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About Franklin Street Properties Corp.
Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on achieving current income and long-term growth through investments in commercial properties. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. 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, 2012, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.
Franklin Street Properties Corp. Earnings Release Supplementary Information Table of Contents Franklin Street Properties Corp. Financial Results A-C Real Estate Portfolio Summary Information D Portfolio and Other Supplementary Information E Quarterly Information - Prior Four Quarters F Percentage of Leased Space G Largest 20 Tenants - FSP Owned Portfolio H Definition of Funds From Operations (FFO) I Franklin Street Properties Corp. Financial Results Supplementary Schedule A Condensed Consolidated Income (Loss) Statements (Unaudited) For the For the Three Months Ended Year Ended December 31, December 31, -------------------- --------------------(in thousands, except per share amounts) 2012 2011 2012 2011 --------- --------- --------- ---------Revenue: Rental $ 41,532 $ 36,744 $ 151,656 $ 134,238Related party revenue: Management fees and interest income from loans 1,801 1,051 10,947 4,046Other 87 29 199 49 --------- --------- --------- --------- Total revenue 43,420 37,824 162,802 138,333 --------- --------- --------- ---------Expenses: Real estate operating expenses 10,501 9,486 37,441 35,076 Real estate taxes and insurance 5,960 5,357 22,913 20,114 Depreciation and amortization 15,225 12,951 54,872 47,622 Selling, general and administrative 2,462 2,012 9,916 6,913 Interest 4,167 3,261 16,068 12,666 --------- --------- --------- --------- Total expenses 38,315 33,067 141,210 122,391 --------- --------- --------- ---------Income before interest income, equity in earnings of non- consolidated REITs and taxes 5,105 4,757 21,592 15,942Interest income 34 3 51 22Equity in earnings of non- consolidated REITs 972 978 2,033 3,685 --------- --------- --------- ---------Income before taxes on income 6,111 5,738 23,676 19,649Taxes on income 99 82 335 267 --------- --------- --------- --------- Income from continuing operations 6,012 5,656 23,341 19,382 --------- --------- --------- --------- Discontinued operations: Income (loss) from discontinued operations, net of income tax (26) (594) (882) 2,203 Gain (loss) on sale, less applicable income tax (526) - (14,826) 21,939 --------- --------- --------- --------- Total discontinued operations (552) (594) (15,708) 24,142 --------- --------- --------- ---------Net income (loss) $ 5,460 $ 5,062 $ 7,633 $ 43,524 ========= ========= ========= =========Weighted average number of shares outstanding, basic and diluted 82,937 82,937 82,937 81,857 ========= ========= ========= =========Earnings (loss) per share, basic and diluted, attributable to: Continuing operations $ 0.07 $ 0.07 $ 0.28 $ 0.24 Discontinued operations - (0.01) (0.19) 0.29 --------- --------- --------- ---------Net income per share, basic and diluted $ 0.07 $ 0.06 $ 0.09 $ 0.53 ========= ========= ========= ========= Franklin Street Properties Corp. Financial Results Supplementary Schedule B Condensed Consolidated Balance Sheets (Unaudited) December 31, ------------------------(in thousands, except share and par value amounts) 2012 2011 ----------- -----------Assets:Real estate assets, net $ 1,142,628 $ 991,225Acquired real estate leases, less accumulated amortization of $40,062 and $31,189, respectively 111,982 91,613Investment in non-consolidated REITs 81,960 87,598Assets held for sale - 15,355Cash and cash equivalents 21,267 23,813Restricted cash 575 493Tenant rent receivables, less allowance for doubtful accounts of $1,300 and $1,235, respectively 1,749 1,460Straight-line rent receivable, less allowance for doubtful accounts of $135 and $135, respectively 35,441 28,502Prepaid expenses 1,106 1,223Related party mortgage loan receivables 93,896 140,516Other assets 12,655 4,070Office computers and furniture, net of accumulated depreciation of $584 and $428, respectively 544 468Deferred leasing commissions, net of accumulated amortization of $11,812 and $9,139, respectively 23,376 22,325 ----------- ----------- Total assets $ 1,527,179 $ 1,408,661 =========== ===========Liabilities and Stockholders' Equity:Liabilities: Bank note payable $ 216,750 $ 449,000 Term loan payable 400,000 - Accounts payable and accrued expenses 31,122 26,446 Accrued compensation 2,540 2,222 Tenant security deposits 2,489 2,008 Other liabilities: derivative liability 1,219 - Acquired unfavorable real estate leases, less accumulated amortization of $4,870 and $3,759, respectively 8,310 7,618 ----------- ----------- Total liabilities 662,430 487,294 ----------- -----------Commitments and contingenciesStockholders' 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, 82,937,405 and 82,937,405 shares issued and outstanding, respectively 8 8 Additional paid-in capital 1,042,876 1,042,876 Accumulated other comprehensive loss (1,219) - Accumulated distributions in excess of accumulated earnings (176,916) (121,517) ----------- ----------- Total stockholders' equity 864,749 921,367 ----------- ----------- Total liabilities and stockholders' equity $ 1,527,179 $ 1,408,661 =========== =========== Franklin Street Properties Corp. Financial Results Supplementary Schedule C Condensed Consolidated Statements of Cash Flows (Unaudited) December 31, ------------------------(in thousands) 2012 2011 ----------- -----------Cash flows from operating activities: Net income $ 7,633 $ 43,524 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 57,500 50,261 Amortization of above market lease 71 (47) Gain (loss) on sale, less applicable income tax 14,826 (21,939) Equity in earnings of non-consolidated REITs (2,033) (3,086) Distributions from non-consolidated REITs 705 3,474 Increase (decrease) in bad debt reserve 65 (365) Changes in operating assets and liabilities: Restricted cash (82) (73) Tenant rent receivables (354) 827 Straight-line rents (4,464) (9,878) Lease acquisition costs (2,520) - Prepaid expenses and other assets (328) 1,611 Accounts payable, accrued expenses and other items 3,717 4,213 Accrued compensation 318 419 Tenant security deposits 481 78 Payment of deferred leasing commissions (5,179) (8,058) ----------- ----------- Net cash provided by operating activities 70,356 60,961 ----------- -----------Cash flows from investing activities: Purchase of real estate assets, office computers and furniture (183,868) (174,020) Acquired real estate leases (37,302) (62,230) Investment in non-consolidated REITs (1) (10) Distributions in excess of earnings from non- consolidated REITs 2,105 1,582 Investment in related party mortgage loan receivable (74,580) (82,832) Repayment of related party mortgage loan receivable 121,200 - Changes in deposits on real estate assets - 200 Investment in assets held for syndication - 2,230 Proceeds received on sales of real estate assets 157 96,790 ----------- ----------- Net cash used in investing activities (172,289) (218,290) ----------- -----------Cash flows from financing activities: Distributions to stockholders (63,032) (62,177) Proceeds from equity offering - 18,001 Offering costs - (706) Borrowings under bank note payable 294,750 449,000 Repayments of bank note payable (527,000) (209,968) Borrowing (repayment) of term loan payable 400,000 (74,850) Deferred financing costs (5,331) (5,388) Swap termination payment - (983) ----------- ----------- Net cash provided by financing activities 99,387 112,929 ----------- -----------Net increase (decrease) in cash and cash equivalents (2,546) (44,400)Cash and cash equivalents, beginning of year 23,813 68,213 ----------- -----------Cash and cash equivalents, end of year $ 21,267 $ 23,813 =========== =========== Franklin Street Properties Corp. Earnings Release Supplementary Schedule D Real Estate Portfolio Summary Information (Unaudited & Approximated) Commercial portfolio lease expirations (1) Total % of Year Square Feet Portfolio ------------ ------------ 2013 278,946 3.6% 2014 417,721 5.3% 2015 1,074,381 13.7% 2016 1,099,491 14.0% 2017 876,268 11.2% Thereafter (2) 4,107,872 52.2% ------------ ------------ 7,854,679 100.0% ============ ============
