EX-99.1 2 ex99-1.htm EARNINGS 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

Third Quarter 2014 Results

Wakefield, MA—October 28, 2014—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 $27.9 million or $0.28 per share for the third quarter ended September 30, 2014. Net income was $1.6 million or $0.02 per share for the third quarter ended September 30, 2014.

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 per share data) |  | 2014 |  |  | 2013 |  |  | Increase (Decrease) |  |  | 2014 |  |  | 2013 |  |  | Increase (Decrease) |
Net Income |  | $ | 1,567 |  |  | $ | 4,094 |  |  | $ | (2,527 | ) |  | $ | 8,853 |  |  | $ | 13,236 |  |  | $ | (4,383 | )
FFO |  | $ | 27,904 |  |  | $ | 27,566 |  |  | $ | 338 |  |  | $ | 84,937 |  |  | $ | 71,613 |  |  | $ | 13,324 |
Per Share Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.02 |  |  | $ | 0.04 |  |  | $ | (0.02 | ) |  | $ | 0.09 |  |  | $ | 0.14 |  |  | $ | (0.05 | )
FFO |  | $ | 0.28 |  |  | $ | 0.28 |  |  | $ | — |  |  | $ | 0.85 |  |  | $ | 0.78 |  |  | $ | 0.07 |
Weighted average shares (diluted) |  |  | 100,187 |  |  |  | 100,187 |  |  |  | — |  |  |  | 100,187 |  |  |  | 91,720 |  |  |  | 8,467 |

Comparing results for the third quarter of 2014 to the same period in 2013, FFO increased $0.3 million to $27.9 million and was flat per share at $0.28 per share. The FFO increase was primarily from higher property income and was partially offset by higher interest costs. Net Income and EPS was $1.6 million or $0.02 per share for the third quarter of 2014 compared to a net income of $4.1 million or $0.04 per share for the third quarter of 2013.

Comparing results for the nine months ended September 30, 2014 to the same period in 2013, FFO increased $13.3 million or $0.07 per share to $84.9 million or $0.85 per share. The FFO increase was primarily from higher property income. The increase was partially offset by higher interest costs and G&A expenses. Net Income and EPS was $8.9 million or $0.09 per share for the nine months ended September 30, 2014 compared to a net income of $13.2 million or $0.14 per share for the same period in 2013.

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

“For the third quarter of 2014, FSP's funds from operations, or FFO, totaled approximately $27.9 million or $0.28 per share. For the nine months ending September 30, 2014, FSP's FFO totaled approximately $84.9 million or $0.85 per share, a 9.0% increase over the same period last year on a per share basis. Dividend distributions declared for the third quarter of 2014 were approximately $19.0 million or $0.19 per share. Our directly-owned real estate portfolio of 39 properties, totaling approximately 9.7 million square feet, was approximately 93.3% leased as of September 30, 2014, and our comparative same-store rental growth totaled approximately 2.8% through the first nine months of 2014.

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Currently, we are in active efforts to lease existing vacancy and future portfolio lease-rolls and to potentially dispose of several of our suburban office assets that, we believe, are no longer core to our long-term strategy. We also are pursuing a number of potential new property acquisitions within our primary markets, as well as continuing to analyze with our development team the best opportunity for the anticipated future repositioning of our 801 Marquette Avenue South office building located in Minneapolis, Minnesota.

As we begin the fourth quarter of 2014, our property portfolio is operating smoothly with generally steady or improving rental conditions in most of our locations. We remain very optimistic about our continuing growth prospects for the balance of 2014 and beyond.”

Dividend Update

On October 10, 2014, the Company announced that its Board of Directors declared a regular quarterly dividend for the three months ended September 30, 2014 of $0.19 per share of common stock that will be paid on November 13, 2014 to stockholders of record on October 24, 2014.

FFO Guidance

Our full year FFO guidance for 2014 is updated to be in the range of $1.10 to $1.12 per diluted share. This guidance (a) excludes the impact of future acquisitions, 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, 2014. 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.

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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. 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) |  | 2014 |  | 2013 |  | 2014 |  | 2013
Net income |  | $ | 1,567 |  |  | $ | 4,094 |  |  | $ | 8,853 |  |  | $ | 13,236 |
GAAP loss from non-consolidated REITs |  |  | 455 |  |  |  | 431 |  |  |  | 1,491 |  |  |  | 814 |
FFO from non-consolidated REITs |  |  | 508 |  |  |  | 459 |  |  |  | 1,278 |  |  |  | 1,802 |
Depreciation & amortization |  |  | 25,374 |  |  |  | 22,176 |  |  |  | 73,301 |  |  |  | 55,205 |
NAREIT FFO |  |  | 27,904 |  |  |  | 27,160 |  |  |  | 84,923 |  |  |  | 71,057 |
Acquisition costs of new properties |  |  | — |  |  |  | 406 |  |  |  | 14 |  |  |  | 556 |
Funds From Operations (FFO) |  | $ | 27,904 |  |  | $ | 27,566 |  |  | $ | 84,937 |  |  | $ | 71,613 |
Per Share Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS |  | $ | 0.02 |  |  | $ | 0.04 |  |  | $ | 0.09 |  |  | $ | 0.14 |
FFO |  | $ | 0.28 |  |  | $ | 0.28 |  |  | $ | 0.85 |  |  | $ | 0.78 |
Weighted average shares (basic and diluted) |  |  | 100,187 |  |  |  | 100,187 |  |  |  | 100,187 |  |  |  | 91,720 |

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 29, 2014 at 9:00 a.m. (ET) to discuss the third quarter 2014 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.

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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, 2013, 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

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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) |  | 2014 |  | 2013 |  | 2014 |  | 2013
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental |  | $ | 59,728 |  |  | $ | 56,760 |  |  | $ | 182,319 |  |  | $ | 145,618 |
Related party revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Management fees and interest income from loans |  |  | 1,462 |  |  |  | 1,665 |  |  |  | 4,776 |  |  |  | 4,929 |
Other |  |  | — |  |  |  | 21 |  |  |  | 99 |  |  |  | 64 |
Total revenue |  |  | 61,190 |  |  |  | 58,446 |  |  |  | 187,194 |  |  |  | 150,611 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate operating expenses |  |  | 15,632 |  |  |  | 13,991 |  |  |  | 45,698 |  |  |  | 35,877 |
Real estate taxes and insurance |  |  | 8,555 |  |  |  | 8,801 |  |  |  | 27,569 |  |  |  | 22,704 |
Depreciation and amortization |  |  | 24,878 |  |  |  | 22,163 |  |  |  | 72,741 |  |  |  | 54,863 |
Selling, general and administrative |  |  | 3,071 |  |  |  | 3,477 |  |  |  | 9,491 |  |  |  | 9,213 |
Interest |  |  | 6,883 |  |  |  | 5,474 |  |  |  | 20,950 |  |  |  | 13,856 |
Total expenses |  |  | 59,019 |  |  |  | 53,906 |  |  |  | 176,449 |  |  |  | 136,513 |
Income before interest income, equity in losses of non-consolidated REITs and taxes |  |  | 2,171 |  |  |  | 4,540 |  |  |  | 10,745 |  |  |  | 14,098 |
Interest income |  |  | — |  |  |  | 5 |  |  |  | 2 |  |  |  | 10 |
Equity in losses of non-consolidated REITs |  |  | (455 | ) |  |  | (431 | ) |  |  | (1,491 | ) |  |  | (814 | )
Income before taxes on income |  |  | 1,716 |  |  |  | 4,114 |  |  |  | 9,256 |  |  |  | 13,294 |
Taxes on income |  |  | 149 |  |  |  | 118 |  |  |  | 403 |  |  |  | 352 |
Income from continuing operations |  |  | 1,567 |  |  |  | 3,996 |  |  |  | 8,853 |  |  |  | 12,942 |
Discontinued operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income from discontinued operations, net of income tax |  |  | — |  |  |  | 98 |  |  |  | — |  |  |  | 294 |
Total discontinued operations |  |  | — |  |  |  | 98 |  |  |  | — |  |  |  | 294 |
Net income |  | $ | 1,567 |  |  | $ | 4,094 |  |  | $ | 8,853 |  |  | $ | 13,236 |
Weighted average number of shares outstanding, basic and diluted |  |  | 100,187 |  |  |  | 100,187 |  |  |  | 100,187 |  |  |  | 91,720 |
Earnings per share, basic and diluted, attributable to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing operations |  | $ | 0.02 |  |  | $ | 0.04 |  |  | $ | 0.09 |  |  | $ | 0.14 |
Discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net income per share, basic and diluted |  | $ | 0.02 |  |  | $ | 0.04 |  |  | $ | 0.09 |  |  | $ | 0.14 |

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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) |  | 2014 |  | 2013
Assets: |  |  |  |  |  |  |  |
Real estate assets: |  |  |  |  |  |  |  |
Land |  | $ | 185,479 |  |  | $ | 185,479 |
Buildings and improvements |  |  | 1,613,699 |  |  |  | 1,603,941 |
Fixtures and equipment |  |  | 1,633 |  |  |  | 1,170 |
|  |  | 1,800,811 |  |  |  | 1,790,590 |
Less accumulated depreciation |  |  | 258,799 |  |  |  | 222,252 |
Real estate assets, net |  |  | 1,542,012 |  |  |  | 1,568,338 |
Acquired real estate leases, less accumulated amortization of $95,534 and $69,848, respectively |  |  | 149,019 |  |  |  | 183,454 |
Investment in non-consolidated REITs |  |  | 78,907 |  |  |  | 80,494 |
Cash and cash equivalents |  |  | 15,930 |  |  |  | 19,623 |
Restricted cash |  |  | 707 |  |  |  | 643 |
Tenant rent receivables, less allowance for doubtful accounts of $175 and $50, respectively |  |  | 2,865 |  |  |  | 5,102 |
Straight-line rent receivable, less allowance for doubtful accounts of $135 and $135, respectively |  |  | 46,737 |  |  |  | 42,261 |
Prepaid expenses and other assets |  |  | 9,131 |  |  |  | 10,506 |
Related party mortgage loan receivables |  |  | 88,436 |  |  |  | 99,746 |
Other assets: derivative asset |  |  | 4,582 |  |  |  | 5,321 |
Office computers and furniture, net of accumulated depreciation of $964 and $747, respectively |  |  | 637 |  |  |  | 709 |
Deferred leasing commissions, net of accumulated amortization of $17,841 and $15,031, respectively |  |  | 28,354 |  |  |  | 27,837 |
Total assets |  | $ | 1,967,317 |  |  | $ | 2,044,034 |
|  |  | ` |  |  |  |  |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |
Bank note payable |  | $ | 285,000 |  |  | $ | 306,500 |
Term loans payable |  |  | 620,000 |  |  |  | 620,000 |
Accounts payable and accrued expenses |  |  | 40,228 |  |  |  | 44,137 |
Accrued compensation |  |  | 2,863 |  |  |  | 2,985 |
Tenant security deposits |  |  | 4,331 |  |  |  | 4,027 |
Other liabilities: derivative liability |  |  | 4,847 |  |  |  | 2,044 |
Acquired unfavorable real estate leases, less accumulated amortization of $8,045 and $6,926, respectively |  |  | 11,679 |  |  |  | 14,175 |
Total liabilities |  |  | 968,948 |  |  |  | 993,868 |
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 income (loss) |  |  | (265 | ) |  |  | 3,277 |
Accumulated distributions in excess of accumulated earnings |  |  | (274,932 | ) |  |  | (226,677 | )
Total stockholders’ equity |  |  | 998,369 |  |  |  | 1,050,166 |
Total liabilities and stockholders’ equity |  | $ | 1,967,317 |  |  | $ | 2,044,034 |

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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) |  | 2014 |  | 2013
Cash flows from operating activities: |  |  |  |  |  |  |  |
Net income |  | $ | 8,853 |  |  | $ | 13,236 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 74,237 |  |  |  | 56,796 |
Amortization of above and below market leases |  |  | 560 |  |  |  | (277 | )
Equity in losses of non-consolidated REITs |  |  | 1,491 |  |  |  | 814 |
Increase (decrease) in bad debt reserve |  |  | 125 |  |  |  | (1,220 | )
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Restricted cash |  |  | (64 | ) |  |  | (48 | )
Tenant rent receivables |  |  | 2,112 |  |  |  | (3,060 | )
Straight-line rents |  |  | (4,038 | ) |  |  | (3,920 | )
Lease acquisition costs |  |  | (438 | ) |  |  | (820 | )
Prepaid expenses and other assets |  |  | (106 | ) |  |  | (1,845 | )
Accounts payable, accrued expenses and other items |  |  | (2,133 | ) |  |  | 6,860 |
Accrued compensation |  |  | (122 | ) |  |  | (108 | )
Tenant security deposits |  |  | 304 |  |  |  | 1,402 |
Payment of deferred leasing commissions |  |  | (4,854 | ) |  |  | (7,532 | )
Net cash provided by operating activities |  |  | 75,927 |  |  |  | 60,278 |
Cash flows from investing activities: |  |  |  |  |  |  |  |
Purchase of real estate assets, office computers and furniture |  |  | (12,403 | ) |  |  | (468,893 | )
Acquired real estate leases |  |  | — |  |  |  | (100,143 | )
Investment in non-consolidated REITs |  |  | — |  |  |  | 4,858 |
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 | ) |  |  | (4,950 | )
Net cash used in investing activities |  |  | (1,012 | ) |  |  | (569,047 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |
Proceeds from stock offering |  |  | — |  |  |  | 241,500 |
Offering costs |  |  | — |  |  |  | (10,789 | )
Distributions to stockholders |  |  | (57,108 | ) |  |  | (50,552 | )
Borrowings under bank note payable |  |  | 10,000 |  |  |  | 160,000 |
Repayments of bank note payable |  |  | (31,500 | ) |  |  | (45,250 | )
Borrowing from term loan payable |  |  | — |  |  |  | 220,000 |
Deferred financing costs |  |  | — |  |  |  | (1,868 | )
Net cash provided by (used in) financing activities |  |  | (78,608 | ) |  |  | 513,041 |
Net increase (decrease) in cash and cash equivalents |  |  | (3,693 | ) |  |  | 4,272 |
Cash and cash equivalents, beginning of year |  |  | 19,623 |  |  |  | 21,267 |
Cash and cash equivalents, end of period |  | $ | 15,930 |  |  | $ | 25,539 |

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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 |
| 2014 |  | 200,150 |  |  |  | 2.1 | %
| 2015 |  | 738,292 |  |  |  | 7.6 | %
| 2016 |  | 933,033 |  |  |  | 9.6 | %
| 2017 |  | 1,099,438 |  |  |  | 11.3 | %
| 2018 |  | 929,300 |  |  |  | 9.6 | %
| Thereafter (2) |  | 5,790,148 |  |  |  | 59.8 | %
|  |  | 9,690,361 |  |  |  | 100.0 | %

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

| (2) | Includes 645,437 square feet of current vacancies.

(dollars & square feet in 000's) | As of September 30, 2014
|  | # of |  |  |  | % of |  | Square |  | % of
State |  |  | Properties |  |  |  | Investment |  |  |  | Portfolio |  |  |  | Feet |  |  |  | Portfolio |
Texas |  |  | 10 |  |  | $ | 395,769 |  |  |  | 25.7 | % |  |  | 2,539 |  |  |  | 26.2 | %
Colorado |  |  | 6 |  |  |  | 450,062 |  |  |  | 29.2 | % |  |  | 2,120 |  |  |  | 21.9 | %
Georgia |  |  | 3 |  |  |  | 222,317 |  |  |  | 14.4 | % |  |  | 1,396 |  |  |  | 14.4 | %
Virginia |  |  | 4 |  |  |  | 94,707 |  |  |  | 6.1 | % |  |  | 685 |  |  |  | 7.1 | %
Minnesota |  |  | 2 |  |  |  | 43,160 |  |  |  | 2.8 | % |  |  | 628 |  |  |  | 6.5 | %
Missouri |  |  | 3 |  |  |  | 62,667 |  |  |  | 4.1 | % |  |  | 477 |  |  |  | 4.9 | %
North Carolina |  |  | 3 |  |  |  | 64,143 |  |  |  | 4.2 | % |  |  | 431 |  |  |  | 4.4 | %
Illinois |  |  | 2 |  |  |  | 46,757 |  |  |  | 3.0 | % |  |  | 372 |  |  |  | 3.8 | %
Maryland |  |  | 1 |  |  |  | 51,811 |  |  |  | 3.3 | % |  |  | 325 |  |  |  | 3.4 | %
Florida |  |  | 1 |  |  |  | 43,433 |  |  |  | 2.8 | % |  |  | 213 |  |  |  | 2.2 | %
Indiana |  |  | 1 |  |  |  | 33,125 |  |  |  | 2.2 | % |  |  | 205 |  |  |  | 2.1 | %
California |  |  | 2 |  |  |  | 20,507 |  |  |  | 1.3 | % |  |  | 182 |  |  |  | 1.9 | %
Washington |  |  | 1 |  |  |  | 13,554 |  |  |  | 0.9 | % |  |  | 117 |  |  |  | 1.2 | %
|  |  | 39 |  |  | $ | 1,542,012 |  |  |  | 100.0 | % |  |  | 9,690 |  |  |  | 100.0 | %

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule E

Portfolio and Other Supplementary Information

(Unaudited & Approximated)

Capital Expenditures |  |  |  |  |  |
Owned Portfolio |  | Three Months Ended |  | Nine Months Ended
(in thousands) |  | 30-Sep-14 |  | 30-Sep-13 |  | 30-Sep-14 |  | 30-Sep-13
Tenant improvements |  | $ | 2,640 |  |  | $ | 4,596 |  |  | $ | 5,610 |  |  | $ | 12,079 |
Deferred leasing costs |  |  | 944 |  |  |  | 3,821 |  |  |  | 4,851 |  |  |  | 7,721 |
Building improvements |  |  | 943 |  |  |  | 1,552 |  |  |  | 4,264 |  |  |  | 4,292 |
|  | $ | 4,527 |  |  | $ | 9,969 |  |  | $ | 14,725 |  |  | $ | 24,092 |

Square foot & leased percentages | September, |  | December 31,
|  | 2014 |  | 2013
Owned portfolio of commercial real estate |  |  |
| Number of properties | 39 |  | 39
| Square feet | 9,690,361 |  | 9,685,285
| Leased percentage | 93.3% |  | 94.1%
Investments in non-consolidated REITs |  |  |
| Number of properties | 2 |  | 2
| Square feet | 1,395,500 |  | 1,395,500
| Leased percentage | 71.0% |  | 64.1%
Single Asset REITs (SARs) managed |  |  |
| Number of properties | 9 |  | 12
| Square feet | 2,036,572 |  | 3,067,199
| Leased percentage | 86.6% |  | 87.4%
Total owned, investments & managed properties |  |  |
| Number of properties | 50 |  | 53
| Square feet | 13,122,433 |  | 14,147,984
| Leased percentage | 89.9% |  | 89.7%

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-14 | Held
FSP 303 East Wacker Drive Corp. | Chicago | IL | 860,429 | 62.7% | 43.7%
FSP Grand Boulevard Corp. | Kansas City | MO | 535,071 | 84.4% | 27.0%
|  |  | 1,395,500 | 71.0% |

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Franklin Street Properties Corp. Earnings Release

Supplementary Schedule F

Percentage of Leased Space

(Unaudited & Estimated)

|  |  |  |  | Second |  | Third
|  |  |  | % Leased (1) | Quarter | % Leased (1) | Quarter
|  |  |  | as of | Average % | as of | Average %
| Property Name | Location | Square Feet | 30-Jun-14 | Leased (2) | 30-Sep-14 | Leased (2)
1 | PARK SENECA | Charlotte, NC | 109,674 | 87.8% | 86.2% | 88.4% | 88.2%
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 | 97.3% | 97.3% | 97.3% | 97.3%
5 | MEADOW POINT | Chantilly, VA | 138,537 | 92.6% | 92.6% | 92.6% | 92.6%
6 | TIMBERLAKE | Chesterfield, MO | 232,766 | 98.3% | 98.3% | 98.3% | 98.3%
7 | FEDERAL WAY | Federal Way, WA | 117,010 | 56.5% | 55.8% | 56.5% | 56.5%
8 | NORTHWEST POINT | Elk Grove Village, IL | 176,848 | 100.0% | 100.0% | 100.0% | 100.0%
9 | TIMBERLAKE EAST | Chesterfield, MO | 116,197 | 91.0% | 91.0% | 91.0% | 91.0%
10 | PARK TEN | Houston, TX | 157,460 | 80.3% | 86.8% | 80.3% | 80.3%
11 | MONTAGUE | San Jose, CA | 145,951 | 81.1% | 93.7% | 81.1% | 81.1%
12 | ADDISON | Addison, TX | 293,926 | 97.3% | 95.3% | 95.3% | 96.0%
13 | COLLINS CROSSING | Richardson, TX | 300,472 | 99.5% | 99.5% | 99.5% | 99.5%
14 | GREENWOOD PLAZA | Englewood, CO | 196,236 | 100.0% | 100.0% | 100.0% | 100.0%
15 | RIVER CROSSING | Indianapolis, IN | 205,059 | 99.1% | 99.1% | 97.6% | 97.0%
16 | LIBERTY PLAZA | Addison, TX | 218,934 | 96.0% | 96.0% | 96.0% | 96.0%
17 | INNSBROOK | Glen Allen, VA | 298,456 | 99.9% | 99.9% | 99.9% | 99.9%
18 | 380 INTERLOCKEN | Broomfield, CO | 240,184 | 95.2% | 95.2% | 95.8% | 95.8%
19 | BLUE LAGOON | Miami, FLA | 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 | 100.0% | 100.0% | 100.0% | 100.0%
22 | ONE OVERTON PARK | Atlanta, GA | 387,267 | 98.9% | 98.9% | 98.9% | 98.9%
23 | 390 INTERLOCKEN | Broomfield, CO | 241,516 | 70.1% | 69.8% | 71.2% | 70.5%
24 | EAST BALTIMORE | Baltimore, MD | 325,445 | 81.2% | 81.1% | 81.2% | 81.2%
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 | 136,658 | 100.0% | 100.0% | 92.0% | 97.3%
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 | 475,012 | 90.3% | 90.3% | 90.8% | 90.6%
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% | 97.9% | 97.9% | 97.9%
35 | ONE RAVINIA DRIVE | Atlanta, GA | 386,603 | 93.7% | 93.7% | 93.7% | 93.7%
36 | WESTCHASE I & II | Houston, TX | 629,025 | 97.5% | 97.5% | 97.3% | 97.3%
37 | 1999 BROADWAY | Denver, CO | 676,279 | 92.6% | 92.7% | 87.6% | 89.6%
38 | 999 PEACHTREE | Atlanta, GA | 621,946 | 93.5% | 93.5% | 97.8% | 95.4%
39 | 1001 17th STREET | Denver, CO | 655,420 | 88.5% | 88.5% | 81.1% | 82.2%
| TOTAL WEIGHTED AVERAGE |  | 9,690,361 | 94.1% | 94.3% | 93.3% | 93.4%

(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. |

-11-

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 leased square feet:

| As of September 30, 2014 |  |  |
|  |  | % 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 | Sutherland Asbill Brennan LLP | 243,839 | 2.5% |
5 | Newfield Exploration Company | 234,495 | 2.4% |
6 | US Government (a) | 224,327 | 2.3% |
7 | Burger King Corporation | 212,619 | 2.2% |
8 | Denbury Onshore, LLC | 202,600 | 2.1% |
9 | RGA Reinsurance Company | 197,354 | 2.0% |
10 | SunTrust Bank (b) | 182,888 | 1.9% |
11 | Citicorp Credit Services, Inc | 176,848 | 1.8% |
12 | C.H. Robinson Worldwide, Inc | 153,028 | 1.6% |
13 | T-Mobile South, LLC dba T-Mobile | 151,792 | 1.6% |
14 | Houghton Mifflin Harcourt Publishing Company | 150,050 | 1.5% |
15 | Petrobras America, Inc. | 144,813 | 1.5% |
16 | Murphy Exploration & Production Company | 144,677 | 1.5% |
17 | Argo Data Resource Corporation | 140,246 | 1.4% |
18 | Monsanto Company | 127,778 | 1.3% |
19 | Federal National Mortgage Association | 123,144 | 1.3% |
20 | Vail Corp d/b/a Vail Resorts (c) | 122,232 | 1.3% |
| Total | 3,703,771 | 38.2% |

(a) |  | Includes 180,444 and 4,990 square feet which expire in 2018 & 2014, respectively. The remaining 38,893 square feet expire between 2015 - 2020.

(b) |  | Includes 55,388 square feet which expires October 31, 2016.

(c) |  | Includes 38,293 square feet which expires March 31, 2019. The remaining 83,939 square feet expires March 31, 2023.

-12-

Franklin Street Properties Corp. Earnings Release

Supplementary Schedule H

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 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.