SOURCE: Franklin Street Properties Corp.

November 03, 2009 17:56 ET

Franklin Street Properties Corp. Announces Third Quarter 2009 Results

WAKEFIELD, MA--(Marketwire - November 3, 2009) - Franklin Street Properties Corp. (the "Company" or "FSP") (NYSE Amex: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $17.5 million or $0.25 per share for the third quarter ended September 30, 2009, which was sequentially flat compared to the second quarter of 2009. The Company also announced Net Income of $6.9 million and Earnings Per Share (EPS) of $0.10 for the third quarter ended September 30, 2009.

The Company evaluates its performance based on Net Income, EPS, FFO, Gains on Sales (GOS) and FFO+GOS, and believes each is an important measure. A reconciliation of Net Income to FFO and FFO+GOS, which are non-GAAP financial measures, is provided on page 4 of this press release.

           Three Months Ended September 30, Nine Months Ended September 30,
           -------------------------------  ------------------------------
(in 000's
 except
 per share                       Increase                        Increase
 data)        2009      2008    (Decrease)    2009      2008    (Decrease)
            --------- --------- ----------  --------- --------- ----------

Net Income  $   6,941 $   7,419 $     (478) $  19,614 $  25,340 $   (5,726)
            ========= ========= ==========  ========= ========= ==========

FFO         $  17,537 $  17,085 $      452  $  52,284 $  53,005 $     (721)
GOS                 -         -          -          -         -          -
            --------- --------- ----------  --------- --------- ----------
FFO+GOS     $  17,537 $  17,085 $      452  $  52,284 $  53,005 $     (721)
            ========= ========= ==========  ========= ========= ==========
Per Share
 Data:
EPS         $    0.10 $    0.11 $    (0.01) $    0.28 $    0.36 $    (0.08)
FFO         $    0.25 $    0.24 $     0.01  $    0.74 $    0.75 $    (0.01)
GOS         $       - $       - $        -  $       - $       - $        -
FFO+GOS     $    0.25 $    0.24 $     0.01  $    0.74 $    0.75 $    (0.01)

Weighted
 average
 shares
 (diluted)     71,281    70,481        800     70,750    70,481        269
            --------- --------- ----------  --------- --------- ----------

Comparing results for the third quarter of 2009 to 2008, Net Income and EPS decreased $0.5 million or $0.01 per share; and FFO and FFO+GOS each increased $0.5 million or $0.01 per share. The increase in FFO was primarily from an increase in real estate FFO of $0.8 million and a decrease in investment banking FFO of $0.4 million. The decrease from investment banking was caused by lower sales of securities by our investment bank, which were $4.8 million in the third quarter of 2008 as compared to no sales of securities by our investment bank for the third quarter of 2009. Revenue from our investment bank is primarily based on the value of securities sales. The increase in real estate FFO was primarily from contributions from two acquisitions made in December 2008 and two in June 2009. There was no GOS in either the third quarter of 2009 or 2008.

Comparing results for the first nine months of 2009 to 2008, Net Income and EPS decreased $5.7 million or $0.08 per share; and FFO and FFO+GOS each decreased $0.7 million or $0.01 per share. The decrease in FFO was primarily from a decrease in investment banking FFO of $4.4 million and was partially offset by an increase in real estate FFO of $3.7 million. The decrease from investment banking was caused by lower sales of securities by our investment bank, which decreased $56.8 million to $550,000 for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008. Revenue from our investment bank is primarily based on the value of securities sales. The increase in real estate FFO was primarily from contributions from two acquisitions made in December 2008 and two in June 2009. There was no GOS in either the first nine months of 2009 or 2008.

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

"For the third quarter of 2009, FSP's profits as represented by FFO+GOS totaled approximately $17.5 million or $0.25 per share, sequentially flat compared to the second quarter of 2009. Dividend distributions declared for the third quarter of 2009, which are payable on November 20, 2009, will be approximately $15.1 million or $0.19 per share.

"Significant portions of our real estate investment business, specifically property sales and investment banking, are transactional. Similar to both the first and second quarters of 2009, neither of these business segments made a positive contribution to third quarter results. Substantially all profits for the quarter were produced by our ongoing/recurring real estate operations.

"Although FSP has certain properties in its portfolio that we would contemplate selling, it is unlikely that near-term market conditions will favor further dispositions. Improvement in both liquidity and pricing is needed to help revitalize the property sales environment, and likely will be linked to a meaningful resumption of an active and stable mortgage-lending market for commercial real estate. However, when we believe that the right part of the real estate cycle has returned, you can expect to see FSP again complete property dispositions, thereby closing the loop on our total return strategy.

"During the third quarter of 2009, our investment banking group completed no investor capital closings and consequently operated at a loss for the quarter which totaled approximately $0.6 million, or about $.01 per share. Significantly, during the last two weeks of the third quarter, our investment banking group began its first new private placement real estate offering of 2009. Opportunistic property acquisition prospects for this business segment are now beginning to become more visible. In addition, a growing interest from our established investor clients to move some portion of their capital from the sidelines to specific property investment situations is occurring. Early analysis of this new private placement real estate offering would suggest a moderate recommencement of this transactional business segment. The potential for meaningful profit contribution in 2010 and beyond from our investment banking group looks promising but remains subject to broader capital market economic activity.

"While profits continued to suffer in the third quarter of 2009 from our transactional businesses, our real estate portfolio of 32 properties maintained an overall 90% occupancy and provided steady rental income. FFO for the third quarter of 2009 was $0.25 per share, all of which came from ongoing real estate operations net of the cost of maintaining our investment banking capability.

"On September 30, 2009, FSP purchased an office property located in Falls Church, Virginia for a price of $73,000,000. The property was our third direct portfolio acquisition this year. In total the three properties acquired to date in 2009 have added approximately 517,109 square feet for a total investment of approximately $124,600,000. Property acquisition efforts are active, and we would expect to acquire additional property in 2009.

"It is FSP's objective to grow our property portfolio and rental income business during this period of liquidity-constrained capital markets. In addition to using our balance sheet strength to help finance and fund new acquisitions, raising equity by issuing additional shares of our common stock for sale to the broader public markets will also be considered as a part of our capital funding/property acquisition/growth strategy. The timing and execution of such capital events will be subject to, among other things, the size and amount of our specific property acquisition opportunities and the acceptance of our shares by the public capital markets. An initial execution of this component of our growth funding plan was completed on September 23, 2009 with our first-ever underwritten public offering of 9.2 million shares of our common stock at a price to the public of $13 per share. The offering resulted in net proceeds to the Company of approximately $114.7 million net of underwriter's discounts and offering costs. A portion of those proceeds was used to complete the Falls Church, Virginia, property acquisition on September 30. We continue to be very optimistic about FSP's position in the current commercial real estate investment market and the opportunities that are presenting themselves to acquire commercial properties at better pricing and value metrics than we have seen in the last several years."

Dividend Announcement

On October 16, 2009, the Board of Directors of the Company declared a cash distribution of $0.19 per share of common stock payable on November 20, 2009 to stockholders of record on October 30, 2009.

Real Estate Update

On September 30, 2009 we acquired an office property in Falls Church, Virginia for approximately $73 million. Supplementary Schedules D & E provide property information for our continuing real estate portfolio of 32 properties and for three non-consolidated REITs that we have interests in as of September 30, 2009. The Company will also be filing a 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.

A reconciliation of Net Income to FFO and FFO+GOS is shown below and definitions of FFO and FFO+GOS are provided on Supplementary Schedule H. We believe FFO 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 FFO+GOS is an important measure as it considers investment performance.

                                    Three Months Ended  Nine Months Ended
                                      September 30,       September 30,
                                    ------------------  ------------------
(In thousands, except per share
 amounts)                             2009      2008      2009      2008
                                    --------  --------  --------  --------

Net income                          $  6,941  $  7,419  $ 19,614  $ 25,340
     (Gain) Loss on sale of
      properties                           -         -         -         -
     GAAP (income) loss from
      non-consolidated REITs            (475)     (679)   (1,710)   (2,167)
     Distributions from
      non-consolidated REITs           1,119     1,561     4,257     3,838
     Acquisition costs of new
      properties                         391         -       639         -
     Depreciation of real estate &
      intangible amortization          9,561     8,784    29,484    25,994
                                    --------  --------  --------  --------
Funds From Operations (FFO)           17,537    17,085    52,284    53,005
     Plus gains on sales of
      properties                           -         -         -         -
                                    --------  --------  --------  --------
FFO+GOS                             $ 17,537  $ 17,085  $ 52,284  $ 53,005
                                    ========  ========  ========  ========

Per Share Data
EPS                                 $   0.10  $   0.11  $   0.28  $   0.36
FFO                                 $   0.25  $   0.24  $   0.74  $   0.75
GOS                                 $      -  $      -  $      -  $      -
FFO+GOS                             $   0.25  $   0.24  $   0.74  $   0.75

Weighted average shares (basic and
 diluted)                             71,281    70,481    70,750    70,481
                                    ========  ========  ========  ========

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.

A conference call is scheduled for November 4, 2009 at 10:00 a.m. (ET) to discuss the third quarter 2009 results. The toll free number is 1-866-700-7101, passcode 33138194. Internationally, the call may be accessed by dialing 1-617-213-8837, passcode 33138194. 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 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. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. FSP's subsidiary, FSP Investments LLC (member, FINRA 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 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, 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, 2008), 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 Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2008, 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                                     F
Largest 20 Tenants - FSP Owned Portfolio                  G
Definition of Funds From Operations (FFO) and FFO+GOS     H




              Franklin Street Properties Corp. Financial Results
                         Supplementary Schedule A
                 Condensed Consolidated Income Statements
                                (Unaudited)



                                          For the            For the
                                    Three Months Ended  Nine Months Ended
                                       September 30,       September 30,
                                    ------------------  ------------------
(in thousands, except per share
 amounts)                             2009      2008      2009      2008
                                    --------  --------  --------  --------

Revenue:
     Rental                         $ 31,702  $ 27,927  $ 90,774  $ 82,283
Related party revenue:
     Syndication fees                      -       304        39     3,766
     Transaction fees                      1       300       543     3,606
     Management fees and interest
      income from loans                  370       380     1,232     1,364
Other                                     19        13        55        52
                                    --------  --------  --------  --------
        Total revenue                 32,092    28,924    92,643    91,071
                                    --------  --------  --------  --------

Expenses:
     Real estate operating expenses    7,752     7,159    22,176    20,973
     Real estate taxes and
      insurance                        5,364     4,590    14,879    13,375
     Depreciation and amortization     8,801     7,666    26,940    22,616
     Selling, general and
      administrative                   2,243     1,927     6,378     6,557
     Commissions                           8       208       178     2,020
     Interest                          1,744     1,108     4,920     3,351
                                    --------  --------  --------  --------

       Total expenses                 25,912    22,658    75,471    68,892
                                    --------  --------  --------  --------

Income before interest income,
 equity in earnings of
 non-consolidated REITs and taxes      6,180     6,266    17,172    22,179
Interest income                           16       177        88       657
Equity in earnings of
 non-consolidated REITs                  475       679     1,710     2,167
                                    --------  --------  --------  --------

Income before taxes                    6,671     7,122    18,970    25,003
Income tax benefit                      (270)     (297)     (644)     (337)
                                    --------  --------  --------  --------


Net income                          $  6,941  $  7,419  $ 19,614  $ 25,340
                                    ========  ========  ========  ========

Weighted average number of shares
 outstanding, basic and diluted       71,281    70,481    70,750    70,481
                                    ========  ========  ========  ========

Net income per share, basic and
 diluted                            $   0.10  $   0.11  $   0.28  $   0.36
                                    ========  ========  ========  ========




            Franklin Street Properties Corp. Financial Results
                         Supplementary Schedule B
                  Condensed Consolidated Balance Sheets
                                (Unaudited)


(in thousands, except share and par             September 30, December 31,
 value amounts)                                 ------------  ------------
                                                    2009          2008
                                                ------------  ------------
Assets:
Real estate assets, net                         $    926,555  $    844,058
Acquired real estate leases, less accumulated
 amortization of $35,106 and $29,200,
 respectively                                         48,003        28,518
Investment in non-consolidated REITs                  93,936        83,046
Assets held for syndication, net                           -        13,254
Cash and cash equivalents                             26,385        29,244
Restricted cash                                          331           336
Tenant rent receivables, less allowance for
 doubtful accounts of $620 and $509,
 respectively                                          1,400         1,329
Straight-line rent receivable, less allowance
 for doubtful accounts of $100 and $261,
 respectively                                          9,724         8,816
Prepaid expenses                                       3,430         2,206
Related party mortgage loan receivable                23,264         1,125
Other assets                                           1,452         2,406
Office computers and furniture, net of
 accumulated depreciation of $1,194 and $1,108,
 respectively                                            408           281
Deferred leasing commissions, net of
 accumulated amortization of $4,820, and
 $3,416, respectively                                 10,887        10,814
                                                ------------  ------------
    Total assets                                $  1,145,775  $  1,025,433
                                                ============  ============

Liabilities and Stockholders’ Equity:
Liabilities:
  Bank note payable                             $     91,008  $     67,468
  Term loan payable                                   75,000        75,000
  Accounts payable and accrued expenses               25,351        22,297
  Accrued compensation                                   750         1,654
  Tenant security deposits                             1,757         1,874
  Other liabilities: derivative termination
   value                                               2,269         3,099
  Acquired unfavorable real estate leases, less
   accumulated amortization of $2,440, and
   $1,779, respectively                                5,661         5,044
                                                ------------  ------------
    Total liabilities                                201,796       176,436
                                                ------------  ------------

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, 79,680,705 and 70,480,705
   shares issued and outstanding, respectively             8             7
  Additional paid-in capital                       1,003,729       889,019
  Accumulated other comprehensive loss                (2,269)       (3,099)
  Accumulated distributions in excess of
   accumulated earnings                              (57,489)      (36,930)
                                                ------------  ------------
     Total stockholders’ equity                      943,979       848,997
                                                ------------  ------------
     Total liabilities and stockholders’ equity $  1,145,775  $  1,025,433
                                                ============  ============




            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)                                            2009      2008
                                                        --------  --------
Cash flows from operating activities:
  Net income                                            $ 19,614  $ 25,340
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization expense                 27,141    22,649
    Amortization of above market lease                     2,544     3,376
    Equity in earnings of non-consolidated REITs          (1,710)   (2,167)
    Distributions from non-consolidated REITs              4,257     3,838
    Increase in bad debt reserve                             111        79
  Changes in operating assets and liabilities:
    Restricted cash                                            5         -
    Tenant rent receivables, net                            (182)      219
    Straight-line rents, net                                (849)     (854)
    Prepaid expenses and other assets, net                  (472)   (1,474)
    Accounts payable, accrued expenses                     4,294     3,863
    Accrued compensation                                    (904)       88
    Tenant security deposits                                (117)      (51)
    Payment of deferred leasing commissions               (2,202)   (2,434)
                                                        --------  --------
      Net cash provided by operating activities           51,530    52,472
                                                        --------  --------
Cash flows from investing activities:
  Purchase of real estate assets, office computers and
   furniture, capitalized merger costs and acquired
   real estate leases                                   (130,819)  (39,282)
  Investment in non-consolidated REITs                   (13,200)      (10)
  Investment in related party mortgage loan receivable   (22,139)   (1,125)
  Investment in assets held for syndication               13,017    12,235
                                                        --------  --------
      Net cash used in investing activities             (153,141)  (28,182)
                                                        --------  --------
Cash flows from financing activities:
  Distributions to stockholders                          (40,173)  (57,089)
  Equity offering                                        115,385         -
  Borrowings under bank note payable                      23,540    20,368
  Deferred financing costs                                     -       (30)
                                                        --------  --------
      Net cash provided by (used in) financing
       activities                                         98,752   (36,751)
                                                        --------  --------
Net decrease in cash and cash equivalents                 (2,859)  (12,461)
Cash and cash equivalents, beginning of period            29,244    46,988
                                                        --------  --------
Cash and cash equivalents, end of period                $ 26,385  $ 34,527
                                                        ========  ========




            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
                                                  ------------ -----------
                   2009                                488,456         8.2%
                   2010                                761,351        12.8%
                   2011                                384,237         6.5%
                   2012                                647,178        10.9%
                   2013                                349,015         5.9%
                   2014                                584,389         9.8%
                   Thereafter (2)                    2,719,998        45.9%
                                                  ------------ -----------
                                                     5,934,624       100.0%
                                                  ============ ===========


       (1) Percentages are determined based upon square footage of expiring
           commercial leases.
       (2) Includes 468,000 square feet of current vacancies.




(In Thousands)                   As of September 30, 2009
                -----------------------------------------------------------
                   # of                    % of       Square       % of
State           Properties  Investment  Portfolio      Feet     Portfolio
                ----------- ----------- ----------  ----------- ----------

Texas                     7 $   229,853       24.8%       1,489       25.1%
Virginia                  5     161,198       17.4%         933       15.7%
Colorado                  4     128,819       13.9%         792       13.3%
Georgia                   1      76,152        8.2%         387        6.5%
Missouri                  3      73,009        7.9%         477        8.0%
Maryland                  2      61,888        6.7%         424        7.1%
Florida                   1      48,389        5.2%         213        3.6%
Indiana                   1      36,725        4.0%         205        3.5%
Illinois                  1      30,424        3.3%         177        3.0%
California                2      21,520        2.3%         182        3.1%
Michigan                  1      14,884        1.6%         215        3.6%
Washington                1      14,864        1.6%         117        2.0%
Minnesota                 1      14,657        1.6%         153        2.6%
North Carolina            2      14,172        1.5%         172        2.9%
                ----------- ----------- ----------  ----------- ----------
                         32 $   926,555      100.0%       5,935      100.0%
                =========== =========== ==========  =========== ==========


Property by type:
(dollars &
 square feet                     As of September 30, 2009
 in 000's)         # of                    % of       Square       % of
Type            Properties  Investment  Portfolio      Feet     Portfolio
                ----------- ----------- ----------  ----------- ----------
Office                   31 $   921,499       99.5%       5,836       98.3%
Industrial                1       5,056        0.5%          99        1.7%
                         32 $   926,555      100.0%       5,935      100.0%




            Franklin Street Properties Corp. Earnings Release
                         Supplementary Schedule E
              Portfolio and Other Supplementary Information
                        (Unaudited & Approximated)


Capital Expenditures
Owned Portfolio                                         Nine Months Ended
                                                      ---------------------
(in thousands)                                        30-Sep-09  30-Sep-08
                                                      ---------- ----------

Tenant improvements                                   $    3,217 $    4,564
Deferred leasing costs                                     2,202      2,434
Building improvements                                        846      1,310
                                                      ---------- ----------
                                                      $    6,265 $    8,308
                                                      ========== ==========




Square foot & leased percentages                 September 30, December 31,
                                                  -----------  -----------
                                                      2009         2008
                                                  -----------  -----------

Owned portfolio of commercial real estate
       Number of properties                                32           29
       Square feet                                  5,934,624    5,417,515
       Leased percentage                                   90%          93%

Investments in non-consolidated commercial real
 estate
       Number of properties                                 3            2
       Square feet                                  1,995,041    1,461,224
       Leased percentage                                   78%          80%

Single Asset REITs (SARs) managed
       Number of properties                                 9           10
       Square feet*                                 2,155,201    2,684,561
       Leased percentage*                                  90%          92%

Total owned, investments & managed properties
       Number of properties*                               44           41
       Square feet*                                10,084,866    9,563,300
       Leased percentage*                                  88%          93%

*Excludes a property to be constructed with approximately 285,000 square
feet.



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



                                                        Square   % Leased
Single Asset REIT name                 City     State    Feet    30-Sep-09
                                    ----------- ------ --------- ---------
FSP 303 East Wacker Drive Corp.         Chicago     IL   844,081     75.28%
FSP Grand Boulevard Corp.           Kansas City     MO   532,453     88.64%
FSP Phoenix Tower Corp.                 Houston     TX   618,507     73.95%
                                                       --------- ---------
                                                       1,995,041     78.43%
                                                       --------- ---------




            Franklin Street Properties Corp. Earnings Release
          Supplementary Schedule F: Prior 4 Quarter Information
                                (Unaudited)


(in 000's)
                                       Q2        Q1        Q4        Q3
Revenue:                              2009      2009      2008      2008
                                    --------  --------  --------  --------
  Rental                            $ 29,254  $ 29,818  $ 28,915  $ 27,927
  Related party revenue:
     Syndication fees                     29        10         -       304
     Transaction fees                    514        28        35       300
     Management fees and interest
      income from loans                  317       545       375       380
  Other                                   18        18        20        13
                                    --------  --------  --------  --------
        Total revenue                 30,132    30,419    29,345    28,924
                                    --------  --------  --------  --------

Expenses:
     Real estate operating expenses    7,144     7,280     8,026     7,159
     Real estate taxes and insurance   4,686     4,829     4,366     4,590
     Depreciation and amortization    10,225     7,914     7,744     7,666
     Selling, general and
      administrative                   2,127     2,008     1,711     1,927
     Commissions                          40       130       131       208
     Interest                          1,599     1,577     1,570     1,108
                                    --------  --------  --------  --------
        Total expenses                25,821    23,738    23,548    22,658
                                    --------  --------  --------  --------

     Income before interest income,
      equity in earnings in
      non-consolidated REITs           4,311     6,681     5,797     6,266
     Interest income                      36        36        89       177
     Equity in earnings in
      non-consolidated REITs             443       792       580       679
                                    --------  --------  --------  --------

     Income before taxes on income     4,790     7,509     6,466     7,123
     Taxes on income                     (75)     (299)     (153)     (297)
                                    --------  --------  --------  --------

     Income from continuing
      operations                       4,865     7,808     6,619     7,419
     Income from discontinued
      operations                           -         -         -         -
                                    --------  --------  --------  --------

     Income before gain on sale of
      properties                       4,865     7,808     6,619     7,419
     Gain on sale of assets                -         -         -         -
                                    --------  --------  --------  --------
     Net income                     $  4,865  $  7,808  $  6,619  $  7,419
                                    ========  ========  ========  ========

FFO and FFO+GOS calculations:

Net income                          $  4,865  $  7,808  $  6,619  $  7,419
                                    --------  --------  --------  --------
   (Gain) Loss on sale of assets           -         -         -         -
   GAAP income from non-consolidated
    REITs                               (443)     (792)     (580)     (679)
   Distributions from
    non-consolidated REITs             1,523     1,615     1,510     1,561
   Acquisition costs                     248         -         -         -
   Depreciation & amortization        11,216     8,707     8,650     8,784
                                    --------  --------  --------  --------
Funds From Operations (FFO)           17,409    17,338    16,199    17,085
   Plus gains on sales of assets           -         -         -         -
                                    --------  --------  --------  --------
FFO+GOS                             $ 17,409  $ 17,338  $ 16,199  $ 17,085
                                    ========  ========  ========  ========




            Franklin Street Properties Corp. Earnings Release
                         Supplementary Schedule G
                 Largest 20 Tenants - FSP Owned Portfolio
                         As of September 30, 2009
                          (Unaudited & Estimated)


    The following table includes the largest 20 tenants in FSP's owned
                  portfolio based on square feet leased.



                                                             SIC    % of
      Tenant                                         Sq Ft   Code Portfolio
                                                   --------- ---- --------
1  Capital One Services, Inc. (1)                    297,789   61      5.0%
2  Noblis, Inc.                                      252,613   54      4.2%
3  Citgo Petroleum Corporation                       248,399   29      4.2%
4  Tektronix Texas, LLC                              241,372   73      4.0%
5  Burger King Corporation                           212,619   58      3.6%
6  New Era of Networks, Inc. (Sybase)                199,077   73      3.4%
7  RGA Reinsurance Company                           185,501   63      3.1%
8  Citigroup Credit Services, Inc (2)                176,848   61      3.0%
9  CH Robinson Worldwide, Inc.                       153,028   47      2.6%
10 Geisecke & Devrient                               135,888   73      2.3%
11 Murphy Exploration & Production Company           133,786   13      2.2%
12 CACI Technologies, Inc.                           132,896   73      2.2%
13 Monsanto Company                                  127,778   28      2.2%
14 Northrop Grumman Information Technology, Inc.     111,469   73      1.9%
15 Maines Paper & Food Service, Inc.                  98,745   51      1.7%
16 Amdocs, Inc.                                       91,928   73      1.6%
17 County of Santa Clara                              90,467   81      1.5%
18 Ober Kaler Grimes & Shriver                        88,736   91      1.5%
19 Technip-Coflexip USA Holdings, Inc                 86,059   13      1.4%
20 Vail Holding Corp d/b/a Vail Resorts               83,620   79      1.4%
                                                   ---------      --------
      Total                                        3,148,618          53.0%
                                                   ---------      --------


(1) The lease with Capital One Services, Inc. expired on October 31, 2009.
(2) The lease with Citicorp Credit Services, Inc. is guaranteed by
    Citigroup.




                Franklin Street Properties Corp. Earnings Release
                           Supplementary Schedule H
                  Definition of Funds From Operations ("FFO"),
                    and FFO plus Gains on Sales ("FFO+GOS")

The Company evaluates the performance of its reportable segments based on several measures including, Funds From Operations ("FFO") and FFO plus Gains on Sales ("FFO+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 FFO as net income (computed in accordance with generally accepted accounting principles, or GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, and after adjustments to exclude non-cash income (or losses) from non-consolidated or Sponsored REITs, plus distributions received from non-consolidated or Sponsored REITs. The Company defines FFO+GOS as FFO as defined above, plus gains (or losses) from sales of properties and provisions for assets held for sale, if applicable.

FFO and FFO+GOS should not be considered as alternatives to net income (determined in accordance with GAAP), as indicators of the Company's financial performance, nor as alternatives to cash flows from operating activities (determined in accordance with GAAP), nor as measures of the Company's liquidity, nor 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, FFO and FFO+GOS should be examined in connection with net income and cash flows from operating, investing and financing activities in the condensed consolidated financial statements.

Contact Information

  • Contact:
    John Demeritt
    877-686-9496