. We will update guidance quarterly in our earnings releases. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above.

Real Estate Update

Supplementary schedules provide property information for the Company’s owned real estate portfolio and for two non-consolidated REITs in which the Company holds preferred stock interests as of June 30, 2014. The Company will also be filing an updated supplemental information package that will provide stockholders and the financial community with additional operating and financial data. The Company will file this supplemental information package with the SEC and make it available on its website at www.franklinstreetproperties.com.

Funds From Operations (FFO)

A reconciliation of Net Income to FFO is shown below and a definition of FFO is provided on Supplementary Schedule H. Management believes FFO is used broadly throughout the real estate investment trust (REIT) industry as a measurement of performance. The Company has included the NAREIT FFO definition in the table and notes that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. The Company’s computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that define FFO differently.

Reconciliation of Net Income to FFO:   Three Months Ended   Six Months Ended
June 30, June 30,
(In thousands, except per share amounts) 2014   20132014   2013
   
Net income $ 3,713 $ 4,741 $ 7,286 $ 9,142
GAAP loss from non-consolidated REITs 552 196 1,036 383
FFO from non-consolidated REITs 351 696 770 1,343
Depreciation & amortization   23,638       17,044     47,927       33,028  
NAREIT FFO 28,254 22,677 57,019 43,896
Acquisition costs of new properties   -       133     14       150  
Funds From Operations (FFO) $ 28,254     $ 22,810   $ 57,033     $ 44,046  
 
Per Share Data
EPS $ 0.04 $ 0.05 $ 0.07 $ 0.10
FFO $ 0.28 $ 0.25 $ 0.57 $ 0.50
 
Weighted average shares (basic and diluted)   100,187       91,847     100,187       87,417  
 


Today’s news release, along with other news about Franklin Street Properties Corp., is available on the Internet at www.franklinstreetproperties.com. We routinely post information that may be important to investors in the Investor Relations section of our website. We encourage investors to consult that section of our website regularly for important information about us and, if they are interested in automatically receiving news and information as soon as it is posted, to sign up for E-mail Alerts.

Earnings Call

A conference call is scheduled for July 30, 2014 at 9:00 a.m. (ET) to discuss the second quarter 2014 results. To access the call, please dial 1-877-507-4376. Internationally, the call may be accessed by dialing 1-412-317-6014. To listen via live audio webcast, please visit the Webcasts & Presentations section in the Investor Relations section of the Company's website (www.franklinstreetproperties.com) at least ten minutes prior to the start of the call and follow the posted directions. The webcast will also be available via replay from the above location starting one hour after the call is finished.

About Franklin Street Properties Corp.

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on 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. To learn more about FSP please visit our website at www.franklinstreetproperties.com.

Forward-Looking Statements

Statements made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements.Accordingly, readers are cautioned not to place undue reliance on forward-looking statements.Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy, geopolitical events and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments.See the “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2013, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission.Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

Franklin Street Properties Corp.

Earnings Release

Supplementary Information

Table of Contents

 
Franklin Street Properties Corp. Financial Results A-C
Real Estate Portfolio Summary Information D
Portfolio and Other Supplementary Information E
Percentage of Leased Space F
Largest 20 Tenants – FSP Owned Portfolio G
Definition of Funds From Operations (FFO) H
 
Franklin Street Properties Corp. Financial Results
Supplementary Schedule A
Condensed Consolidated Income (Loss) Statements
(Unaudited)
   
For theFor the
Three Months EndedSix Months Ended
    June 30,   June 30,
(in thousands, except per share amounts)   2014   2013   2014   2013
   
Revenue:
Rental $ 60,994 $ 46,017 $ 122,591 $ 88,859
Related party revenue:
Management fees and interest income from loans 1,671 1,643 3,314 3,265
Other     76       12       99       43  
Total revenue     62,741       47,672       126,004       92,167  
 
Expenses:
Real estate operating expenses 14,995 11,116 30,066 21,886
Real estate taxes and insurance 9,763 7,308 19,014 13,903
Depreciation and amortization 23,563 16,921 47,863 32,702
Selling, general and administrative 3,148 3,204 6,420 5,736
Interest     6,891       4,174       14,067       8,382  
 
Total expenses     58,360       42,723       117,430       82,609  
 
Income before interest income, equity in losses of
non-consolidated REITs and taxes 4,381 4,949 8,574 9,558
Interest income 1 4 2 5
Equity in losses of non-consolidated REITs     (552 )     (195 )     (1,036 )     (383 )
 
Income before taxes on income 3,830 4,758 7,540 9,180
Taxes on income     117       115       254       234  
 
Income from continuing operations     3,713       4,643       7,286       8,946  
 
Discontinued operations:
Income from discontinued operations, net of income tax     -       98       -       196  
Total discontinued operations     -       98       -       196  
 
Net income   $ 3,713     $ 4,741     $ 7,286     $ 9,142  
 
Weighted average number of shares outstanding,
basic and diluted     100,187       91,847       100,187       87,417  
 
Earnings per share, basic and diluted, attributable to:
Continuing operations $ 0.04 $ 0.05 $ 0.07 $ 0.10
Discontinued operations     -       -       -       -  
Net income per share, basic and diluted   $ 0.04     $ 0.05     $ 0.07     $ 0.10  
 
Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheets
(Unaudited)
   
June 30,December 31,
(in thousands, except share and par value amounts)   2014   2013
Assets:
Real estate assets, net $ 1,549,963 $ 1,568,338
Acquired real estate leases, less accumulated amortization
of $88,454 and $69,848, respectively 161,519 183,454
Investment in non-consolidated REITs 79,405 80,494
Cash and cash equivalents 18,455 19,623
Restricted cash 728 643
Tenant rent receivables, less allowance for doubtful accounts
of $175 and $50, respectively 2,867 5,102
Straight-line rent receivable, less allowance for doubtful accounts
of $135 and $135, respectively 46,021 42,261
Prepaid expenses and other assets 9,006 10,506
Related party mortgage loan receivables 88,436 99,746
Other assets: derivative asset 2,626 5,321
Office computers and furniture, net of accumulated depreciation
of $891 and $747, respectively 710 709
Deferred leasing commissions, net of accumulated amortization
of $17,099 and $15,031, respectively     28,861       27,837  
Total assets   $ 1,988,597     $ 2,044,034  
 
Liabilities and Stockholders’ Equity:
Liabilities:
Bank note payable $ 296,500 $ 306,500
Term loans payable 620,000 620,000
Accounts payable and accrued expenses 34,590 44,137
Accrued compensation 2,052 2,985
Tenant security deposits 4,259 4,027
Other liabilities: derivative liability 5,985 2,044
Acquired unfavorable real estate leases, less accumulated amortization
of $7,503 and $6,926, respectively     12,467       14,175  
Total liabilities     975,853       993,868  
 
Commitments and contingencies
 
Stockholders’ Equity:
Preferred stock, $.0001 par value, 20,000,000 shares
authorized, none issued or outstanding - -
Common stock, $.0001 par value, 180,000,000 shares authorized,
100,187,405 and 100,187,405 shares issued and outstanding, respectively 10 10
Additional paid-in capital 1,273,556 1,273,556
Accumulated other comprehensive income (loss) (3,359 ) 3,277
Accumulated distributions in excess of accumulated earnings     (257,463 )     (226,677 )
Total stockholders’ equity     1,012,744       1,050,166  
Total liabilities and stockholders’ equity   $ 1,988,597     $ 2,044,034  
 
Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
For the
Six Months Ended
June 30,
(in thousands)   2014     2013
Cash flows from operating activities:    
Net income $ 7,286 $ 9,142
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 48,854 33,968
Amortization of above market lease 63 (82 )
Equity in losses of non-consolidated REITs 1,036 383
Increase (decrease) in bad debt reserve 125 (1,190 )
Changes in operating assets and liabilities:
Restricted cash (85 ) (27 )
Tenant rent receivables 2,110 608
Straight-line rents (3,323 ) (1,842 )
Lease acquisition costs (437 ) (669 )
Prepaid expenses and other assets 503 (870 )
Accounts payable, accrued expenses and other items (8,405 ) (1,244 )
Accrued compensation (933 ) (863 )
Tenant security deposits 232 585
Payment of deferred leasing commissions     (3,908 )       (3,711 )
Net cash provided by operating activities     43,118         34,188  
Cash flows from investing activities:

Purchase of real estate assets, office computers and furniture

(7,578 ) (164,189 )
Acquired real estate leases - (28,105 )
Investment in non-consolidated REITs - 4,752
Distributions in excess of earnings from non-consolidated REITs 54 54
Repayment of related party mortgage loan receivable 13,880 -
Investment in related party mortgage loan receivable (2,570 ) (3,950 )
Changes in deposits on real estate assets     -         (3,000 )
Net cash provided by (used in) investing activities     3,786         (194,438 )
Cash flows from financing activities:
Proceeds from stock offering - 241,500
Offering costs - (10,789 )
Distributions to stockholders (38,072 ) (31,516 )
Repayments of bank note payable (20,000 ) (45,250 )
Borrowings under bank note payable     10,000         10,000  
Net cash provided by (used in) financing activities     (48,072 )       163,945  
Net increase (decrease) in cash and cash equivalents (1,168 ) 3,695
Cash and cash equivalents, beginning of year     19,623         21,267  
Cash and cash equivalents, end of period   $ 18,455       $ 24,962  
 
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary Information
(Unaudited & Approximated)
 
Commercial portfolio lease expirations (1)
        Total     % of
YearSquare FeetPortfolio
2014 359,210 3.7%
2015 756,895 7.8%
2016 956,247 9.9%
2017 1,062,897 11.0%
2018 916,902 9.5%
Thereafter (2) 5,634,064     58.1%
9,686,215     100.0%
 
(1)   Percentages are determined based upon square footage of expiring commercial leases.
(2) Includes 576,155 square feet of current vacancies.
 
 
(dollars & square feet in 000's)   As of June 30, 2014
# of     % of       Square   % of

State

PropertiesInvestmentPortfolioFeetPortfolio
 
Texas 10 $ 398,816 25.7% 2,537 26.2%
Colorado 6 451,686 29.1% 2,118 21.9%
Georgia 3 223,670 14.4% 1,396 14.4%
Virginia 4 94,466 6.1% 685 7.1%
Minnesota 2 43,045 2.7% 628 6.5%
Missouri 3 63,235 4.1% 477 4.9%
North Carolina 3 64,549 4.2% 431 4.4%
Illinois 2 47,158 3.1% 372 3.8%
Maryland 1 51,935 3.4% 325 3.4%
Florida 1 43,785 2.8% 213 2.2%
Indiana 1 33,415 2.2% 205 2.1%
California 2 20,621 1.3% 182 1.9%
Washington 1     13,372   0.9% 117   1.2%
39   $ 1,549,753   100.0% 9,686   100.0%
 
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
Portfolio and Other Supplementary Information
(Unaudited & Approximated)
       
Capital Expenditures
Owned Portfolio Three Months Ended Six Months Ended
(in thousands) 30-Jun-1430-Jun-1330-Jun-1430-Jun-13
 
Tenant improvements $ 1,837 $ 5,754 $ 2,970 $ 7,483
Deferred leasing costs 2,795 1,087 3,907 3,900
Building improvements   2,202     1,622     3,321     2,740  
$ 6,834   $ 8,463   $ 10,198   $ 14,123  
 
Square foot & leased percentages     June 30,     December 31,
  2014 2013
 
Owned portfolio of commercial real estate
Number of properties 39 39
Square feet 9,686,215 9,685,285
Leased percentage 94.1% 94.1%
 
Investments in non-consolidated REITs
Number of properties 2 2
Square feet 1,395,500 1,395,500
Leased percentage 65.5% 64.1%
 
Single Asset REITs (SARs) managed
Number of properties 11 12
Square feet 2,687,775 3,067,199
Leased percentage 89.1% 87.4%
 
Total owned, investments & managed properties
Number of properties 52 53
Square feet 13,769,490 14,147,984
Leased percentage 90.2% 89.7%
 


The following table shows property information for our investments in non-consolidated REITs:

      Square   % Leased   % Interest
Single Asset REIT nameCityStateFeet30-Jun-14Held
FSP 303 East Wacker Drive Corp.Chicago IL 860,429 56.1% 43.7%
FSP Grand Boulevard Corp.Kansas City MO 535,071   80.5% 27.0%
1,395,500   65.5%
 
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F
Percentage of Leased Space
(Unaudited & Estimated)
             
FirstSecond
% Leased (1)Quarter% Leased (1)Quarter
as ofAverage %as ofAverage %
Property NameLocationSquare Feet31-Mar-14Leased (2)30-Jun-14Leased (2)
 
1 PARK SENECACharlotte, NC 109,674 83.6% 82.5% 87.8% 86.2%
2 HILLVIEW CENTER Milpitas, CA 36,288 100.0% 100.0% 100.0% 100.0%
3 FOREST PARKCharlotte, NC 62,212 100.0% 100.0% 100.0% 100.0%
4 CENTENNIAL Colorado Springs, CO 110,405 97.3% 89.4% 97.3% 97.3%
5 MEADOW POINTChantilly, VA 138,537 92.6% 92.6% 92.6% 92.6%
6 TIMBERLAKE Chesterfield, MO 232,766 98.3% 98.3% 98.3% 98.3%
7 FEDERAL WAYFederal Way, WA 117,010 54.4% 54.4% 56.5% 55.8%
8 NORTHWEST POINT Elk Grove Village, IL 176,848 100.0% 100.0% 100.0% 100.0%
9 TIMBERLAKE EASTChesterfield, MO 116,197 91.0% 91.0% 91.0% 91.0%
10 PARK TENHouston, TX 157,460 100.0% 100.0% 80.3% 86.8%
11 MONTAGUESan Jose, CA 145,951 100.0% 100.0% 81.1% 93.7%
12 ADDISONAddison, TX 293,926 94.3% 94.3% 97.3% 95.3%
13 COLLINS CROSSING Richardson, TX 298,766 99.5% 99.5% 99.5% 99.5%
14 GREENWOOD PLAZA Englewood, CO 196,236 100.0% 100.0% 100.0% 100.0%
15 RIVER CROSSING Indianapolis, IN 205,059 99.1% 99.1% 99.1% 99.1%
16 LIBERTY PLAZAAddison, TX 218,934 96.0% 96.0% 96.0% 96.0%
17 INNSBROOKGlen Allen, VA 298,456 99.9% 99.9% 99.9% 99.9%
18 380 INTERLOCKEN Broomfield, CO 240,184 95.2% 88.5% 95.2% 95.2%
19 BLUE LAGOON Miami, FLA 212,619 100.0% 100.0% 100.0% 100.0%
20 ELDRIDGE GREENHouston, TX 248,399 100.0% 100.0% 100.0% 100.0%
21 WILLOW BENDPlano, TX 117,050 100.0% 100.0% 100.0% 100.0%
22 ONE OVERTON PARKAtlanta, GA 387,267 98.9% 98.9% 98.9% 98.9%
23 390 INTERLOCKEN Broomfield, CO 241,516 69.4% 69.4% 70.1% 69.8%
24 EAST BALTIMOREBaltimore, MD 325,445 77.8% 77.8% 81.2% 81.1%
25 PARK TEN PHASE II Houston, TX 156,746 100.0% 100.0% 100.0% 100.0%
26 LAKESIDE CROSSING I Maryland Heights, MO 127,778 100.0% 100.0% 100.0% 100.0%
27 LOUDOUN TECHDulles, VA 136,658 100.0% 100.0% 100.0% 100.0%
28 4807 STONECROFTChantilly, VA 111,469 100.0% 100.0% 100.0% 100.0%
29 EDEN BLUFFEden Prairie, MN 153,028 100.0% 100.0% 100.0% 100.0%
30 121 SOUTH EIGHTH ST Minneapolis, MN 475,012 90.7% 90.7% 90.3% 90.3%
31 EMPEROR BOULEVARD Durham, NC 259,531 100.0% 100.0% 100.0% 100.0%
32 LEGACY TENNYSON CTR Plano, TX 202,600 100.0% 100.0% 100.0% 100.0%
33 ONE LEGACY Plano, TX 214,110 100.0% 100.0% 100.0% 100.0%
34 909 DAVIS Evanston, IL 195,245 97.9% 97.9% 97.9% 97.9%
35 ONE RAVINIA DRIVE Atlanta, GA 386,603 93.6% 91.4% 93.7% 93.7%
36 WESTCHASE I & II Houston, TX 629,025 97.1% 97.1% 97.5% 97.5%
37 1999 BROADWAYDenver, CO 673,839 95.6% 95.7% 92.6% 92.7%
38 999 PEACHTREEAtlanta, GA 621,946 93.0% 93.8% 93.5% 93.5%
39 1001 17th STREET Denver, CO 655,420 88.5% 88.5% 88.5% 88.5%
         
TOTAL WEIGHTED AVERAGE9,686,21594.5%94.2%94.1%94.3%
 
(1)   % Leased as of month's end includes all leases that expire on the last day of the quarter.
(2) Average quarterly percentage is the average of the end of the month leased percentage for each of the 3 months during the quarter.
 
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Largest 20 Tenants – FSP Owned Portfolio
(Unaudited & Estimated)
 
The following table includes the largest 20 tenants in FSP’s owned portfolio based on leased square feet:
       
 
As of June 30, 2014
% of

Tenant

Sq FtPortfolio
1 TCF National Bank 263,111 2.7%
2 Quintiles Transnational Corp 259,531 2.7%
3 CITGO Petroleum Corporation 248,399 2.6%
4 Sutherland Asbill Brennan LLP 243,839 2.5%
5 Newfield Exploration Company 234,495 2.4%
6 US Government (a) 229,752 2.4%
7 Burger King Corporation 212,619 2.2%
8 Denbury Onshore, LLC 202,600 2.1%
9 RGA Reinsurance Company 197,354 2.0%
10 SunTrust Bank (b) 182,888 1.9%
11 Citicorp Credit Services, Inc 176,848 1.8%
12 C.H. Robinson Worldwide, Inc 153,028 1.6%
13 T-Mobile South, LLC dba T-Mobile 151,792 1.6%
14 Houghton Mifflin Harcourt Publishing Company 150,050 1.5%
15 Petrobras America, Inc. 144,813 1.5%
16 Murphy Exploration & Production Company 144,677 1.5%
17 Argo Data Resource Corporation 138,540 1.4%
18 Monsanto Company 127,778 1.3%
19 Federal National Mortgage Association 123,144 1.3%
20 Giesecke & Devrient America 123,098     1.3%
Total 3,708,356     38.3%
 

      (a)

  Includes 180,444 and 37,813 square feet which expire in 2018 & 2014, respectively.
The remaining 11,495 square feet expire between 2015 - 2020.

      (b)

Includes 55,388 square feet which expires October 31, 2016.
 

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

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 on properties or investments in non-consolidated REITs, and after adjustments to exclude equity in income or losses from, and, to include the proportionate share of FFO from, non-consolidated 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 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.




Franklin Street Properties Corp.

John Demeritt, 877-686-9496


Source: Franklin Street Properties Corp.


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