WAKEFIELD, MA -- (MARKET WIRE) -- 07/31/07 --
Franklin Street Properties Corp. (the
"Company" or "FSP") (AMEX: FSP), an investment firm specializing in real
estate, announced today Net Income of $32.5 million and Earnings Per Share
(EPS) of $0.46 for the second quarter ended June 30, 2007. The Company
also announced Adjusted Funds From Operations (AFFO) of $19.2 million or
$0.27 per share and AFFO plus Gains on Sales (AFFO+GOS) of $40.8 million or
$0.58 per share and provided an update on other activities.
The Company evaluates its performance based on Net Income, EPS, AFFO and
AFFO+GOS, and believes each is an important measure. A reconciliation of
Net Income to AFFO and AFFO+GOS, which are non-GAAP financial measures, is
provided in this press release.
(in 000's except per share data)
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
Increase Increase
2007 2006 (Decrease) 2007 2006 (Decrease)
-------- -------- ---------- -------- -------- ----------
Net Income $ 32,476 $ 40,477 $ (8,001) $ 42,208 $ 53,616 $ (11,408)
======== ======== ========== ======== ======== ==========
AFFO $ 19,202 $ 20,078 $ (876) $ 37,524 $ 40,393 $ (2,869)
GOS 21,590 28,108 (6,518) 21,590 28,108 (6,518)
-------- -------- ---------- -------- -------- ----------
AFFO+GOS $ 40,792 $ 48,186 $ (7,394) $ 59,114 $ 68,501 $ (9,387)
======== ======== ========== ======== ======== ==========
Per Share Data:
EPS $ 0.46 $ 0.60 $ (0.14) $ 0.60 $ 0.84 $ (0.24)
AFFO $ 0.27 $ 0.30 $ (0.03) $ 0.53 $ 0.64 $ (0.11)
AFFO+GOS $ 0.58 $ 0.72 $ (0.14) $ 0.84 $ 1.08 $ (0.24)
Weighted ave
shares
(diluted) 70,766 67,149 3,617 70,766 63,492 7,274
-------- -------- ---------- -------- -------- ----------
Net Income and EPS decreased $8.0 million or $0.14 per share, AFFO
decreased $0.9 million or $0.03 per share and AFFO+GOS decreased $7.4
million or $0.14 per share in the second quarter of 2007 compared to the
same period in 2006. Net Income and EPS decreased $11.4 million or $0.24
per share, AFFO decreased $2.9 million or $0.11 per share and AFFO+GOS
decreased $7.4 million or $0.14 per share for the first half of 2007
compared to the same period in 2006.
The following significant factors affected Net Income, EPS, AFFO and
AFFO+GOS for the three and six months ended June 30, 2007 compared to
results for the same periods in 2006:
For the second quarter of 2007 net income decreased $8.0 million compared
to the second quarter of 2006. The decrease was principally a result of an
increase to depreciation and amortization of approximately $2.1 million,
which was a result of the effect of mergers and acquisitions made in the
last twelve months; a decrease in interest income of approximately $0.2
million; and a decrease of $6.5 million from lower gains on sales of
properties when compared to the second quarter of 2006. These decreases
were partially offset by increases to net operating income from properties
of approximately $0.6 million and an increase to syndication and
transaction fee income of approximately $0.2 million for the second quarter
of 2007 compared to the second quarter of 2006. AFFO decreased $0.9
million principally as a result of these factors and an increase in
straight-line rent, which is excluded from AFFO as it is a non-cash item,
during the second quarter of 2007 compared to the second quarter of 2006.
AFFO+GOS also decreased as a result of these factors and from lower gains
on sales of assets, which were $6.5 million lower for the three months
ended June 30, 2007 compared to the same period in 2006. For the first
half of 2007 net income decreased $11.4 million compared to the same period
in 2006. The decrease was principally a result of a $4.8 million decrease
in termination fee income during the first half of 2007 compared to the
first half of 2006, which was partially offset by a $3.4 million increase
in net operating income from properties; an increase to depreciation and
amortization expense of approximately $5.0 million, which was a result of
the effect of mergers and acquisitions made in the last twelve months; an
increase to selling, general and administrative costs of $0.1 million; a
decrease in interest income of approximately $0.1 million; and a decrease
of $6.5 million from lower gains on sales of properties when compared to
the first half of 2006. These decreases were partially offset by increases
from investment banking income of approximately $1.7 million for the first
half of 2007 compared to the first half of 2006. AFFO decreased $2.9
million principally as a result of these factors and an increase in
straight-line rent of approximately $2.4 million and a decrease in
amortization of favorable leases of approximately $0.5 million, which are
excluded from AFFO as they are non-cash items, during the first half of
2007 compared to the first half of 2006. AFFO+GOS also decreased as a
result of these factors and from lower gains on sales of assets, which were
$6.5 million lower for the six months ended June 30, 2007 compared to the
same period in 2006.
For the first half of 2007, our investment banking related revenues
increased 23% over the same period in 2006. The increase to syndication
and transaction fees were a result of increased investment banking activity
compared to the first half of 2006. Gross proceeds on the sale of
securities, which our revenue and expenses in investment banking are
directly related to, increased $4.9 million to $60.1 million for the second
quarter of 2007 compared to the same period in 2006. Gross proceeds
increased $24.9 million to $109.3 million for the first half of 2007
compared to the same period in 2006.
George J. Carter, President and CEO, commented as follows:
"As illustrated in the table below, second quarter 2007 net income, EPS,
AFFO and AFFO+GOS were sequentially higher than the first quarter of the
year. For the first half of 2007, FSP's profits represented by AFFO+GOS
totaled approximately $59.1 million or $0.84 per share. Dividend
distributions paid in the first two quarters of 2007 totaled approximately
$43.9 million or $0.62 per share, which is a payout ratio of 74% of
AFFO+GOS. Because of the transactional nature of significant portions of
our real estate investment business and their timing profiles, quarterly
financial metrics historically have been quite variable. FSP does not
manage its business to quarterly targets but rather longer-term ones.
Consequently, FSP management considers annual financial results much more
meaningful for performance and trend measurements. I continue to be very
optimistic about FSP's full year 2007 financial performance potential and
growth prospects."
A comparison of sequential results for the first and second quarter of
2007:
Three Months Ended
-----------------------------
(in 000's except per share data) 31-Mar-07 30-Jun-07 Increase
--------- --------- ---------
Net Income $ 9,732 $ 32,476 $ 22,744
========= ========= =========
AFFO $ 18,323 $ 19,202 $ 879
GOS - 21,590 21,590
--------- --------- ---------
AFFO+GOS $ 18,323 $ 40,792 $ 22,469
========= ========= =========
Per Share Data:
EPS $ 0.14 $ 0.46 $ 0.32
AFFO $ 0.26 $ 0.27 $ 0.01
AFFO+GOS $ 0.26 $ 0.58 $ 0.32
Weighted ave shares (diluted) 70,766 70,766
--------- ---------
"FSP is an investment firm specializing in, and focusing on, the asset
class of real estate. Our Company has three major business components that
contribute to its profitability. They are:
-- Rental income from properties
-- Gains or losses on the sale of properties
-- Fee income from real estate investment banking activities
Rental Income for the second quarter of 2007 was about as expected, with
leased square footage of our 27 continuing properties averaging
approximately 88%. Most of our office markets continue to show positive
trends of absorption, occupancy and rent growth, tracking the national
published statistics for their respective geographical locations. Our
117,277 square foot property in the Seattle/Tacoma area has finished the
majority of its physical repositioning from single to multi-tenant use and
has begun lease-up. Our 145,951 square foot property located in Silicon
Valley is still completing its construction renovations from single to
multi-tenant use. Approximately 2% of our portfolio's leases are due to
expire for the balance of 2007. Approximately 279,488 square feet, or
about 6% of our 5,066,813 total square footage property portfolio, is
scheduled to expire in 2008.
Property Sales totaling 302,771 square feet from two properties took place
in the second quarter. Gains from those sales totaled approximately $21.6
million. Proceeds from the two sales have been used to repay that portion
of a borrowing under our line of credit which was taken in connection with
a large property acquisition currently being syndicated through our
Investment Banking group. FSP has now funded 100% of this acquisition
mortgage loan with its own capital, which is on our balance sheet as an
asset held for syndication that currently totals approximately $77.6
million. We continue to upgrade our property portfolio through selective
dispositions and acquisitions. On June 13, 2007, we acquired a 25-story,
approximately 326,000 square foot office tower in downtown Baltimore,
Maryland for $62,750,000. The acquisition was structured as a "reverse"
1031 exchange in anticipation of potential future property dispositions.
Investment Banking activity for the second quarter of 2007 totaled
approximately $60 million. In January of 2007, an affiliate of FSP
purchased a property for investment syndication. Permanent equity
capitalization of the property was structured as a private placement
preferred stock offering totaling $221 million. Through the first half of
2007, FSP has subscribed approximately $109 million of permanent equity for
the project. Our acquisition executives continue to work on other property
investment opportunities and are optimistic about the prospects for
additional investment banking product for the balance of 2007."
Dividend Announcement
On July 20, 2007, the Board of Directors of the Company declared a cash
distribution of $0.31 per share of common stock payable on August 20, 2007
to stockholders of record on July 31, 2007.
Real Estate Update
On July 16, 2007, we completed the sale of a suburban office property
located in Westford, Massachusetts. Gross proceeds from the sale of the
property were approximately $11.5 million, which resulted in a net gain of
approximately $1.9 million. Supplementary Schedule D presents our
continuing real estate portfolio of 27 properties as of June 30, 2007.
Stock Repurchase Plan Update
On October 28, 2005, FSP announced that its Board of Directors had
authorized the repurchase of up to $35.0 million of the Company's common
stock from time to time in the open market or in privately negotiated
transactions (the "Stock Repurchase Plan"). The Stock Repurchase Plan
expires on the earlier of (a) November 1, 2007 or (b) a determination by
FSP's Board of Directors to discontinue repurchases. The Company has not
repurchased shares under the Stock Repurchase Plan since December 2005 and
currently has $21,008,101 available for repurchases under the Stock
Repurchase Plan. FSP believes its shares are undervalued and currently
intends to resume repurchases of its common stock from time to time during
the remainder of 2007. The timing and amount of any repurchases will be
determined by FSP's management based on its evaluation of market conditions
and other factors and will be made in accordance with the terms and
conditions of the Stock Repurchase Plan. Repurchases may also be made under
a Rule 10b5-1 plan, which would permit shares to be repurchased when the
Company might otherwise be precluded from doing so under insider trading
laws.
A reconciliation of Net Income to AFFO and AFFO+GOS is shown below and
definitions of AFFO and AFFO+GOS are provided on Supplemental Schedules F
and G. We believe AFFO is used broadly throughout the real estate
investment trust (REIT) industry as a measurement of performance and is
generally calculated in a similar manner to our calculation. We also
believe that AFFO+GOS is an important measure as it considers investment
performance.
Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except per share ------------------ ------------------
amounts) 2007 2006 2007 2006
-------- -------- -------- --------
Net income $ 32,476 $ 40,477 $ 42,208 $ 53,616
(Gain) Loss on sale of assets (21,590) (28,108) (21,590) (28,108)
GAAP income from
non-consolidated REITs 142 (156) 725 (431)
Distributions from
non-consolidated REITs 442 491 723 609
Depreciation of real estate &
intangible amortization 8,508 7,513 17,507 14,646
Straight-line rent (776) (139) (2,049) 61
-------- -------- -------- --------
Adjusted Funds From Operations
(AFFO) 19,202 20,078 37,524 40,393
Plus gains on sales of assets 21,590 28,108 21,590 28,108
-------- -------- -------- --------
AFFO+GOS $ 40,792 $ 48,186 $ 59,114 $ 68,501
======== ======== ======== ========
Per Share Data
EPS $ 0.46 $ 0.60 $ 0.60 $ 0.84
AFFO $ 0.27 $ 0.30 $ 0.53 $ 0.64
AFFO+GOS $ 0.58 $ 0.72 $ 0.84 $ 1.08
Weighted average shares (basic and
diluted) 70,766 67,149 70,766 63,492
======== ======== ======== ========
Today's news release, along with other news about Franklin Street
Properties Corp., is available on the Internet at
www.franklinstreetproperties.com.
A conference call is scheduled for August 1, 2007 at 10:00 a.m. (ET) to
discuss the second quarter 2007 results. The toll free number is
1-800-638-4817, passcode 81640679. Internationally, the call may be
accessed by dialing 1-617-614-3943, passcode 81640679. The call will also
be available via a live webcast, which can be accessed at least 10 minutes
before the start time through the Webcasts & Presentations section of our
Investor Relations section at www.franklinstreetproperties.com. A replay
of the conference call will be available on the Company's website one hour
after the call.
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. FSP operates in two business
segments: real estate operations and investment banking/investment
services. FSP owns an unleveraged portfolio of real estate. The majority
of FSP's property portfolio is suburban office buildings. FSP's
subsidiary, FSP Investments LLC (member, NASD and SIPC), is a real estate
investment banking firm and a registered broker/dealer. FSP is a Maryland
corporation that operates in a manner intended to qualify as a 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 are
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 changes in economic conditions in
the markets in which we own properties, changes in the demand by investors
for investment in Sponsored REITs (as defined in our Annual Report on Form
10-K for the year ended December 31, 2006), risks of a lessening of demand
for the types of real estate owned by us, changes in government
regulations, 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 Item 1A of our Annual Report on Form 10-K for
the year ended December 31, 2006, as the same may be updated from time to
time in subsequent filings with the 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. Financial Results
Supplementary Schedule A
Consolidated Income Statement
(Unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
(in thousands, except per share
amounts) 2007 2006 2007 2006
======== ========= ======== =========
Revenue:
Rental $ 23,201 $ 17,940 $ 48,606 $ 37,815
Related party revenue:
Syndication fees 3,448 3,505 6,403 5,426
Transaction fees 3,761 3,469 6,842 5,408
Management fees and interest
income from loans 1,862 698 3,679 869
Other 9 1 47 22
-------- --------- -------- ---------
Total revenue 32,281 25,613 65,577 49,540
-------- --------- -------- ---------
Expenses:
Real estate operating expenses 5,771 4,110 12,076 7,903
Real estate taxes and insurance 4,039 2,993 8,327 5,199
Depreciation and amortization 6,889 4,782 14,172 9,197
Selling, general and
administrative 2,000 1,954 3,888 3,758
Commissions 1,754 1,809 3,313 2,832
Interest 1,622 546 4,298 1,140
-------- --------- -------- ---------
Total expenses 22,075 16,194 46,074 30,029
-------- --------- -------- ---------
Income before interest income,
equity in earnings of
non-consolidated REITs and taxes
on income 10,206 9,419 19,503 19,511
Interest income 560 756 1,213 1,345
Equity in earnings (deficit) of
non-consolidated REITs (142) 156 (758) 236
-------- --------- -------- ---------
Income before taxes on income 10,624 10,331 19,958 21,092
Income tax expense 373 347 613 404
-------- --------- -------- ---------
Income from continuing
operations 10,251 9,984 19,345 20,688
Income from discontinued
operations 635 2,385 1,273 4,820
Gain on sale of assets 21,590 28,108 21,590 28,108
-------- --------- -------- ---------
Net income $ 32,476 $ 40,477 $ 42,208 $ 53,616
======== ========= ======== =========
Weighted average number of shares
outstanding, basic and diluted 70,766 67,149 70,766 63,492
======== ========= ======== =========
Earnings per share, basic and
diluted, attributable to:
Continuing operations $ 0.14 $ 0.15 $ 0.27 $ 0.33
Discontinued operations 0.01 0.03 0.02 0.07
Gains on sales of assets 0.31 0.42 0.31 0.44
-------- --------- -------- ---------
Net income per share, basic and
diluted $ 0.46 $ 0.60 $ 0.60 $ 0.84
======== ========= ======== =========
Franklin Street Properties Corp. Financial Results
Supplementary Schedule B
Condensed Consolidated Balance Sheet
(Unaudited)
(in thousands, except share and par value June 30, December 31,
amounts) 2007 2006
============= =============
Assets:
Real estate assets, net $ 805,035 $ 750,158
Acquired real estate leases, less
accumulated amortization of $25,890
and $20,345, respectively 39,998 40,577
Investment in non-consolidated REITs 4,959 5,064
Assets held for syndication, net 77,645 -
Assets held for sale 8,938 62,174
Cash and cash equivalents 107,600 69,973
Certificate of deposit - 5,143
Restricted cash 682 761
Tenant rent receivables, less allowance for
doubtful accounts of $355 and $433, respectively 2,106 2,440
Straight-line rent receivable, less
allowance for doubtful accounts of $163 and
$163, respectively 6,288 4,346
Prepaid expenses 917 972
Deposits on real estate assets - 5,010
Other assets 294 1,118
Office computers and furniture, net of
accumulated depreciation of $912 and
$851, respectively 360 375
Deferred leasing commissions, net of
accumulated amortization of $1,935,
and $1,313, respectively 8,428 7,206
------------- -------------
Total assets $ 1,063,250 $ 955,317
============= =============
Liabilities and Stockholders' Equity:
Liabilities:
Bank note payable $ 119,750 $ -
Accounts payable and accrued expenses 15,648 25,275
Accrued compensation 917 2,643
Tenant security deposits 1,783 1,744
Acquired unfavorable real estate leases,
less accumulated amortization of $852,
and $534, respectively 4,857 3,693
------------- -------------
Total liabilities 142,955 33,355
------------- -------------
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,
70,766,305 and 70,766,305 shares issued
and outstanding, respectively 7 7
Additional paid-in capital 907,794 907,794
Treasury stock, 731,898 and 731,898
shares at cost, respectively (14,008) (14,008)
Earnings (distributions) in excess of
accumulated earnings/distributions 26,502 28,169
------------- -------------
Total stockholders' equity 920,295 921,962
------------- -------------
Total liabilities and stockholders'
equity $ 1,063,250 $ 955,317
============= =============
Franklin Street Properties Corp. Financial Results
Supplementary Schedule C
Consolidated Statement of Cash Flows
(Unaudited)
For the
Six Months Ended
June 30,
-----------------------
(in thousands) 2007 2006
========== ==========
Cash flows from operating activities:
Net income $ 42,208 $ 53,616
Adjustments to reconcile net income to net cash
provided by operating activities:
(Gains) on assets sold (21,590) (28,108)
Depreciation and amortization expense 14,938 11,407
Amortization of above market lease 2,569 3,240
Equity in earnings (deficit) from
non-consolidated REITs 725 (431)
Distributions from non-consolidated REITs 723 609
Changes in operating assets and liabilities:
Restricted cash 79 (5)
Tenant rent receivables, net 334 855
Straight-line rents, net (2,049) 61
Prepaid expenses and other assets, net 861 1,232
Accounts payable and accrued expenses (2,074) (1,226)
Accrued compensation (1,726) (590)
Tenant security deposits 39 186
Payment of deferred leasing commissions (2,669) (2,773)
---------- ----------
Net cash provided by operating activities 32,368 38,073
---------- ----------
Cash flows from investing activities:
Cash acquired through issuance of common stock
in merger transaction - 13,849
Purchase of real estate assets, office
computers and furniture, capitalized merger costs (72,416) (108,280)
Merger costs paid - (838)
Purchase of acquired favorable and unfavorable
leases (3,726) (5,108)
Investment in non-consolidated REITs (9) (11)
Investment in certificate of deposit 5,143 -
Investment in assets held for syndication, net (74,420) (9,545)
Proceeds received on sales of real estate assets 74,812 87,750
---------- ----------
Net cash used for investing activities (70,616) (22,183)
---------- ----------
Cash flows from financing activities:
Distributions to stockholders (43,875) (37,073)
Offering costs - (119)
Borrowings under bank note payable, net 119,750 9,192
---------- ----------
Net cash provided by (used for) financing
activities 75,875 (28,000)
---------- ----------
Net increase (decrease) in cash and cash
equivalents 37,627 (12,110)
Cash and cash equivalents, beginning of period 69,973 69,715
---------- ----------
Cash and cash equivalents, end of period $ 107,600 $ 57,605
========== ==========
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule D
Real Estate Portfolio Summary
(Unaudited)
June 30, 2007
As of June 30,
--------------------
2007 2006
--------- ---------
Commercial real estate*
Number of properties 27 25
Square feet 5,066,813 4,499,407
Leased percentage 88% 94%
* Excludes assets held for sale or sold
(In Thousands) As of June 30, 2007*
-----------------------------------------------------
# of % of Square % of
State Properties Investment Portfolio Feet Portfolio
---------- ---------- --------- ---------- --------
Texas 7 $ 216,134 27.0% 1,401 27.6%
Colorado 4 132,145 16.5% 791 15.6%
Georgia 1 79,914 9.9% 387 7.6%
Maryland 2 65,051 8.1% 425 8.5%
Virginia 2 64,675 8.0% 433 8.5%
Missouri 2 58,745 7.3% 349 6.9%
Florida 1 51,050 6.3% 213 4.2%
California 2 20,468 2.5% 182 3.6%
Indiana 1 38,786 4.8% 205 4.0%
Illinois 1 33,324 4.1% 177 3.6%
Michigan 1 15,396 1.9% 215 4.2%
North Carolina 2 14,877 1.8% 172 3.4%
Washington 1 14,470 1.8% 117 2.3%
---------- ---------- --------- ---------- --------
Total 27 $ 805,035 100.0% 5,067 100.0%
========== ========== ========= ========== ========
* Excludes property held for sale
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule E
(Unaudited)
June 30, 2007
Property by type:
(dollars & square
feet in 000's) As of June 30, 2007*
# of % of Square % of
Type Properties Investment Portfolio Feet Portfolio
---------- ---------- --------- ---------- --------
Office 26 $ 799,717 99.3% 4,968 98.1%
Industrial 1 5,318 0.7% 99 1.9%
---------- ---------- --------- ---------- --------
Total 27 $ 805,035 100.0% 5,067 100.0%
========== ========== ========= ========== ========
* Excludes property held for sale
Commercial portfolio lease expirations (1)
Total % of
Year Square Feet Portfolio
----------- ----------
2007 98,878 2.0%
2008 279,488 5.5%
2009 658,910 13.0%
2010 784,054 15.5%
2011 349,531 6.9%
2012 538,435 10.6%
Thereafter 2,357,517 46.5%(2)
----------- ----------
5,066,813 100.0%
=========== ==========
(1) Percentages are determined based upon square footage of expiring
commercial leases and exclude assets held for sale.
(2) Includes 587,000 square feet of current vacancies.
Capital Expenditures Three Months Ended Six Months Ended
(in thousands) ---------------------- ----------------------
30-Jun-07 30-Jun-06 30-Jun-07 30-Jun-06
---------- ---------- ---------- ----------
Tenant improvements $ 869 $ 1,344 $ 3,173 $ 1,567
Deferred leasing costs 2,008 2,617 2,669 2,772
Building improvements 1,324 172 1,875 218
---------- ---------- ---------- ----------
$ 4,201 $ 4,133 $ 7,717 $ 4,557
========== ========== ========== ==========
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule F: Quarterly information for 2007 and 2006
(Unaudited)
(in thousands) Q1 Q2 Q1 Q2 Q3 Q4
Revenue: 2007 2007 2006 2006 2006 2006
-------- -------- -------- -------- -------- --------
Rental $ 25,405 $ 23,201 $ 19,875 $ 17,940 $ 23,833 $ 22,715
Related
party revenue:
Syndication fees 2,955 3,448 1,921 3,505 861 4,405
Transaction
fees 3,081 3,761 1,939 3,469 1,140 4,714
Management fees
and interest
income from
loans 1,817 1,862 171 698 209 1,005
Other 38 9 21 1 2 36
-------- -------- -------- -------- -------- --------
Total revenue 33,296 32,281 23,927 25,613 26,045 32,875
-------- -------- -------- -------- -------- --------
Expenses:
Real estate
operating
expenses 6,305 5,771 3,793 4,110 5,469 6,114
Real estate
taxes and
insurance 4,288 4,039 2,206 2,993 3,750 3,519
Depreciation
and
amortization 7,283 6,889 4,415 4,782 6,016 6,114
Selling, general
and
administrative 1,888 2,000 1,804 1,954 2,027 2,733
Commissions 1,559 1,754 1,023 1,809 458 2,233
Interest 2,676 1,622 594 546 119 1,190
-------- -------- -------- -------- -------- --------
Total expenses 23,999 22,075 13,835 16,194 17,839 21,903
-------- -------- -------- -------- -------- --------
Income before
interest income,
equity (deficit)
in earnings in
non-consolidated
REITs 9,297 10,206 10,092 9,419 8,206 10,972
Interest income 653 560 589 756 735 918
Equity in earnings
(deficit) in
non-consolidated
REITs (616) (142) 80 156 481 128
-------- -------- -------- -------- -------- --------
Income before
taxes on
income 9,334 10,624 10,761 10,331 9,422 12,018
Taxes on income 240 373 57 347 (131) 567
-------- -------- -------- -------- -------- --------
Income from
continuing
operations 9,094 10,251 10,704 9,984 9,553 11,451
Income from
discontinued
operations 638 635 2,435 2,385 1,916 1,063
-------- -------- -------- -------- -------- --------
Income before
gain on sale
of properties 9,732 10,886 13,139 12,369 11,469 12,514
Gain on sale of
assets - 21,590 - 28,108 6,361 26,969
-------- -------- -------- -------- -------- --------
Net income $ 9,732 $ 32,476 $ 13,139 $ 40,477 $ 17,830 $ 39,483
======== ======== ======== ======== ======== ========
AFFO and
AFFO+GOS
calculations:
Net income $ 9,732 $ 32,476 $ 13,139 $ 40,477 $ 17,830 $ 39,483
-------- -------- -------- -------- -------- --------
(Gain) on
sale of
assets - (21,590) - (28,108) (6,361) (26,969)
GAAP income
from non-
consolidated
REITs 583 142 (275) (156) (481) (131)
Distributions
from non-
consolidated
REITs 281 442 118 491 115 59
Depreciation &
amortization 9,000 8,508 7,133 7,513 8,760 8,684
Straight-line
rent (1,273) (776) 200 (139) (590) (805)
-------- -------- -------- -------- -------- --------
Adjusted Funds
From Operations
(AFFO) 18,323 19,202 20,315 20,078 19,273 20,321
Plus gains on
sales of assets - 21,590 - 28,108 6,361 26,969
-------- -------- -------- -------- -------- --------
AFFO+GOS $ 18,323 $ 40,792 $ 20,315 $ 48,186 $ 25,634 $ 47,290
======== ======== ======== ======== ======== ========
Franklin Street Properties Corp. Earnings Release
Supplementary Schedule G
Definition of Adjusted Funds From Operations ("AFFO"),
and AFFO plus Gains on Sales ("AFFO+GOS")
The Company evaluates the performance of its reportable segments based on
several measures including, Adjusted Funds From Operations ("AFFO") and
AFFO plus Gains on Sales ("AFFO+GOS") as management believes they represent
important measures of activity and are an important consideration in
determining distributions paid to equity holders. The Company defines AFFO
as: Net Income as computed in accordance with accounting principles
generally accepted in the United States of America ("GAAP"); excluding
gains or losses on the sale of real estate and non-cash income from
Sponsored REITs; plus certain non-cash items included in the computation of
Net Income (depreciation and amortization and straight-line rent
adjustments); plus distributions received from Sponsored REITs; plus the
net proceeds from the sale of land; Depreciation and amortization, gain or
loss on the sale of real estate and straight-line rents are an adjustment
to AFFO, as these are non-cash items included in Net Income. The Company
defines AFFO+GOS as AFFO as defined above, plus gains and losses on sales
of properties and provisions for assets held for sale.
AFFO and AFFO+GOS should not be considered as alternatives to Net Income
(determined in accordance with GAAP), as indicators of the Company's
financial performance, as alternatives to cash flows from operating
activities (determined in accordance with GAAP), or as measures of the
Company's liquidity, or 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, AFFO and
AFFO+GOS should be examined in connection with Net Income and cash flows
from operating, investing and financing activities in the consolidated
financial statements.
Contact:
Donna Brownell
877-686-9496
www.franklinstreetproperties.com