EX-99.1 2 ex99-1.htm PRESS RELEASE

Exhibit 99.1

PRESS RELEASE | Franklin Street Properties Corp.
401 Edgewater Place · Suite 200 · Wakefield, Massachusetts 01880 · (781) 557-1300 · www.franklinstreetproperties.com
Contact: John Demeritt (877) 686-9496 | FOR IMMEDIATE RELEASE

FRANKLIN STREET PROPERTIES CORP. ANNOUNCES

FOURTH QUARTER & YEAR END 2012 RESULTS

Wakefield, MA—February 19, 2013—Franklin Street Properties Corp. (the “Company”, “FSP”, “we” or “our”) (NYSE MKT: FSP), an investment firm specializing in real estate, announced today Funds From Operations (FFO) of $20.5 million or $0.25 per share for the fourth quarter ended December 31, 2012; and FFO of $79.0 million or $0.95 per share for the full year ended December 31, 2012. Net income was $5.5 million or $0.07 per share for the fourth quarter and $7.6 million or $0.09 per share for the year ended December 31, 2012.

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 December 31, |  |  | Year Ended December 31, |
(in 000's except per share data) |  | 2012 |  |  | 2011 |  |  | Increase (Decrease) |  |  | 2012 |  |  | 2011 |  |  | Increase (Decrease) |
Net Income |  | $ | 5,460 |  |  | $ | 5,062 |  |  | $ | 397 |  |  | $ | 7,633 |  |  | $ | 43,524 |  |  | $ | (35,891 | )
FFO |  | $ | 20,515 |  |  | $ | 18,457 |  |  | $ | 2,058 |  |  | $ | 79,041 |  |  | $ | 71,210 |  |  | $ | 7,831 |
Per Share Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.07 |  |  | $ | 0.06 |  |  | $ | 0.01 |  |  | $ | 0.09 |  |  | $ | 0.53 |  |  | $ | (0.44 | )
FFO |  | $ | 0.25 |  |  | $ | 0.22 |  |  | $ | 0.03 |  |  | $ | 0.95 |  |  | $ | 0.87 |  |  | $ | 0.08 |
Weighted average shares (diluted) |  |  | 82,937 |  |  |  | 82,937 |  |  |  | — |  |  |  | 82,937 |  |  |  | 81,857 |  |  |  | 1,080 |

Comparing results for the fourth quarter of 2012 to the same period in 2011, FFO increased $2.1 million or $0.03 per share. The FFO increase was primarily from higher property income due to three acquisitions completed since October 2011 and improved occupancy in our portfolio, and increased interest income from secured real estate loans, which was partially offset by higher interest expense and G&A. Net Income and EPS was $5.5 million or $0.07 per share for the fourth quarter of 2012 compared to net income of $5.1 million and $0.06 per share for the fourth quarter of 2011.

Comparing results for the year ended December 31, 2012 to 2011, FFO increased $7.8 million or $0.08 per share. The FFO increase was primarily from higher property income due to seven acquisitions completed since the start of 2011 and improved occupancy in our portfolio, and increased interest income from loans on secured real estate, which was partially offset by higher interest expense and G&A. Net Income and EPS was $7.6 million and $0.09 per share, respectively, for the year ended December 31, 2012 compared to net income of $43.5 million and $0.53 per share for the same period in 2011. For the year ended December 31, 2012, Net Income includes the effect of a loss from discontinued operations of $15.7 million or $0.19 per share. The loss included a $14.8 million loss on a property sold in December and $0.9 million in losses from the operations of the property we sold.

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

“For the fourth quarter of 2012, FSP's profits as represented by FFO totaled approximately $20.5 million or $0.25 per share, an increase of approximately $0.6 million or $0.01 per share compared to the third quarter of 2012. Dividend distributions declared for the fourth quarter of 2012, which are payable on February 14, 2013, will be approximately $15.8 million or $0.19 per share. For the full-year 2012, FSP’s profits as represented by FFO totaled approximately $79.0 million or $0.95 per share, an increase of approximately $7.8 million or $.08 per share compared to full-year 2011. We are optimistic about our potential for continued profit growth in 2013.

Our directly-owned real estate portfolio of 37 properties, totaling approximately 7,854,679 square feet, was approximately 94.0% leased as of December 31, 2012, up from approximately 89.9% leased at the end of the third quarter and up from approximately 88.7% leased as of December 31, 2011. The increase in the percentage of leased space for the fourth quarter and full-year 2012 continues to make a meaningful contribution to our profit growth. Our property portfolio of primarily suburban office assets has relatively modest lease expirations over the next two years which we have continued to proactively reduce during the course of 2012. As of year-end 2012, only 3.55% of our commercial square footage is scheduled to expire in 2013 and, along with our improving occupancy levels, continues to allow overall tenant improvement expenditures and leasing costs to moderate in relation to the level of rental revenues being achieved.

There was one new real estate investment completed in the fourth quarter of 2012. On November 1, FSP completed the acquisition of a Class A suburban office property in Houston, Texas known as “Westchase I & II” for $154.8 million. The property is a two-building office complex totaling approximately 629,025 rentable square feet and is located in Houston’s Westchase District. Each building is 14 stories, and the entire property is approximately 96.3% leased to numerous tenants. FSP, its affiliates and predecessor have been investing in suburban Houston since 1993 and with the addition of this asset, we own five properties totaling approximately 1,515,682 square feet in Houston as of year-end 2012. Additional potential real estate investment opportunities are actively being explored and we would anticipate further real estate investments during 2013.

There were two property dispositions completed in the fourth quarter of 2012. First, one of our single–asset REIT affiliates, “FSP Phoenix Tower Corp.”, sold its 34-story 623,944 square foot office building in Houston, Texas for $123,750,000. FSP’s first mortgage loan of $15 million was repaid in full and our equity investment in Phoenix Tower realized a gain of $1.6 million. The second disposition was our Southfield, Michigan property on which we had taken an estimated provision for loss last quarter. We continuously review and evaluate our directly-owned portfolio of 37 properties for potentially advantageous dispositions and would anticipate further potential opportunities in the area during 2013.

As 2013 begins, FSP will focus on continuing to grow profits by (1) increasing occupancy and rents on its portfolio of properties while (2) acquiring additional real estate investments that have the potential to add to profits.

We are very optimistic about our prospects for growth during 2013 and beyond.”

__________________________________________________________________________________________

Dividend Announcement

On January 26, 2013, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended December 31, 2012 of $0.19 per share of common stock payable on February 14, 2013 to stockholders of record on January 25, 2013.

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Real Estate Update

Supplementary schedules provide property information for the Company’s owned real estate portfolio and for three non-consolidated REITs in which the Company holds preferred stock interests as of December 31, 2012. 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.

Earnings Call

A conference call is scheduled for February 20, 2013 at 10:00 a.m. (ET) to discuss the fourth quarter and 2012 results. To access the call, please dial 1-888-317-6016. Internationally, the call may be accessed by dialing 1-412-317-6016. 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.

__________________________________________________________________________________________

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

Reconciliation of Net Income to FFO: |  | Three Months Ended |  |  | Year Ended |
|  | December 31, |  |  | December 31, |
(In thousands, except per share amounts) |  | 2012 |  |  | 2011 |  |  | 2012 |  |  | 2011 |
Net income |  | $ | 5,460 |  |  | $ | 5,062 |  |  | $ | 7,633 |  |  | $ | 43,524 |
(Gain) loss on sale, less applicable income tax |  |  | 526 |  |  |  | — |  |  |  | 14,826 |  |  |  | (21,939 | )
GAAP (income) loss from non-consolidated REITs |  |  | (972 | ) |  |  | (978 | ) |  |  | (2,033 | ) |  |  | (4,490 | )
Distributions from non-consolidated REITs |  |  | 76 |  |  |  | 971 |  |  |  | 2,810 |  |  |  | 5,056 |
Depreciation & amortization |  |  | 15,239 |  |  |  | 13,247 |  |  |  | 55,518 |  |  |  | 48,439 |
NAREIT FFO |  |  | 20,329 |  |  |  | 18,302 |  |  |  | 78,754 |  |  |  | 70,590 |
Acquisition costs of new properties |  |  | 186 |  |  |  | 155 |  |  |  | 287 |  |  |  | 620 |
Funds From Operations (FFO) |  | $ | 20,515 |  |  | $ | 18,457 |  |  | $ | 79,041 |  |  | $ | 71,210 |
Per Share Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.07 |  |  | $ | 0.06 |  |  | $ | 0.09 |  |  | $ | 0.53 |
FFO |  | $ | 0.25 |  |  | $ | 0.22 |  |  | $ | 0.95 |  |  | $ | 0.87 |
Weighted average shares (basic and diluted) |  |  | 82,937 |  |  |  | 82,937 |  |  |  | 82,937 |  |  |  | 81,857 |

________________________________________________________________________________________

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.

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About Franklin Street Properties Corp.

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on achieving current income and long-term growth through investments in commercial properties. The majority of FSP's property portfolio is suburban office buildings, with select investments in certain central business district properties. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.

Forward-Looking Statements

Statements made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, changes in government regulations and regulatory uncertainty, uncertainty about governmental fiscal policy, geopolitical events and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012, as the same may be updated from time to time in subsequent filings with the United States Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

Franklin Street Properties Corp.

Earnings Release

Supplementary Information

Table of Contents

Franklin Street Properties Corp. Financial Results | A-C
Real Estate Portfolio Summary Information | D
Portfolio and Other Supplementary Information | E
Quarterly Information – Prior Four Quarters | F
Percentage of Leased Space | G
Largest 20 Tenants – FSP Owned Portfolio | H
Definition of Funds From Operations (FFO) | I

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule A

Condensed Consolidated Income (Loss) Statements

(Unaudited)

|  | For the Three Months Ended December 31, |  |  | For the Year Ended December 31, |
(in thousands, except per share amounts) |  | 2012 |  |  | 2011 |  |  | 2012 |  |  | 2011 |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental |  | $ | 41,532 |  |  | $ | 36,744 |  |  | $ | 151,656 |  |  | $ | 134,238 |
Related party revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Management fees and interest income from loans |  |  | 1,801 |  |  |  | 1,051 |  |  |  | 10,947 |  |  |  | 4,046 |
Other |  |  | 87 |  |  |  | 29 |  |  |  | 199 |  |  |  | 49 |
Total revenue |  |  | 43,420 |  |  |  | 37,824 |  |  |  | 162,802 |  |  |  | 138,333 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate operating expenses |  |  | 10,501 |  |  |  | 9,486 |  |  |  | 37,441 |  |  |  | 35,076 |
Real estate taxes and insurance |  |  | 5,960 |  |  |  | 5,357 |  |  |  | 22,913 |  |  |  | 20,114 |
Depreciation and amortization |  |  | 15,225 |  |  |  | 12,951 |  |  |  | 54,872 |  |  |  | 47,622 |
Selling, general and administrative |  |  | 2,462 |  |  |  | 2,012 |  |  |  | 9,916 |  |  |  | 6,913 |
Interest |  |  | 4,167 |  |  |  | 3,261 |  |  |  | 16,068 |  |  |  | 12,666 |
Total expenses |  |  | 38,315 |  |  |  | 33,067 |  |  |  | 141,210 |  |  |  | 122,391 |
Income before interest income, equity in earnings of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
non-consolidated REITs and taxes |  |  | 5,105 |  |  |  | 4,757 |  |  |  | 21,592 |  |  |  | 15,942 |
Interest income |  |  | 34 |  |  |  | 3 |  |  |  | 51 |  |  |  | 22 |
Equity in earnings of non-consolidated REITs |  |  | 972 |  |  |  | 978 |  |  |  | 2,033 |  |  |  | 3,685 |
Income before taxes on income |  |  | 6,111 |  |  |  | 5,738 |  |  |  | 23,376 |  |  |  | 19,649 |
Taxes on income |  |  | 99 |  |  |  | 82 |  |  |  | 335 |  |  |  | 267 |
Income from continuing operations |  |  | 6,012 |  |  |  | 5,656 |  |  |  | 23,341 |  |  |  | 19,382 |
Discontinued operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) from discontinued operations, net of income tax |  |  | (26 | ) |  |  | (594 | ) |  |  | (882 | ) |  |  | 2,203 |
Gain (loss) on sale, less applicable income tax |  |  | (526 | ) |  |  | — |  |  |  | (14,826 | ) |  |  | 21,939 |
Total discontinued operations |  |  | (552 | ) |  |  | (594 | ) |  |  | (15,708 | ) |  |  | 24,142 |
Net income (loss) |  | $ | 5,460 |  |  | $ | 5,062 |  |  | $ | 7,633 |  |  | $ | 43,524 |
Weighted average number of shares outstanding, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
basic and diluted |  |  | 82,937 |  |  |  | 82,937 |  |  |  | 82,937 |  |  |  | 81,857 |
Earnings (loss) per share, basic and diluted, attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing operations |  | $ | 0.07 |  |  | $ | 0.07 |  |  | $ | 0.28 |  |  | $ | 0.24 |
Discontinued operations |  |  | — |  |  |  | (0.01 | ) |  |  | (0.19 | ) |  |  | 0.29 |
Net income per share, basic and diluted |  | $ | 0.07 |  |  | $ | 0.06 |  |  | $ | 0.09 |  |  | $ | 0.53 |

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule B

Condensed Consolidated Balance Sheets

(Unaudited)

|  | December 31, |
(in thousands, except share and par value amounts) |  | 2012 |  |  | 2011 |
Assets: |  |  |  |  |  |  |  |
Real estate assets, net |  | $ | 1,142,628 |  |  | $ | 991,225 |
Acquired real estate leases, less accumulated amortization |  |  |  |  |  |  |  |
of $40,062 and $31,189, respectively |  |  | 111,982 |  |  |  | 91,613 |
Investment in non-consolidated REITs |  |  | 81,960 |  |  |  | 87,598 |
Assets held for sale |  |  | — |  |  |  | 15,355 |
Cash and cash equivalents |  |  | 21,267 |  |  |  | 23,813 |
Restricted cash |  |  | 575 |  |  |  | 493 |
Tenant rent receivables, less allowance for doubtful accounts |  |  |  |  |  |  |  |
of $1,300 and $1,235, respectively |  |  | 1,749 |  |  |  | 1,460 |
Straight-line rent receivable, less allowance for doubtful accounts |  |  |  |  |  |  |  |
of $135 and $135, respectively |  |  | 35,441 |  |  |  | 28,502 |
Prepaid expenses |  |  | 1,106 |  |  |  | 1,223 |
Related party mortgage loan receivables |  |  | 93,896 |  |  |  | 140,516 |
Other assets |  |  | 12,655 |  |  |  | 4,070 |
Office computers and furniture, net of accumulated depreciation |  |  |  |  |  |  |  |
of $584 and $428, respectively |  |  | 544 |  |  |  | 468 |
Deferred leasing commissions, net of accumulated amortization |  |  |  |  |  |  |  |
of $11,812 and $9,139, respectively |  |  | 23,376 |  |  |  | 22,325 |
Total assets |  | $ | 1,527,179 |  |  | $ | 1,408,661 |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |
Bank note payable |  | $ | 216,750 |  |  | $ | 449,000 |
Term loan payable |  |  | 400,000 |  |  |  | — |
Accounts payable and accrued expenses |  |  | 31,122 |  |  |  | 26,446 |
Accrued compensation |  |  | 2,540 |  |  |  | 2,222 |
Tenant security deposits |  |  | 2,489 |  |  |  | 2,008 |
Other liabilities: derivative liability |  |  | 1,219 |  |  |  | — |
Acquired unfavorable real estate leases, less accumulated amortization |  |  |  |  |  |  |  |
of $4,870 and $3,759, respectively |  |  | 8,310 |  |  |  | 7,618 |
Total liabilities |  |  | 662,430 |  |  |  | 487,294 |
Commitments and 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, 82,937,405 and 82,937,405 shares issued and outstanding, respectively |  |  | 8 |  |  |  | 8 |
Additional paid-in capital |  |  | 1,042,876 |  |  |  | 1,042,876 |
Accumulated other comprehensive loss |  |  | (1,219 | ) |  |  | — |
Accumulated distributions in excess of accumulated earnings |  |  | (176,916 | ) |  |  | (121,517 | )
Total stockholders’ equity |  |  | 864,749 |  |  |  | 921,367 |
Total liabilities and stockholders’ equity |  | $ | 1,527,179 |  |  | $ | 1,408,661 |

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Franklin Street Properties Corp. Financial Results

Supplementary Schedule C

Condensed Consolidated Statements of Cash Flows

(Unaudited)

|  | For the Year Ended December 31, |
(in thousands) |  | 2012 |  |  | 2011 |
Cash flows from operating activities: |  |  |  |  |  |  |  |
Net income |  | $ | 7,633 |  |  | $ | 43,524 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |
Depreciation and amortization expense |  |  | 57,500 |  |  |  | 50,261 |
Amortization of above market lease |  |  | 71 |  |  |  | (47 | )
Gain (loss) on sale, less applicable income tax |  |  | 14,826 |  |  |  | (21,939 | )
Equity in earnings of non-consolidated REITs |  |  | (2,033 | ) |  |  | (3,086 | )
Distributions from non-consolidated REITs |  |  | 705 |  |  |  | 3,474 |
Increase (decrease) in bad debt reserve |  |  | 65 |  |  |  | (365 | )
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Restricted cash |  |  | (82 | ) |  |  | (73 | )
Tenant rent receivables |  |  | (354 | ) |  |  | 827 |
Straight-line rents |  |  | (4,464 | ) |  |  | (9,878 | )
Lease acquisition costs |  |  | (2,520 | ) |  |  | — |
Prepaid expenses and other assets |  |  | (328 | ) |  |  | 1,611 |
Accounts payable, accrued expenses and other items |  |  | 3,717 |  |  |  | 4,213 |
Accrued compensation |  |  | 318 |  |  |  | 419 |
Tenant security deposits |  |  | 481 |  |  |  | 78 |
Payment of deferred leasing commissions |  |  | (5,179 | ) |  |  | (8,058 | )
Net cash provided by operating activities |  |  | 70,356 |  |  |  | 60,961 |
Cash flows from investing activities: |  |  |  |  |  |  |  |
Purchase of real estate assets, office computers and furniture |  |  | (183,868 | ) |  |  | (174,020 | )
Acquired real estate leases |  |  | (37,302 | ) |  |  | (62,230 | )
Investment in non-consolidated REITs |  |  | (1 | ) |  |  | (10 | )
Distributions in excess of earnings from non-consolidated REITs |  |  | 2,105 |  |  |  | 1,582 |
Investment in related party mortgage loan receivable |  |  | (74,580 | ) |  |  | (82,832 | )
Repayment of related party mortgage loan receivable |  |  | 121,200 |  |  |  | — |
Changes in deposits on real estate assets |  |  | — |  |  |  | 200 |
Investment in assets held for syndication |  |  | — |  |  |  | 2,230 |
Proceeds received on sales of real estate assets |  |  | 157 |  |  |  | 96,790 |
Net cash used in investing activities |  |  | (172,289 | ) |  |  | (218,290 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |
Distributions to stockholders |  |  | (63,032 | ) |  |  | (62,177 | )
Proceeds from equity offering |  |  | — |  |  |  | 18,001 |
Offering costs |  |  | — |  |  |  | (706 | )
Borrowings under bank note payable |  |  | 294,750 |  |  |  | 449,000 |
Repayments of bank note payable |  |  | (527,000 | ) |  |  | (209,968 | )
Borrowing (repayment) of term loan payable |  |  | 400,000 |  |  |  | (74,850 | )
Deferred financing costs |  |  | (5,331 | ) |  |  | (5,388 | )
Swap termination payment |  |  | — |  |  |  | (983 | )
Net cash provided by financing activities |  |  | 99,387 |  |  |  | 112,929 |
Net increase (decrease) in cash and cash equivalents |  |  | (2,546 | ) |  |  | (44,400 | )
Cash and cash equivalents, beginning of year |  |  | 23,813 |  |  |  | 68,213 |
Cash and cash equivalents, end of year |  | $ | 21,267 |  |  | $ | 23,813 |

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule D

Real Estate Portfolio Summary Information

(Unaudited & Approximated)

Commercial portfolio lease expirations (1)
|  | Total | % of
Year |  | Square Feet | Portfolio
2013 |  | 278,946 | 3.6%
2014 |  | 417,721 | 5.3%
2015 |  | 1,074,381 | 13.7%
2016 |  | 1,099,491 | 14.0%
2017 |  | 876,268 | 11.2%
Thereafter (2) |  | 4,107,872 | 52.2%
|  | 7,854,679 | 100.0%

| (1) | Percentages are determined based upon square footage of expiring commercial leases.

| (2) | Includes 472,776 square feet of current vacancies.

(dollars & square feet in 000's) | As of December 31, 2012
| # of |  | % of |  | Square | % of
State | Properties | Investment | Portfolio |  | Feet | Portfolio
Texas | 11 | $ 421,397 | 36.9% |  | 2,657 | 33.8%
Colorado | 4 | 122,335 | 10.7% |  | 788 | 10.0%
Georgia | 2 | 107,725 | 9.4% |  | 774 | 9.9%
Virginia | 4 | 99,295 | 8.7% |  | 685 | 8.7%
Minnesota | 2 | 39,899 | 3.5% |  | 628 | 8.0%
Missouri | 3 | 66,083 | 5.8% |  | 477 | 6.1%
North Carolina | 3 | 67,032 | 5.9% |  | 431 | 5.5%
Illinois | 2 | 49,869 | 4.3% |  | 372 | 4.7%
Maryland | 1 | 53,377 | 4.7% |  | 326 | 4.2%
Florida | 1 | 45,569 | 4.0% |  | 213 | 2.7%
Indiana | 1 | 34,777 | 3.0% |  | 205 | 2.6%
California | 2 | 21,444 | 1.9% |  | 182 | 2.3%
Washington | 1 | 13,826 | 1.2% |  | 117 | 1.5%
| 37 | $ 1,142,628 | 100.0% |  | 7,855 | 100.0%

-9-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

Capital Expenditures |  |  |
Owned Portfolio | Year Ended
(in thousands) | 31-Dec-12 |  | 31-Dec-11
Tenant improvements | $ 13,037 |  | $ 19,032
Deferred leasing costs | 7,427 |  | 8,058
Building improvements | 3,712 |  | 2,826
| $ 24,176 |  | $ 29,916

Square foot & leased percentages | December 31, | December 31,
|  | 2012 |  | 2011
Owned portfolio of commercial real estate (a) |  |  |
| Number of properties | 37 |  | 36
| Square feet | 7,854,679 |  | 7,052,068
| Leased percentage | 94% |  | 89%
Investments in non-consolidated REITs (b) |  |  |
| Number of properties | 2 |  | 3
| Square feet | 1,392,316 |  | 2,001,542
| Leased percentage | 65% |  | 87%
Single Asset REITs (SARs) managed |  |  |
| Number of properties | 13 |  | 13
| Square feet | 3,323,566 |  | 3,322,639
| Leased percentage | 87% |  | 80%
Total owned, investments & managed properties (a) |  |  |
| Number of properties | 52 |  | 52
| Square feet | 12,570,561 |  | 12,376,249
| Leased percentage | 89% |  | 86%
(a) 2011 Includes asset sold in 2012. |  |
(b) 2011 Includes FSP Phoenix Tower Corp., which was sold in 2012. |  |

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

|  |  | Square | % Leased | % Interest
Single Asset REIT name | City | State | Feet | 31-Dec-12 | Held
FSP 303 East Wacker Drive Corp. | Chicago | IL | 857,245 | 55.7% | 43.7%
FSP Grand Boulevard Corp. | Kansas City | MO | 535,071 | 80.5% | 27.0%
|  |  | 1,392,316 | 65.2% |

-10-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F: Quarterly Information

(Unaudited)

(in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Q1 |  |  | Q2 |  |  | Q3 |  |  | Q4 |  |  | Annual |
Revenue: |  | 2012 |  |  | 2012 |  |  | 2012 |  |  | 2012 |  |  | 2012 |
Rental |  | $ | 36,303 |  |  | $ | 35,570 |  |  | $ | 38,251 |  |  | $ | 41,532 |  |  | $ | 151,656 |
Related party revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Management fees and interest income from loans |  |  | 2,616 |  |  |  | 3,045 |  |  |  | 3,485 |  |  |  | 1,801 |  |  |  | 10,947 |
Other |  |  | 34 |  |  |  | 39 |  |  |  | 39 |  |  |  | 87 |  |  |  | 199 |
Total revenues |  |  | 38,953 |  |  |  | 38,654 |  |  |  | 41,775 |  |  |  | 43,420 |  |  |  | 162,802 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate operating expenses |  |  | 8,697 |  |  |  | 8,604 |  |  |  | 9,639 |  |  |  | 10,501 |  |  |  | 37,441 |
Real estate taxes and insurance |  |  | 5,696 |  |  |  | 5,493 |  |  |  | 5,764 |  |  |  | 5,960 |  |  |  | 22,913 |
Depreciation and amortization |  |  | 13,071 |  |  |  | 13,004 |  |  |  | 13,572 |  |  |  | 15,225 |  |  |  | 54,872 |
Selling, general and administrative |  |  | 2,077 |  |  |  | 2,236 |  |  |  | 3,141 |  |  |  | 2,462 |  |  |  | 9,916 |
Interest |  |  | 3,677 |  |  |  | 4,037 |  |  |  | 4,187 |  |  |  | 4,167 |  |  |  | 16,068 |
Total expenses |  |  | 33,218 |  |  |  | 33,374 |  |  |  | 36,303 |  |  |  | 38,315 |  |  |  | 141,210 |
Income before interest income, equity in earnings of non-consolidated REITs and taxes on income |  |  | 5,735 |  |  |  | 5,280 |  |  |  | 5,472 |  |  |  | 5,105 |  |  |  | 21,592 |
Interest income |  |  | 8 |  |  |  | 4 |  |  |  | 5 |  |  |  | 34 |  |  |  | 51 |
Equity in earnings of non-consolidated REITs |  |  | 391 |  |  |  | 494 |  |  |  | 176 |  |  |  | 972 |  |  |  | 2,033 |
Income before taxes on income |  |  | 6,134 |  |  |  | 5,778 |  |  |  | 5,653 |  |  |  | 6,111 |  |  |  | 23,676 |
Taxes on income |  |  | 79 |  |  |  | 77 |  |  |  | 80 |  |  |  | 99 |  |  |  | 335 |
Income from continuing operations |  |  | 6,055 |  |  |  | 5,701 |  |  |  | 5,573 |  |  |  | 6,012 |  |  |  | 23,341 |
Discontinued operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income from discontinued operations, net of tax |  |  | (317 | ) |  |  | (268 | ) |  |  | (271 | ) |  |  | (26 | ) |  |  | (882 | )
Gain (loss) on sale, less applicable income tax |  |  | — |  |  |  | — |  |  |  | (14,300 | ) |  |  | (526 | ) |  |  | (14,826 | )
Total discontinued operations |  |  | (317 | ) |  |  | (268 | ) |  |  | (14,571 | ) |  |  | (552 | ) |  |  | 15,708 |
Net income |  | $ | 5,738 |  |  | $ | 5,433 |  |  | $ | (8,998 | ) |  | $ | 5,460 |  |  | $ | 7,633 |
FFO calculations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 5,738 |  |  | $ | 5,433 |  |  | $ | (8,998 | ) |  | $ | 5,460 |  |  | $ | 7,633 |
Gain (loss) on sale, less applicable income tax |  |  | — |  |  |  | — |  |  |  | 14,300 |  |  |  | 526 |  |  |  | 14,826 |
GAAP income from non-consolidated REITs |  |  | (391 | ) |  |  | (494 | ) |  |  | (176 | ) |  |  | (972 | ) |  |  | (2,033 | )
Distributions from non-consolidated REITs |  |  | 929 |  |  |  | 898 |  |  |  | 907 |  |  |  | 76 |  |  |  | 2,810 |
Acquisition costs |  |  | — |  |  |  | — |  |  |  | 101 |  |  |  | 186 |  |  |  | 287 |
Depreciation of real estate & intangible amortization |  |  | 13,295 |  |  |  | 13,205 |  |  |  | 13,779 |  |  |  | 15,239 |  |  |  | 55,518 |
Funds From Operations (FFO) |  | $ | 19,571 |  |  | $ | 19,042 |  |  | $ | 19,913 |  |  | $ | 20,515 |  |  | $ | 79,041 |

-11-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule G

Percentage of Leased Space

(Unaudited & Estimated)

|  |  |  | % | Third | % | Fourth
|  |  |  | Leased (1) | Quarter | Leased (1) | Quarter
|  |  | Square | as of | Average % | as of | Average %
| Property Name | Location | Feet | 30-Sep-12 | Leased (2) | 31-Dec-12 | Leased (2)
1 | PARK SENECA | Charlotte, NC | 109,406 | 77.3% | 78.2% | 79.3% | 79.4%
2 | HILLVIEW CENTER | Milpitas, CA | 36,288 | 100.0% | 100.0% | 100.0% | 100.0%
3 | FOREST PARK | Charlotte, NC | 62,212 | 100.0% | 100.0% | 100.0% | 100.0%
4 | CENTENNIAL | Colorado Springs, CO | 110,405 | 85.4% | 85.4% | 85.4% | 85.4%
5 | MEADOW POINT | Chantilly, VA | 138,537 | 100.0% | 100.0% | 100.0% | 100.0%
6 | TIMBERLAKE | Chesterfield, MO | 232,766 | 97.0% | 97.0% | 97.0% | 97.0%
7 | FEDERAL WAY | Federal Way, WA | 117,010 | 47.0% | 47.0% | 47.0% | 47.0%
8 | NORTHWEST POINT | Elk Grove Village, IL | 176,848 | 100.0% | 100.0% | 100.0% | 100.0%
9 | TIMBERLAKE EAST | Chesterfield, MO | 116,197 | 97.0% | 97.0% | 97.0% | 97.0%
10 | PARK TEN | Houston, TX | 155,715 | 96.1% | 96.1% | 96.1% | 96.1%
11 | MONTAGUE | San Jose, CA | 145,951 | 100.0% | 100.0% | 100.0% | 100.0%
12 | ADDISON | Addison, TX | 293,787 | 98.4% | 96.7% | 98.4% | 98.4%
13 | COLLINS CROSSING | Richardson, TX | 298,766 | 90.0% | 88.5% | 90.0% | 90.0%
14 | GREENWOOD PLAZA | Englewood, CO | 196,236 | 48.9% | 48.9% | 100.0% | 83.0%
15 | RIVER CROSSING | Indianapolis, IN | 205,059 | 97.0% | 96.7% | 92.2% | 94.1%
16 | LIBERTY PLAZA | Addison, TX | 218,934 | 85.2% | 85.2% | 81.7% | 82.9%
17 | INNSBROOK | Glen Allen, VA | 298,456 | 98.3% | 98.3% | 98.3% | 98.3%
18 | 380 INTERLOCKEN | Broomfield, CO | 240,184 | 89.5% | 89.5% | 89.5% | 89.5%
19 | BLUE LAGOON | Miami, FL | 212,619 | 100.0% | 100.0% | 100.0% | 100.0%
20 | ELDRIDGE GREEN | Houston, TX | 248,399 | 100.0% | 100.0% | 100.0% | 100.0%
21 | WILLOW BEND | Plano, TX | 117,050 | 77.8% | 77.8% | 77.8% | 77.8%
22 | ONE OVERTON PARK | Atlanta, GA | 387,267 | 94.6% | 94.6% | 94.6% | 94.6%
23 | 390 INTERLOCKEN | Broomfield, CO | 241,516 | 97.2% | 97.2% | 97.2% | 97.2%
24 | EAST BALTIMORE | Baltimore, MD | 325,445 | 57.2% | 57.5% | 77.3% | 77.3%
25 | PARK TEN PHASE II | Houston, TX | 156,746 | 100.0% | 100.0% | 100.0% | 100.0%
26 | LAKESIDE CROSSING I | Maryland Heights, MO | 127,778 | 100.0% | 100.0% | 100.0% | 100.0%
27 | LOUDOUN TECH | Dulles, VA | 135,888 | 100.0% | 100.0% | 100.0% | 100.0%
28 | 4807 STONECROFT | Chantilly, VA | 111,469 | 100.0% | 100.0% | 100.0% | 100.0%
29 | EDEN BLUFF | Eden Prairie, MN | 153,028 | 100.0% | 100.0% | 100.0% | 100.0%
30 | 121 SOUTH EIGHTH ST | Minneapolis, MN | 475,303 | 91.1% | 92.6% | 90.6% | 90.8%
31 | EMPEROR BOULEVARD | Durham, NC | 259,531 | 100.0% | 100.0% | 100.0% | 100.0%
32 | LEGACY TENNYSON CTR | Plano, TX | 202,600 | 100.0% | 100.0% | 100.0% | 100.0%
33 | ONE LEGACY | Plano, TX | 214,110 | 100.0% | 100.0% | 100.0% | 100.0%
34 | 909 DAVIS | Evanston, IL | 195,245 | 97.9% | 96.9% | 97.9% | 97.9%
35 | 1410 EAST RENNER | Richardson, TX | 122,300 | 100.0% | 100.0% | 100.0% | 100.0%
36 | ONE RAVINIA DRIVE | Atlanta, GA | 386,603 | 84.5% | 84.0% | 91.0% | 86.6%
37 | WESTCHASE I & II | Houston, TX | 629,025 | n/a | n/a | 96.3% | 96.3%
| TOTAL WEIGHTED AVERAGE (3) | 7,854,679 | 89.9% | 89.8% | 94.0% | 92.4%

(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.

(3) Third & Fourth Quarter Total Weighted Averages include asset sold in December 2012 located in Southfield, Michigan with 214,697 sf

-12-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

Largest 20 Tenants – FSP Owned Portfolio

(Unaudited & Estimated)

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

| As of December 31, 2012 |  |  |
|  |  |  | % of
| Tenant | Sq Ft | SIC Code | Portfolio
1 | TCF National Bank | 268,252 | 60 | 3.4%
2 | Quintiles Transnational Corp | 259,531 | 87 | 3.3%
3 | CITGO Petroleum Corporation | 248,399 | 29 | 3.2%
4 | Burger King Corporation | 212,619 | 58 | 2.7%
5 | Denbury Onshore LLC | 202,600 | 13 | 2.6%
6 | RGA Reinsurance Company | 197,354 | 63 | 2.5%
7 | SunTrust Bank | 182,888 | 60 | 2.3%
8 | Citicorp Credit Services, Inc | 176,848 | 61 | 2.3%
9 | C.H. Robinson Worldwide, Inc | 153,028 | 47 | 1.9%
10 | T-Mobile South, LLC dba T-Mobile | 151,792 | 48 | 1.9%
11 | Houghton Mifflin Harcourt Publishing Company | 150,050 | 27 | 1.9%
12 | Petrobras America, Inc. | 144,813 | 13 | 1.8%
13 | Murphy Exploration & Production Company | 144,677 | 13 | 1.8%
14 | Giesecke & Devrient America, Inc. | 135,888 | 73 | 1.7%
15 | Monsanto Company | 127,778 | 28 | 1.6%
16 | Federal National Mortgage Association | 123,144 | 61 | 1.6%
17 | AT&T Services, Inc. | 122,300 | 48 | 1.6%
18 | Vail Holdings, Inc. | 122,232 | 79 | 1.6%
19 | Kaiser Foundation Health Plan, Inc. | 120,979 | 64 | 1.5%
20 | Northrop Grumman Systems Corporation | 111,469 | 73 | 1.5%
| Total | 3,356,641 |  | 42.7%
| (a) Based on rentable square footage |  |  |

-13-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule I

Definition of Funds From Operations (“FFO”),

The Company evaluates performance based on Funds From Operations, which we refer to as FFO, as management believes that FFO represents the most accurate measure of activity and is the basis for distributions paid to equity holders. The Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and acquisition costs of newly acquired properties that are not capitalized, plus depreciation and amortization, including amortization of acquired above and below market lease intangibles and impairment charges, 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.

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 the National Association of Real Estate Investment Trusts, or 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.