FSP Franklin Street Properties Corp

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 $27.0 million or $0.27 per share for the third quarter ended September 30, 2015; and net income of $3.2 million or $0.03 per share for the third quarter ended September 30, 2015.

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 September 30, Nine Months Ended September 30,

(in 000's except pershare data)

2015

2014

Increase(Decrease)

2015

2014

Increase(Decrease)

  Net Income $ 3,166     $ 1,567 $ 1,599   $ 19,602     $ 8,853 $ 10,749     FFO $ 26,954     $ 27,904 $ (950 ) $ 79,814     $ 84,937 $ (5,123 ) Per Share Data: EPS $ 0.03 $ 0.02 $ 0.01 $ 0.20 $ 0.09 $ 0.11 FFO $ 0.27 $ 0.28 $ (0.01 ) $ 0.80 $ 0.85 $ (0.05 )   Weighted average shares (diluted)   100,187       100,187   -     100,187       100,187   -    

Comparing results for the third quarter of 2015 to the same period in 2014, FFO decreased $0.9 million or $0.01 per share to $27.0 million or $0.27 per share in 2015. The FFO decrease was primarily from lower property income as a result of asset sales, loan repayments achieved in the last twelve months and lower occupancy, which was partially offset as a result of the acquisition of a property on April 8, 2015. Net Income and EPS was $3.2 million and $0.03 per share for the third quarter of 2015, respectively, compared to a net income of $1.6 million and EPS of $0.02 per share for the third quarter of 2014.

Comparing results for the nine months ended September 30, 2015 to the same period in 2014, FFO decreased $5.1 million or $0.05 per share to $79.8 million or $0.80 per share. The FFO decrease was primarily from lower property income as a result of asset sales and loan repayments achieved in the last twelve months and from lower occupancy, which was partially offset as a result of the acquisition of a property on April 8, 2015. We recorded an $11.4 million gain on the sale of three properties during the nine months ended September 30, 2015. Net Income and EPS was $19.6 million and $0.20 per share for the nine months ended September 30, 2015, respectively, compared to Net Income of $8.9 million or $0.09 per share for the nine months ended September 30, 2014.

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

“For the third quarter of 2015, FSP’s profits as represented by FFO totaled approximately $27.0 million, or $0.27 per share. Our directly owned real estate portfolio of 36 properties totaling approximately 9.6 million square feet was 90.5% leased as of September 30, 2015. We are updating our full-year 2015 FFO guidance to the range of $1.05 to $1.07 per share.

FSP continued efforts to transform its portfolio into one characterized by urban-infill assets within our top five core markets of Atlanta, Dallas, Denver, Houston and Minneapolis. To that end, we remain focused on our strategy of disposing of non-core assets throughout the portfolio with emphasis on selling suburban commodity/legacy assets both inside and outside of our five core markets. FSP is actively working on a number of potential dispositions and potential loan repayment transactions which, if consummated, would slightly expand our total potential disposition/loan repayment guidance range to between $150 and $225 million, including the approximately $57 million achieved so far this year. A number of these in-process dispositions are still subject to their respective due diligence inspection periods and/or other transaction specific uncertainties, and so execution risks remain. The timing of potential dispositions/loan repayments could spill into 2016 and we will keep the market informed as transaction clarity emerges.

Balancing the timing of potential new acquisition/development opportunities with potential dispositions continues to be challenging. Repositioning our portfolio without incurring bridge financing indebtedness, which we believe would raise our corporate risk profile above levels that we are comfortable with, continues to be a significant timing exercise in our capital recycling efforts. Currently, we have a pipeline of potential acquisitions that are receiving our full focus. Our prior potential acquisition guidance had been between $150 and $300 million and we are maintaining that guidance at this time. We will continue to manage disposition timing as best as possible to match-fund against new potential acquisitions. New acquisitions may occur prior to year-end or spill into the new-year. We will keep the market informed as transaction clarity emerges.

Additionally, we have made progress on a redevelopment plan for our CBD Minneapolis, Minnesota property located at 801 Marquette Avenue. Although subject to change, FSP currently contemplates co-developing an approximately 50-story, mixed-use tower that would include a full-service hotel, residential apartments and office space. Under the current plan, FSP would contribute the land and approximately $80 to $90 million in additional capital costs for 100% ownership of the office portion of the project, which is tentatively slated to be approximately 260,000 rentable square feet in the middle of the tower stack. FSP is working with a residential group and hotel company to further evaluate the project. Final costing and development agreements have yet to be concluded and are fully subject to change and/or cancellation. If successful in the costing and pre-development work ahead, we intend to break ground on the project sometime during the second half of 2016. Significant thought and design are being incorporated into the redevelopment of 801 Marquette Avenue in order to integrate it with and enhance the appeal of its next-door neighbor office building, FSP’s tower at 121 South Eighth Street.

We remain very positive about our prospects and opportunities for the balance of the current year and 2016.”

Dividend Update

On October 9, 2015, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended September 30, 2015 of $0.19 per share of common stock that will be paid on November 12, 2015 to stockholders of record on October 23, 2015.

FFO Guidance

Our full year FFO guidance for 2015 has been updated to be in the range of $1.05 to $1.07 per diluted share. This guidance (a) excludes the impact of future acquisitions, developments, 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. 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 September 30, 2015. 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. Management also believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. 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

Nine Months Ended

September 30,

September 30,

(In thousands, except per share amounts)

2015

2014

2015

2014

  Net income $ 3,166 $ 1,567 $ 19,602 $ 8,853 Gain on sale of assets, less applicable income tax (1 ) - (11,411 ) - GAAP loss from non-consolidated REITs 284 455 644 1,491 FFO from non-consolidated REITs 645 508 2,131 1,278 Depreciation & amortization   22,848       25,374   68,694       73,301 NAREIT FFO 26,942 27,904 79,660 84,923 Acquisition costs of new properties   12       -   154       14 Funds From Operations (FFO) $ 26,954     $ 27,904 $ 79,814     $ 84,937   Per Share Data EPS $ 0.03 $ 0.02 $ 0.20 $ 0.09 FFO $ 0.27 $ 0.28 $ 0.80 $ 0.85   Weighted average shares (basic and diluted)   100,187       100,187   100,187       100,187  

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 October 28, 2015 at 9:00 a.m. (ET) to discuss the third quarter 2015 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, 2014, 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 the

Three Months Ended

September 30,

    For the

Nine Months Ended

September 30,

(in thousands, except per share amounts)           2015       2014         2015       2014   Revenue:     Rental $ 60,386 $ 59,728 $ 178,200 $ 182,319 Related party revenue: Management fees and interest income from loans 1,470 1,462 4,355 4,776 Other           21       -         62       99   Total revenue           61,877       61,190         182,617       187,194   Expenses: Real estate operating expenses 15,951 15,632 45,951 45,698 Real estate taxes and insurance 9,941 8,555 29,458 27,569 Depreciation and amortization 22,911 24,878 68,790 72,741 Selling, general and administrative 3,071 3,071 10,163 9,491 Interest           6,425       6,883         18,977       20,950   Total expenses           58,299       59,019         173,339       176,449   Income before interest income, equity in losses of non-consolidated REITs and taxes 3,578 2,171 9,278 10,745 Interest income - - 1 2 Equity in losses of non-consolidated REITs (284 ) (455 ) (644 ) (1,491 ) Gain on sale of properties, less applicable income tax           1       -         11,411       -   Income before taxes on income 3,295 1,716 20,046 9,256 Taxes on income           129       149         444       403   Net income         $ 3,166     $ 1,567       $ 19,602     $ 8,853     Weighted average number of shares outstanding, basic and diluted           100,187       100,187         100,187       100,187     Earnings per share, basic and diluted: Net income per share, basic and diluted         $ 0.03     $ 0.02       $ 0.20     $ 0.09                

Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

  September 30, December 31, (in thousands, except share and par value amounts)           2015         2014   Assets: Real estate assets: Land $ 180,271 $ 183,930 Buildings and improvements 1,639,869 1,604,984 Fixtures and equipment           1,882         1,677   1,822,022 1,790,591 Less accumulated depreciation           291,331         266,284   Real estate assets, net 1,530,691 1,524,307 Acquired real estate leases, less accumulated amortization of $116,711 and $101,838, respectively 117,272 138,714 Investment in non-consolidated REITs 77,853 78,611 Cash and cash equivalents 19,100 7,519 Restricted cash 34 742 Tenant rent receivables, less allowance for doubtful accounts of $200 and $325, respectively 3,548 4,733 Straight-line rent receivable, less allowance for doubtful accounts of $50 and $162, respectively 47,330 47,021 Prepaid expenses and other assets 9,773 10,292 Related party mortgage loan receivables 93,641 93,641 Other assets: derivative asset - 3,020 Office computers and furniture, net of accumulated depreciation of $1,261 and $1,036, respectively 551 609 Deferred leasing commissions, net of accumulated amortization of $19,294 and $16,944, respectively           26,587         27,181   Total assets         $ 1,926,380       $ 1,936,390     Liabilities and Stockholders’ Equity: Liabilities: Bank note payable $ 300,000 $ 268,000 Term loans payable 620,000 620,000 Accounts payable and accrued expenses 42,164 42,561 Accrued compensation 3,236 3,758 Tenant security deposits 4,349 4,248 Other liabilities: derivative liability 12,096 7,268 Acquired unfavorable real estate leases, less accumulated amortization of $10,504 and $8,687, respectively           10,241         10,908   Total liabilities           992,086         956,743     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 loss (12,096 ) (4,248 ) Accumulated distributions in excess of accumulated earnings           (327,176 )       (289,671 ) Total stockholders’ equity           934,294         979,647   Total liabilities and stockholders’ equity         $ 1,926,380       $ 1,936,390            

Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

  For the

Nine Months Ended

September 30,

(in thousands)         2015     2014 Cash flows from operating activities:     Net income $ 19,602 $ 8,853 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 70,340 74,237 Amortization of above market lease (96) 560 Equity in losses of non-consolidated REITs 644 1,491 Gain on sale of properties, less applicable income tax (11,411) - Increase (decrease) in allowance for doubtful accounts (125) 125 Changes in operating assets and liabilities: Restricted cash 708 (64) Tenant rent receivables 1,310 2,112 Straight-line rents (1,573) (4,038) Lease acquisition costs (463) (438) Prepaid expenses and other assets (997) (106) Accounts payable, accrued expenses and other items (603) (2,133) Accrued compensation (522) (122) Tenant security deposits 101 304 Payment of deferred leasing commissions           (4,254)       (4,854) Net cash provided by operating activities           72,661       75,927 Cash flows from investing activities: Property acquisitions (66,104) - Acquired real estate leases (10,604) - Property improvements, fixtures and equipment (15,005) (12,403) Distributions in excess of earnings from non-consolidated REITs 81 81 Repayment of related party mortgage loan receivable - 13,880 Investment in related party mortgage loan receivable - (2,570) Proceeds received on sales of real estate assets           55,659       - Net cash used in investing activities           (35,973)       (1,012) Cash flows from financing activities: Distributions to stockholders (57,107) (57,108) Borrowings under bank note payable 95,000 10,000 Repayments of bank note payable           (63,000)       (31,500) Net cash used in financing activities           (25,107)       (78,608) Net increase in cash and cash equivalents 11,581 (3,693) Cash and cash equivalents, beginning of year           7,519       19,623 Cash and cash equivalents, end of period         $ 19,100     $ 15,930    

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

2015 69,019 0.7% 2016 1,005,764 10.4% 2017 1,119,778 11.6% 2018 996,420 10.3% 2019 1,473,328 15.3% Thereafter (2) 4,976,595     51.7% 9,640,904     100.0%

(1) Percentages are determined based upon total square footage.(2) Includes 915,234 square feet of current vacancies.

        (dollars & square feet in 000's) As of September 30, 2015 # of         % of         Square     % of

State

Properties

Investment

Portfolio

Feet

Portfolio

  Texas 9 $ 367,987 24.0 % 2,418 25.1 % Colorado 5 431,870 28.2 % 2,010 20.8 % Georgia 4 285,408 18.6 % 1,838 19.1 % Virginia 4 94,528 6.2 % 685 7.1 % Minnesota 1 29,957 2.0 % 475 4.9 % Missouri 3 60,626 4.0 % 478 5.0 % North Carolina 2 55,570 3.6 % 322 3.3 % Illinois 2 44,909 2.9 % 372 3.9 % Maryland 1 51,553 3.4 % 326 3.4 % Florida 1 42,266 2.8 % 213 2.2 % Indiana 1 31,890 2.1 % 205 2.1 % California 2 20,560 1.3 % 182 1.9 % Washington 1       13,567     0.9 % 117     1.2 % 36     $ 1,530,691     100.0 % 9,641     100.0 %                          

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

  Recurring Capital Expenditures Owned Portfolio For the Nine (in thousands) For the Three Months Ended Months Ended

31-Mar-15

30-Jun-15

30-Sep-15

30-Sep-15

  Tenant improvements $ 2,936 $ 3,420 $ 1,794 $ 8,150 Deferred leasing costs 830 1,539 1,490 3,859 Non-investment capex   643   1,418   1,090   3,151 $ 4,409 $ 6,377 $ 4,374 $ 15,160   For the Three Months Ended: Year ended

31-Mar-14

30-Jun-14

30-Sep-14

31-Dec-14

31-Dec-14

  Tenant improvements $ 1,132 $ 1,837 $ 2,612 $ 4,244 $ 9,825 Deferred leasing costs 1,080 2,786 577 1,405 5,848 Non-investment capex   364   1,621   700   851   3,536 $ 2,576 $ 6,244 $ 3,889 $ 6,500 $ 19,209               Square foot & leased percentages September 30, December 31,   2015 2014   Owned portfolio of commercial real estate Number of properties 36 38 Square feet 9,640,904 9,580,057 Leased percentage 90.5% 92.8%   Investments in non-consolidated REITs Number of properties 2 2 Square feet 1,396,071 1,395,780 Leased percentage 71.2% 71.3%   Single Asset REITs (SARs) managed Number of properties 7 8 Square feet 1,487,026 1,897,801 Leased percentage 77.0% 84.7%   Total owned, investments & managed properties Number of properties 45 48 Square feet 12,524,001 12,873,638 Leased percentage 86.8% 89.3%  

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

                        Square % Leased % Interest

Single Asset REIT name

City

State

Feet

30-Sep-15

Held

FSP 303 East Wacker Drive Corp. Chicago IL 861,000 60.6 % 43.7 % FSP Grand Boulevard Corp. Kansas City MO 535,071     88.4 % 27.0 % 1,396,071     71.2 %                              

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F

Percentage of Leased Space

(Unaudited & Estimated)

  as of Average % as of Average %

Property Name

Location

Square Feet

30-Jun-15

Leased (2)

30-Sep-15

Leased (2)

  1 HILLVIEW CENTER Milpitas, CA 36,288 100.0% 100.0% 100.0% 100.0% 2 FOREST PARK Charlotte, NC 62,212 100.0% 100.0% 100.0% 100.0% 3 MEADOW POINT Chantilly, VA 138,537 100.0% 100.0% 100.0% 100.0% 4 TIMBERLAKE Chesterfield, MO 234,023 93.8% 60.4% 93.8% 93.8% 5 FEDERAL WAY Federal Way, WA 117,010 58.9% 58.9% 58.9% 58.9% 6 NORTHWEST POINT Elk Grove Village, IL 176,848 100.0% 100.0% 100.0% 100.0% 7 TIMBERLAKE EAST Chesterfield, MO 116,197 43.7% 43.5% 43.7% 43.7% 8 PARK TEN Houston, TX 157,460 63.1% 63.1% 63.1% 63.1% 9 MONTAGUE San Jose, CA 145,951 81.1% 81.1% 81.1% 81.1% 10 ADDISON Addison, TX 290,041 91.6% 88.6% 93.4% 92.8% 11 COLLINS CROSSING Richardson, TX 300,887 100.0% 99.7% 100.0% 100.0% 12 GREENWOOD PLAZA Englewood, CO 196,236 100.0% 100.0% 100.0% 100.0% 13 RIVER CROSSING Indianapolis, IN 205,059 90.6% 93.7% 90.6% 90.6% 14 LIBERTY PLAZA Addison, TX 218,934 84.2% 86.3% 82.5% 82.5% 15 INNSBROOK Glen Allen, VA 298,456 99.9% 99.9% 99.9% 99.9% 16 380 INTERLOCKEN Broomfield, CO 240,185 97.1% 96.7% 97.1% 97.1% 17 BLUE LAGOON Miami, FLA 212,619 100.0% 100.0% 100.0% 100.0% 18 ELDRIDGE GREEN Houston, TX 248,399 100.0% 100.0% 100.0% 100.0% 19 ONE OVERTON PARK Atlanta, GA 387,267 84.5% 83.8% 85.0% 84.5% 20 390 INTERLOCKEN Broomfield, CO 241,516 72.3% 72.3% 85.3% 81.0% 21 EAST BALTIMORE Baltimore, MD 325,445 81.3% 81.3% 85.4% 84.7% 22 PARK TEN PHASE II Houston, TX 156,746 100.0% 100.0% 100.0% 100.0% 23 LAKESIDE CROSSING I Maryland Heights, MO 127,778 100.0% 100.0% 100.0% 100.0% 24 LOUDOUN TECH Dulles, VA 136,658 92.0% 92.0% 92.0% 92.0% 25 4807 STONECROFT Chantilly, VA 111,469 100.0% 100.0% 100.0% 100.0% 26 121 SOUTH EIGHTH ST Minneapolis, MN 475,694 90.2% 90.2% 90.8% 90.1% 27 EMPEROR BOULEVARD Durham, NC 259,531 100.0% 100.0% 100.0% 100.0% 28 LEGACY TENNYSON CTR Plano, TX 202,600 100.0% 100.0% 100.0% 100.0% 29 ONE LEGACY Plano, TX 214,110 100.0% 100.0% 100.0% 100.0% 30 909 DAVIS Evanston, IL 195,245 100.0% 99.7% 100.0% 100.0% 31 ONE RAVINIA DRIVE Atlanta, GA 386,603 95.2% 95.2% 94.8% 94.8% 32 TWO RAVINIA Atlanta, GA 442,130 77.5% 77.5% 77.4% 76.9% 33 WESTCHASE I & II Houston, TX 629,025 95.9% 95.9% 90.2% 90.2% 34 1999 BROADWAY Denver, CO 676,379 86.2% 86.7% 82.5% 85.1% 35 999 PEACHTREE Atlanta, GA 621,946 95.1% 96.0% 94.7% 94.7% 36 1001 17th STREET Denver, CO 655,420     86.3%     86.5%     86.3%     86.3% TOTAL WEIGHTED AVERAGE

9,640,904

    90.6%     89.9%     90.5%     90.5%  

(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 total square feet:

  As of September 30, 2015 % of

Tenant

Sq Ft

Portfolio

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 Newfield Exploration Company 234,495 2.4 % 5 US Government 223,433 2.3 % 6 Sutherland Asbill Brennan LLP 222,422 2.3 % 7 Burger King Corporation 212,619 2.2 % 8 Denbury Onshore, LLC 202,600 2.1 % 9 SunTrust Bank 182,888 1.9 % 10 Citicorp Credit Services, Inc 176,848 1.8 % 11 T-Mobile South, LLC dba T-Mobile 151,792 1.6 % 12 Houghton Mifflin Harcourt Publishing Company 150,050 1.6 % 13 Petrobras America, Inc. 144,813 1.5 % 14 Murphy Exploration & Production Company 144,677 1.5 % 15 Argo Data Resource Corporation 140,246 1.5 % 16 Monsanto Company 127,778 1.3 % 17 Federal National Mortgage Association 123,144 1.3 % 18 Vail Corp d/b/a Vail Resorts 122,232 1.3 % 19 Kaiser Foundation Health Plan 120,979 1.3 % 20 Centene Management Company, LLC 117,618     1.2 % Total 3,569,675     37.1 %  

Franklin Street Properties Corp. Earnings ReleaseSupplementary Schedule HDefinition 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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151027006796/en/

Franklin Street Properties CorpGeorgia Touma, 877-686-9496