Current Report


 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):  August 10, 2009 (August 10, 2009)

 

GOVERNMENT PROPERTIES INCOME TRUST

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland

(State or Other Jurisdiction of Incorporation)

 

1-34364

 

26-4273474

(Commission File Number)

 

(IRS Employer Identification No.)

 

400 Centre Street, Newton, Massachusetts 02458

(Address of Principal Executive Offices)         (Zip Code)

 

617-219-1440

(Registrant’s Telephone Number, Including Area Code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o                                     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                                     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                                     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                                     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02 Results of Operating Condition.

 

On August 10, 2009, Government Properties Income Trust, or the Company, issued a press release setting forth the Company’s results of operations and financial condition for the quarter and six months ended June 30, 2009, and also provided certain supplemental operating and financial data for the quarter and six months ended June 30, 2009.  Copies of the Company’s press release and supplemental operating and financial data are furnished as Exhibits 99.1 and 99.2 hereto, respectively.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)          Exhibits

 

The Company hereby furnishes the following exhibits:

 

99.1         Press release dated August 10, 2009

99.2         Second Quarter 2009 Supplemental Operating and Financial Data

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

GOVERNMENT PROPERTIES INCOME TRUST

 

 

 

 

 

 

 

By:

/s/ David M. Blackman

 

Name:

David M. Blackman

 

Title:

Treasurer and Chief Financial Officer

 

 

Dated:  August 10, 2009

 

3


Exhibit 99.1

 

400 Centre Street, Newton, MA 02458-2076

tel: (617) 219-1440     fax : (617) 219-1441

 

FOR IMMEDIATE RELEASE

Contacts:

 

Timothy A. Bonang, Director of Investor Relations, or Katherine L. Johnston, Manager of Investor Relations (617) 219-1440

 

Government Properties Income Trust Announces Results for the Periods Ended June 30, 2009

 

Newton, MA (August 10, 2009): Government Properties Income Trust (NYSE: GOV) today announced financial results for the quarter and six months ended June 30, 2009.  GOV completed its initial public offering on June 8, 2009.  Accordingly, GOV’s historical results of operations are not comparable to results which may be expected in future periods.

 

Results for the quarter ended June 30, 2009:

 

Net income available for common shareholders was $5.9 million for the quarter ended June 30, 2009, compared to $8.3 million for the same quarter last year.  Net income per share (EPS) for the quarter ended June 30, 2009 was $0.47.  For the quarter ended June 30, 2008, GOV did not have any outstanding shares.

 

Funds from operations (FFO) for the quarter ended June 30, 2009 was $9.7 million, or $0.78 per share compared to FFO for the quarter ended June 30, 2008 of $11.9 million.

 

The weighted average number of common shares outstanding was 12,384,066, for the quarter ended June 30, 2009.  GOV sold 11,500,000 common shares in an initial public offering on June 8, 2009.  If the initial public offering had occurred on April 1, 2009, GOV’s weighted average number of common shares outstanding would have been 21,450,000.

 

Results for the six months ended June 30, 2009:

 

Net income was $14.4 million for the six months ended June 30, 2009, compared to $16.4 million for the same period last year.  Net income per share (EPS) for the six months ended June 30, 2009 was $1.67.  GOV was formed as a wholly owned subsidiary of and issued 9,950,000 common shares to HRPT Properties Trust on February 17, 2009.

 

A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the New York
Stock Exchange.

No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.

 



 

Funds from operations (FFO) for the six months ended June 30, 2009 was $21.7 million, or $2.53 per share, compared to FFO for the six months ended June 30, 2008 of $23.4 million.

 

The weighted average number of common shares outstanding was 8,590,055 for the six months ended June 30, 2009.  If GOV’s formation transaction and initial public offering had occurred on January 1, 2009, GOV’s weighted average number of common shares outstanding would have been 21,450,000.

 

Initial Public Offering:

 

On June 2, 2009, GOV priced its initial public offering (“IPO”) of 10,000,000 common shares at $20.00 per share.  The IPO closed on June 8, 2009 and GOV received $187,500,000 in net proceeds.  On June 30, 2009, the underwriters exercised their over allotment option, purchasing an additional 1,500,000 common shares at $20.00 per share and GOV received $28,050,000 in net proceeds.  GOV used the full net proceeds from the IPO and the exercise of the over allotment option in the amount of $215,550,000 to repay outstanding borrowings under its $250,000,000 secured credit facility that was established and fully drawn on April 25, 2009.

 

Conference Call:

 

On Monday, August 10, 2009, at 10:00 a.m. Eastern Time, Adam Portnoy, President and Managing Trustee, and David Blackman, Chief Financial Officer, will host a conference call to discuss the second quarter 2009 results.

 

The conference call telephone number is (888) 820-9414.  Participants calling from outside the United States and Canada should dial (913) 312-6684.  No pass code is necessary to access the call from either number.  Participants should dial in about 15 minutes prior to the scheduled start of the call.  A replay of the conference call will be available through 8:00 p.m. Eastern Time on Monday, August 17 th .  To hear the replay, dial (719) 457-0820.  The replay pass code is 1047892.

 

A live audio webcast of the conference call will also be available in a listen only mode on GOV’s website, which is located at www.govreit.com.  Participants wanting to access the webcast should visit the company’s web site about five minutes before the call.  The archived webcast will be available for replay on GOV’s web site for about one week after the call.

 



 

Supplemental Data:

 

A copy of GOV’s Second Quarter 2009 Supplemental Operating and Financial Data is available for download at GOV’s web site, www.govreit.com.

 

Government Properties Income Trust is a real estate investment trust, or REIT, which owns properties located throughout the United States leased primarily to the U.S. Government and several state government tenants.  As of June 30, 2009, GOV owned 29 properties with 3.3 million square feet.  GOV is headquartered in Newton, Massachusetts.

 

Please see the pages attached hereto for a more detailed statement of our operating results and financial condition, along with an explanation of our calculation of FFO.

 



 

Government Properties Income Trust

Condensed Consolidated Statements of Income and Funds from Operations

(amounts in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

19,405

 

$

18,862

 

$

36,648

 

$

37,519

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Real estate taxes

 

2,113

 

1,982

 

4,219

 

3,940

 

Utility expenses

 

1,523

 

1,398

 

3,044

 

2,909

 

Other operating expenses

 

2,912

 

2,842

 

5,711

 

5,672

 

Depreciation and amortization

 

3,797

 

3,520

 

7,361

 

7,018

 

General and administrative

 

873

 

746

 

1,613

 

1,492

 

Total expenses

 

11,218

 

10,488

 

21,948

 

21,031

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

8,187

 

8,374

 

16,700

 

16,488

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

42

 

12

 

44

 

25

 

Interest expense (including amortization of deferred financing fees of $427, $—, $427 and $—, respectively)

 

(2,360

)

(46

)

(2,360

)

(102

)

Net income

 

$

5,869

 

$

8,340

 

$

14,384

 

$

16,411

 

 

 

 

 

 

 

 

 

 

 

Calculation of Funds from Operations, or FFO (1) :

 

 

 

 

 

 

 

 

 

Net income

 

$

5,869

 

$

8,340

 

$

14,384

 

$

16,411

 

Plus: depreciation and amortization

 

3,797

 

3,520

 

7,361

 

7,018

 

FFO

 

$

9,666

 

$

11,860

 

$

21,745

 

$

23,429

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

12,384

 

 

8,590

 

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

Net income

 

$

0.47

 

 

$

1.67

 

 

FFO

 

$

0.78

 

 

$

2.53

 

 

 


(1) We compute FFO as shown in the calculations above.  Our calculation of FFO is consistent with the National Association of Real Estate Investment Trusts, or NAREIT, definition of FFO.  We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities.  We believe that FFO provides useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO can facilitate a comparison of operating performance between historical periods and among REITs.  FFO does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity.  FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders.  Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving credit facility and the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance.

 



 

Government Properties Income Trust

Condensed Consolidated Balance Sheets

(amounts in thousands, except share data)

(unaudited)

 

 

 

June 30,

 

December 31,

 

 

 

2009

 

2008

 

ASSETS

 

 

 

 

 

Real estate properties:

 

 

 

 

 

Land

 

$

65,719

 

$

65,719

 

Buildings and improvements

 

425,183

 

424,756

 

 

 

490,902

 

490,475

 

Accumulated depreciation

 

(106,070

)

(100,034

)

 

 

384,832

 

390,441

 

Acquired real estate leases, net

 

9,252

 

10,071

 

Cash and cash equivalents

 

451

 

97

 

Restricted cash

 

 

1,334

 

Deferred leasing costs, net

 

1,538

 

1,757

 

Deferred financing costs, net

 

6,458

 

 

Rents receivable

 

6,872

 

14,593

 

Due from affiliates

 

943

 

 

Other assets, net

 

1,677

 

1,481

 

Total assets

 

$

412,023

 

$

419,774

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS EQUITY

 

 

 

 

 

Mortgage notes payable

 

$

 

$

134

 

Secured credit facility

 

43,875

 

 

Accounts payable and accrued expenses

 

5,795

 

3,036

 

Acquired real estate lease obligations, net

 

2,750

 

3,151

 

 

 

52,420

 

6,321

 

Shareholders’ equity:

 

 

 

 

 

Common shares of beneficial interest, $.01 par value:

 

 

 

 

 

25,000,000 shares authorized; 21,450,000 shares issued and outstanding

 

215

 

 

Additional paid in capital

 

357,444

 

 

Cumulative net income

 

1,944

 

 

Ownership interest

 

 

413,453

 

Total shareholders’ equity

 

359,603

 

413,453

 

 

 

 

 

 

 

Total liabilities and shareholders equity

 

$

412,023

 

$

419,774

 

 


Exhibit 99.2

 

 

GOVERNMENT PROPERTIES

INCOME TRUST

 

Second Quarter 2009

 

Supplemental Operating and Financial Data

 

All amounts in this report are unaudited, except as noted.

 



 

TABLE OF CONTENTS

 

 

Page

 

 

CORPORATE INFORMATION

 

 

 

Company Profile

5

Investor Information

6

Research Coverage

7

 

 

FINANCIAL INFORMATION

 

 

 

Key Financial Data

9

Consolidated Balance Sheets

10

Consolidated Statements of Income

11

Consolidated Statements of Cash Flows

12

Calculation of EBITDA

13

Calculation and Reconciliation of Property Net Operating Income (NOI)

14

Calculation of Funds from Operations (FFO)

15

Debt Summary

16

Leverage Ratios and Coverage Ratios

17

Tenant Improvements, Leasing Costs and Capital Improvements

18

 

 

PROPERTY AND LEASING INFORMATION

 

 

 

Property Schedule

20

Tenants List

21

Occupancy and Leasing Summary

22

Portfolio Lease Expiration Schedule

23

 



 

WARNING REGARDING

FORWARD LOOKING STATEMENTS

 

THIS SUPPLEMENTAL OPERATING AND FINANCIAL DATA CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS.  WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS.  THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR.  FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:

 

·

THE CREDIT QUALITY OF OUR TENANTS,

 

 

·

THE LIKELIHOOD THAT OUR TENANTS WILL PAY RENT, RENEW LEASES, SIGN NEW LEASES OR BE AFFECTED BY CYCLICAL ECONOMIC CONDITIONS,

 

 

·

OUR FUTURE ACQUISITION AND SALE OF PROPERTIES,

 

 

·

OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,

 

 

·

OUR ABILITY TO PAY DISTRIBUTIONS TO SHAREHOLDERS AND THE EXPECTED AMOUNTS THEREOF,

 

 

·

OUR POLICIES AND PLANS REGARDING INVESTMENTS AND FINANCINGS,

 

 

·

THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY,

 

 

·

OUR ABILITY TO RAISE EQUITY OR DEBT CAPITAL, AND

 

 

·

OTHER MATTERS.

 

OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS.  FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FORWARD LOOKING STATEMENTS AND UPON OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION, FUNDS FROM OPERATIONS, CASH AVAILABLE FOR DISTRIBUTION, CASH FLOWS, LIQUIDITY AND PROSPECTS INCLUDE, BUT ARE NOT LIMITED TO:

 

·

CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS,

 

 

·

COMPETITION WITHIN THE REAL ESTATE INDUSTRY, AND

 

 

·

CHANGES IN FEDERAL, STATE AND LOCAL LEGISLATION, GOVERNMENTAL REGULATIONS, ACCOUNTING TREATMENT, TAX LAWS AND SIMILAR MATTERS.

 

FOR EXAMPLE:

 

·

IF THE AVAILABILITY OF DEBT CAPITAL REMAINS RESTRICTED OR BECOMES MORE RESTRICTED, WE MAY BE UNABLE TO REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE OR TO REFINANCE ON TERMS WHICH ARE AS FAVORABLE AS WE NOW HAVE,

 

 

·

WE MAY BE UNABLE TO IDENTIFY PROPERTIES WHICH WE WANT TO BUY OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES,

 

 

·

OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS DEPENDS UPON OUR FUTURE EARNINGS, AND

 

 

·

OTHER RISKS MAY ADVERSELY IMPACT US, AS DESCRIBED MORE FULLY IN OUR PROSPECTUS DATED JUNE 2, 2009, UNDER “RISK FACTORS”, WHICH IS ACCESSIBLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.

 

THESE RESULTS COULD OCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH, SUCH AS GOVERNMENT TENANTS’ NEEDS FOR LEASED SPACE, OR CHANGES IN THE CAPITAL MARKETS OR THE ECONOMY GENERALLY, ARE BEYOND OUR CONTROL.

 



 

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS.

 

EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

 



 

CORPORATE INFORMATION

 



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

COMPANY PROFILE

 

The Company:

 

Government Properties Income Trust, or GOV, is a real estate investment trust, or REIT, which primarily owns buildings majority leased to government tenants located throughout the United States.  The majority of our properties are commercial office buildings located in suburban areas and central business districts, or CBDs, of major metropolitan markets.  As of June 30, 2009, we owned approximately 3.3 million square feet comprising 29 properties, of which 25 are primarily leased to the U.S. Government and 4 are leased to the state governments of California, Maryland, Minnesota and South Carolina.  GOV was formed in February 2009 and became a public company on June 8, 2009.

 

Strategy:

 

Our primary business strategy is to maintain our properties, seek to renew our leases as they expire, selectively acquire additional properties that are majority leased to government tenants and to pay distributions to shareholders.  As current leases expire, we will attempt to renew our leases with our existing tenants or enter into leases with new tenants, in both circumstances at rents which are equal to or greater than the rents we now receive.  Our ability to renew leases with our existing tenants or to enter into new leases with new tenants and the rents we are able to charge will be dependent in large part upon market conditions which are generally beyond our control.  Although we sometimes sell properties, we generally consider ourselves to be a long term investor and are more interested in the long term earnings potential of our properties than selling properties for short term gains.  We currently do not have any investments in off balance sheet entities.

 

Management:

 

GOV is managed by Reit Management & Research LLC, or RMR.  RMR is a real estate management company which was founded in 1986 to manage public investments in real estate.  As of June 30, 2009, RMR managed one of the largest portfolios of publicly owned real estate in the North America, including nearly 1,350 properties, located in 45 states, Washington, DC, Puerto Rico and Ontario, Canada.  RMR has approximately 570 employees in its headquarters and regional offices located throughout the country.  In addition to managing GOV, RMR also manages HRPT Properties Trust, or HRP, a publicly traded REIT that owns office and industrial properties, our former 100% parent company which continues to own approximately 46.4% of our outstanding shares.  RMR also manages Hospitality Properties Trust, or HPT, a publicly traded REIT that owns hotels and travel centers, and Senior Housing Properties Trust, or SNH, a publicly traded REIT that primarily owns healthcare properties.  RMR also provides management services to Five Star Quality Care, Inc., a healthcare services company which is a tenant of SNH, and to Travel Centers of America, LLC, an operator of travel centers which is a tenant of HPT.  An affiliate of RMR, RMR Advisors, Inc., is the investment manager of publicly offered mutual funds, which principally invests in securities of unaffiliated real estate companies.  The public companies managed by RMR and its affiliates had combined total gross assets of approximately $16.3 billion as of June 30, 2009.  We believe that being managed by RMR is a competitive advantage for GOV because RMR provides us with a depth and quality of management and experience which may be unequaled in the real estate industry.  We also believe RMR provides management services to GOV at costs that are lower than we would have to pay for similar quality services.

 

Corporate Headquarters:

 

400 Centre Street

Newton, MA  02458

(t)  (617) 219-1440

(f)  (617) 796-8267

 

Stock Exchange Listing:

 

New York Stock Exchange

 

Trading Symbols:

 

Common Stock — GOV

 

Portfolio Data (as of 6/30/09):

 

Total properties

 

29

 

Total sq. ft. (000s)

 

3,304

 

Percent leased

 

99.3

%

 

5



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

INVESTOR INFORMATION

 

Board of Trustees

 

 

Barry M. Portnoy

 

Adam D. Portnoy

 

 

Managing Trustee

 

Managing Trustee

 

 

 

 

 

 

 

John L. Harrington

 

Jeffrey P. Somers

 

 

Independent Trustee

 

Independent Trustee

 

 

 

 

 

 

 

Barbara D. Gilmore

 

 

 

 

Independent Trustee

 

 

 

 

Senior Management

 

 

Adam D. Portnoy

 

David M. Blackman

 

 

President

 

Treasurer & Chief Financial Officer

 

 

Contact Information

 

 

Investor Relations

Government Properties Income Trust

400 Centre Street

Newton, MA  02458

(t) (617) 219-1440

(f) (617) 796-8267

(e-mail) info@govreit.com

(website) www.govreit.com

 

Inquiries

Financial inquiries should be directed to David M. Blackman, Treasurer and Chief Financial Officer, at (617) 219-1440 or dblackman@govreit.com.

 

Investor and media inquiries should be directed to Timothy A. Bonang, Director of Investor Relations, at (617) 796-8222 or tbonang@govreit.com, or Katherine L. Johnston, Manager of Investor Relations, at (617) 796-8222 or kjohnston@govreit.com.

 

6



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

RESEARCH COVERAGE

 

Equity Research Coverage

 

 

B.G.B. Securities

 

Banc of America Merril Lynch Research

 

David Shapiro

 

James Feldman

 

(703) 528-5782

 

(212) 449-6255

 

 

 

 

 

Morgan Keegan

 

RBC Capital Markets

 

Jason Payne

 

David Rodgers

 

(901) 531-3327

 

(440) 715-2647

 

 

 

 

 

Wells Fargo Securities

 

 

 

Brendan Maiorana

 

 

 

(443) 263-6516

 

 

 

GOV is followed by the analysts listed above.  Please note that any opinions, estimates or forecasts regarding GOV’s performance made by these analysts do not represent opinions, forecasts or predictions of GOV or its management.  GOV does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts .

 

7



 

FINANCIAL INFORMATION

 



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

KEY FINANCIAL DATA (1)

(amounts in thousands, except per share data)

 

 

 

As of and For the Three Months Ended

 

 

 

6/30/2009

 

3/31/2009

 

12/31/2008

 

9/30/2008

 

6/30/2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding (at end of period)

 

21,450

 

9,950

 

 

 

 

 

 

 

Weighted average common shares outstanding (2)

 

12,384

 

4,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

Price at end of period

 

$

20.53

 

 

 

 

 

 

 

 

 

High during period

 

$

20.53

 

 

 

 

 

 

 

 

 

Low during period

 

$

17.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

412,023

 

$

417,159

 

$

419,774

 

$

423,986

 

$

424,053

 

Total liabilities

 

$

52,420

 

$

5,515

 

$

6,321

 

$

8,682

 

$

8,399

 

Gross book value of real estate assets (3)

 

$

502,696

 

$

502,330

 

$

502,269

 

$

500,763

 

$

500,258

 

Total debt / gross book value of real estate (3)

 

8.7

%

0.0

%

0.0

%

0.3

%

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Book Capitalization:

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

$

43,875

 

$

 

$

134

 

$

1,537

 

$

1,931

 

Plus: total stockholders’ equity

 

359,603

 

411,644

 

413,453

 

413,304

 

415,654

 

Total book capitalization

 

$

403,478

 

$

411,644

 

$

413,587

 

$

414,841

 

$

417,585

 

Total debt / total book capitalization

 

10.9

%

0.0

%

0.0

%

0.4

%

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Market Capitalization:

 

 

 

 

 

 

 

 

 

 

 

Total debt (book value)

 

$

43,875

 

 

 

 

 

 

 

 

 

Plus: market value of common shares (at end of period)

 

440,369

 

 

 

 

 

 

 

 

 

Total market capitalization

 

$

484,244

 

 

 

 

 

 

 

 

 

Total debt / total market capitalization

 

9.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

19,405

 

$

19,243

 

$

19,468

 

$

18,438

 

$

18,862

 

EBITDA (4)

 

$

12,026

 

$

12,079

 

$

11,795

 

$

10,804

 

$

11,906

 

Property net operating income (NOI) (5)

 

$

12,857

 

$

12,817

 

$

12,536

 

$

11,544

 

$

12,689

 

NOI margin (6)

 

66.3

%

66.6

%

64.4

%

62.6

%

67.3

%

Net income

 

$

5,869

 

$

8,515

 

$

8,169

 

$

7,227

 

$

8,340

 

Funds from operations (FFO) (7)

 

$

9,666

 

$

12,079

 

$

11,781

 

$

10,778

 

$

11,860

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

0.47

 

$

1.79

 

 

 

 

 

 

 

FFO (7)

 

$

0.78

 

$

2.54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coverage Ratios:

 

 

 

 

 

 

 

 

 

 

 

EBITDA (4) / interest expense

 

5.1x

 

nm

 

nm

 

nm

 

nm

 

 


(1)

 

GOV became a public company on June 8, 2009 and will declare and pay its first quarterly dividend when it declares and pays its dividend for Q3 2009.

(2)

 

GOV was formed in February 2009 and has no outstanding share equivalents, such as units, convertible debt or stock options.

(3)

 

Gross book value of real estate assets is real estate properties, at cost, including purchase price allocations less impairment writedowns, if any.

(4)

 

See page 13 for calculation of EBITDA.

(5)

 

Property net operating income, or NOI, is defined as rental income from real estate less property operating expenses; see page 14 for calculation of NOI and reconciliation of NOI to Net Income.

(6)

 

NOI margin is defined as property net operating income, or NOI, as a percentage of rental income.

(7)

 

See page 15 for calculation of FFO and FFO per share.

 

9



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

 

 

 

As of

 

As of

 

 

 

6/30/2009

 

12/31/2008

 

 

 

 

 

(audited)

 

ASSETS

 

 

 

 

 

Real estate properties:

 

 

 

 

 

Land

 

$

65,719

 

$

65,719

 

Buildings and improvements

 

425,183

 

424,756

 

 

 

490,902

 

490,475

 

Accumulated depreciation

 

(106,070

)

(100,034

)

 

 

384,832

 

390,441

 

 

 

 

 

 

 

Acquired real estate leases, net

 

9,252

 

10,071

 

Cash and cash equivalents

 

451

 

97

 

Restricted cash

 

 

1,334

 

Rents receivable

 

6,872

 

14,593

 

Deferred leasing costs, net

 

1,538

 

1,757

 

Deferred financing costs, net

 

6,458

 

 

Due from affiliates

 

943

 

 

Other assets, net

 

1,677

 

1,481

 

Total assets

 

$

412,023

 

$

419,774

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Mortgage notes payable

 

$

 

$

134

 

Secured revolving credit facility

 

43,875

 

 

Accounts payable and accrued expenses

 

5,795

 

3,036

 

Acquired real estate lease obligations, net

 

2,750

 

3,151

 

Total liabilities

 

52,420

 

6,321

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common shares of beneficial interest, $0.01 par value: 25,000,000 shares authorized; 21,450,000 shares issued and outstanding

 

215

 

 

Additional paid in capital

 

357,444

 

 

Cumulative net income

 

1,944

 

 

Ownership interest

 

 

413,453

 

Total shareholders’ equity

 

359,603

 

413,453

 

Total liabilities and shareholders’ equity

 

$

412,023

 

$

419,774

 

 

10



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except per share data)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2009

 

6/30/2008

 

6/30/2009

 

6/30/2008

 

 

 

 

 

 

 

 

 

 

 

Rental income (1)

 

$

19,405

 

$

18,862

 

$

38,648

 

$

37,519

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Real estate taxes

 

2,113

 

1,982

 

4,219

 

3,940

 

Utility expenses

 

1,523

 

1,398

 

3,044

 

2,909

 

Other operating expenses

 

2,912

 

2,842

 

5,711

 

5,672

 

Depreciation and amortization

 

3,797

 

3,520

 

7,361

 

7,018

 

General and administrative

 

873

 

746

 

1,613

 

1,492

 

Total expenses

 

11,218

 

10,488

 

21,948

 

21,031

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

8,187

 

8,374

 

16,700

 

16,488

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

42

 

12

 

44

 

25

 

Interest expense (including amortization of deferred financing fees of $427, $ - , $427 and $-, respectively)

 

(2,360

)

(46

)

(2,360

)

(102

)

Net income

 

$

5,869

 

$

8,340

 

$

14,384

 

$

16,411

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

12,384

 

 

8,590

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Net income

 

$

0.47

 

N/A

 

$

1.67

 

N/A

 

 

 

 

 

 

 

 

 

 

 

Additional Data:

 

 

 

 

 

 

 

 

 

General and administrative expenses / rental income

 

4.50

%

3.96

%

4.17

%

3.98

%

General and administrative expenses / total assets (at end of period)

 

0.21

%

0.18

%

0.39

%

0.35

%

 

 

 

 

 

 

 

 

 

 

Non cash straight line rent adjustments (FAS 13) (1)

 

$

(109

)

$

(12

)

$

(225

)

$

(29

)

Lease value amortization (FAS 141) (1)

 

$

(209

)

$

(209

)

$

(418

)

$

(387

)

Lease termination fees included in rental income

 

$

 

$

 

$

 

$

 

Capitalized interest expense

 

$

 

$

 

$

 

$

 

 


(1)

We report rental income on a straight line basis over the terms of the respective leases; rental income includes non-cash straight line rent adjustments. Rental income also includes non-cash amortization of intangible lease assets and liabilities.

 

11



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2009

 

6/30/2008

 

6/30/2009

 

6/30/2008

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

5,869

 

$

8,340

 

$

14,384

 

$

16,411

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

4,139

 

3,434

 

7,617

 

6,835

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

 

Decrease in restricted cash

 

 

609

 

1,334

 

46

 

Increase in deferred leasing costs

 

 

(163

)

 

(294

)

Increase (decrease) in accounts receivable

 

189

 

(73

)

(326

)

(306

)

(Increase) decrease in other assets

 

(361

)

1,115

 

(196

)

1,549

 

(Decrease) increase in accounts payable and accrued expenses

 

(788

)

775

 

(1,072

)

133

 

Increase in due to affiliates

 

(1,343

)

 

(1,343

)

 

Cash provided by operating activities

 

7,705

 

14,037

 

20,398

 

24,374

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Real estate acquisitions and improvements

 

(407

)

(335

)

(1,176

)

(1,118

)

Cash provided used for investing activities

 

(407

)

(335

)

(1,176

)

(1,118

)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Repayment of mortgage loans

 

 

(1,277

)

(134

)

(1,661

)

Borrowings on secured credit facility

 

272,000

 

 

272,000

 

 

Costs of establishing secured credit facility

 

(6,235

)

 

(6,235

)

 

Payments on secured credit facility

 

(228,125

)

 

(228,125

)

 

Proceeds from issuance of common stock, net

 

209,389

 

 

209,389

 

 

Equity distributions

 

(255,442

)

(12,784

)

(265,763

)

(21,304

)

Cash used for financing activities

 

(8,413

)

(14,061

)

(18,868

)

(22,965

)

 

 

 

 

 

 

 

 

 

 

(Decrease) Increase in cash and cash equivalents

 

(1,115

)

(359

)

354

 

291

 

Cash and cash equivalents at beginning of period

 

1,566

 

716

 

97

 

66

 

Cash and cash equivalents at end of period

 

$

451

 

$

357

 

$

451

 

$

357

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Interest paid

 

$

1,932

 

$

91

 

$

1,932

 

$

111

 

 

 

 

 

 

 

 

 

 

 

Non-cash operating activities

 

 

 

 

 

 

 

 

 

Equity distributions

 

$

8,047

 

$

 

$

8,047

 

$

 

 

 

 

 

 

 

 

 

 

 

Non-cash financing activities:

 

 

 

 

 

 

 

 

 

Costs of establishing credit facility

 

$

650

 

$

 

$

650

 

$

 

Costs for issuance of common stock

 

3,813

 

 

3,813

 

 

 

12



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

CALCULATION OF EBITDA

(amounts in thousands)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2009

 

6/30/2008

 

6/30/2009

 

6/30/2008

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

5,869

 

$

8,340

 

$

14,384

 

$

16,411

 

Plus: interest expense

 

2,360

 

46

 

2,360

 

102

 

Plus: depreciation and amortization

 

3,797

 

3,520

 

7,361

 

7,018

 

EBITDA

 

$

12,026

 

$

11,906

 

$

24,105

 

$

23,531

 

 

We compute EBITDA, or earnings before interest, taxes, depreciation and amortization, as net income plus interest expense, income tax expense, if any, and depreciation and amortization.  We consider EBITDA to be an appropriate measure of our performance, along with net income and cash flow from operating, investing and financing activities.  We believe EBITDA provides useful information to investors because by excluding the effects of certain historical costs, such as interest expense and depreciation and amortization expense, EBITDA can facilitate a comparison of our current operating performance with our past operating performance and of operating performances among REITs.  EBITDA does not represent cash generated by operating activities in accordance with generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity.  Also, some REITs may calculate EBITDA differently than us.

 

13



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

CALCULATION AND RECONCILIATION OF PROPERTY NET OPERATING INCOME (NOI)

(amounts in thousands)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2009

 

6/30/2008

 

6/30/2009

 

6/30/2008

 

 

 

 

 

 

 

 

 

 

 

Calculation of NOI:

 

 

 

 

 

 

 

 

 

Rental income (1)

 

$

19,405

 

$

18,862

 

$

38,648

 

$

37,519

 

Operating expenses

 

(6,548

)

(6,222

)

(12,974

)

(12,521

)

Property net operating income (NOI)

 

$

12,857

 

$

12,640

 

$

25,674

 

$

24,998

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of NOI to Net Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property net operating income

 

$

12,857

 

$

12,640

 

$

25,674

 

$

24,998

 

Depreciation and amortization

 

(3,797

)

(3,520

)

(7,361

)

(7,018

)

General and administrative

 

(873

)

(746

)

(1,613

)

(1,492

)

Operating income

 

8,187

 

8,374

 

16,700

 

16,488

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

42

 

12

 

44

 

25

 

Interest expense

 

(2,360

)

(46

)

(2,360

)

(102

)

Net income

 

$

5,869

 

$

8,340

 

$

14,384

 

$

16,411

 

 


(1)

Includes non cash straight line rent of approximately ($109,000) and ($12,000) for the three months ended June 30, 2009 and 2008, respectively and ($225,000) and ($29,000) for the six months ended June 30, 2009 and 2008, respectively.

 

We compute NOI as shown above.  We consider NOI to be an appropriate supplemental measure to net income because it helps both investors and management to understand the operations of our properties.  We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are incurred at the property level.  Our management also uses NOI to evaluate individual and company wide property level performance.  NOI excludes certain components from the calculation of net income in order to provide results that are more closely related to our properties’ results of operations.  NOI does not represent cash generated by operating activities in accordance with GAAP, and should not be considered an alternative to net income, net income available or cash flow from operating activities as a measure of financial performance.

 

14



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

CALCULATION OF FUNDS FROM OPERATIONS (FFO)

(amounts in thousands, except per share data)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

6/30/2009

 

6/30/2008

 

6/30/2009

 

6/30/2008

 

 

 

 

 

 

 

 

 

 

 

Net income (1)

 

$

5,869

 

$

8,340

 

$

14,384

 

$

16,411

 

Plus: depreciation and amortization

 

3,797

 

3,520

 

7,361

 

7,018

 

FFO available for common shareholders

 

$

9,666

 

$

11,860

 

$

21,745

 

$

23,429

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

12,384

 

 

8,590

 

 

 

 

 

 

 

 

 

 

 

 

FFO available for common shareholders per share

 

$

0.78

 

N/A

 

$

2.53

 

N/A

 

 


(1)

Includes non cash straight line rent of approximately ($109,000) and ($12,000) for the three months ended June 30, 2009 and 2008, respectively and ($225,000) and ($29,000) for the six months ended June 30, 2009 and 2008, respectively.

 

We compute FFO as shown above.  Our calculation of FFO is consistent with the National Association of Real Estate Investment Trusts, or NAREIT, definition of FFO.  We consider FFO to be an appropriate measure of performance for a REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO can facilitate a comparison of operating performances among REITs.  FFO does not represent cash generated by operating activities in accordance with GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity.  FFO is one important factor considered by our Board of Trustees in determining the amount of distributions to shareholders.  Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our secured revolving credit facility, the availability of debt and equity capital to us and our expectations of future capital requirements and operating performance.

 

15



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

DEBT SUMMARY

(dollars in thousands)

 

 

 

 

 

Interest

 

Principal

 

Maturity

 

Due at

 

Years to

 

 

 

 

 

Rate

 

Balance

 

Date

 

Maturity

 

Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250 million secured revolving credit facility

 

(LIBOR, subject to a 2.00% floor, or another specified index plus a margin, which varies based upon our leverage)

 

5.25

%

$

43,875

 

4/24/2012

 

$

43,875

 

2.8

 

 

16



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

LEVERAGE RATIOS AND COVERAGE RATIOS

 

 

 

As of and For the
Three Months
Ended

 

 

 

6/30/2009

 

 

 

 

 

Leverage Ratios:

 

 

 

 

 

 

 

Total debt / total assets

 

10.6

%

Total debt / gross book value of real estate assets (1)

 

8.7

%

Total debt / total market capitalization

 

9.1

%

Total debt / total book capitalization

 

10.9

%

Secured debt / total assets

 

10.6

%

 

 

 

 

Coverage Ratios:

 

 

 

 

 

 

 

EBITDA / interest expense

 

5.1

x

 


(1)          Gross book value of real estate assets is real estate properties, at cost, including purchase price allocations less impairment writedowns, if any.

 

17



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

TENANT IMPROVEMENTS, LEASING COSTS AND CAPITAL IMPROVEMENTS

(dollars and sq. ft. in thousands, except per sq. ft. data)

 

 

 

For the Three Months Ended

 

 

 

6/30/2009

 

3/31/2009

 

12/31/2008

 

9/30/2008

 

6/30/2008

 

Tenant improvements (TI)

 

$

233

 

$

555

 

$

79

 

$

465

 

$

173

 

Leasing costs (LC)

 

 

 

210

 

22

 

164

 

Total TI and LC

 

233

 

555

 

289

 

487

 

337

 

 

 

 

 

 

 

 

 

 

 

 

 

Building improvements (1)

 

133

 

23

 

24

 

 

24

 

Development, redevelopment and other activities (2)

 

 

 

236

 

 

16

 

Total capital improvements, including TI and LC

 

$

366

 

$

578

 

$

549

 

$

487

 

$

377

 

 

 

 

 

 

 

 

 

 

 

 

 

Sq. ft. beginning of period

 

3,304

 

3,304

 

3,294

 

3,294

 

3,294

 

Sq. ft. end of period (3)

 

3,304

 

3,304

 

3,304

 

3,294

 

3,294

 

Average sq. ft. during period

 

3,304

 

3,304

 

3,299

 

3,294

 

3,294

 

 

 

 

 

 

 

 

 

 

 

 

 

Building improvements per average sq. ft. during period

 

$

0.04

 

$

0.01

 

$

0.01

 

$

 

$

0.01

 

 


(1)

Building improvements generally include construction costs, expenditures to replace obsolete building components, and expenditures that extend the useful life of existing assets.

(2)

Development, redevelopment and other activities generally include non-recurring expenditures or expenditures that we believe increase the value of our existing properties.

(3)

Sq. ft. changes resulted from the acquisition of an approximately 10,000 sq. ft. property.

 

18



 

PROPERTY AND LEASING INFORMATION

 



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

PROPERTY SCHEDULE

(dollars in thousands)

 

 

 

 

 

 

 

 

 

% NOI

 

 

 

 

 

 

 

 

 

Three Months

 

 

Location

 

Sq Ft.

 

% Sq. Ft.

 

% Rental Income(1)

 

ended 6/30/09 (2)

 

201 Indianola Avenue, Phoenix AZ

 

97,145

 

2.9

%

4.8

%

4.8

%

9797 Aero Drive, San Diego CA

 

94,272

 

2.9

%

2.5

%

1.9

%

4560 Viewridge Road, San Diego CA

 

147,955

 

4.4

%

4.2

%

4.5

%

9174 Sky Park Centre, San Diego CA

 

43,918

 

1.3

%

1.4

%

1.5

%

5045 East Butler Ave, Fresno CA

 

531,976

 

16.1

%

11.8

%

15.0

%

16194 West 45th Street, Golden CO

 

43,232

 

1.3

%

2.0

%

1.9

%

7201 West Mansfield, Lakewood CO

 

71,208

 

2.2

%

2.2

%

2.3

%

7301 West Mansfield, Lakewood CO

 

70,904

 

2.1

%

2.1

%

2.4

%

7401 West Mansfield, Lakewood CO

 

70,884

 

2.1

%

2.4

%

2.5

%

10 

20 Massachusetts Avenue, Washington DC

 

339,541

 

10.3

%

18.8

%

18.3

%

11 

1 Corporate Boulevard, Atlanta, GA

 

37,554

 

1.1

%

0.8

%

0.7

%

12 

8 Corporate Boulevard, Atlanta GA

 

151,252

 

4.6

%

4.9

%

4.1

%

13 

10 Corporate Boulevard, Atlanta GA

 

32,828

 

1.0

%

0.7

%

0.6

%

14 

11 Corporate Boulevard, Atlanta GA

 

32,158

 

1.0

%

0.7

%

0.6

%

15 

12 Corporate Boulevard, Atlanta GA

 

99,084

 

3.0

%

2.2

%

2.1

%

16 

12 Executive Park Drive, Atlanta GA

 

128,390

 

3.9

%

4.1

%

4.1

%

17 

20400 Century Boulevard, Germantown MD

 

80,550

 

2.4

%

1.7

%

2.2

%

18 

1401 Rockville Pike, Rockville MD

 

188,444

 

5.7

%

8.5

%

8.8

%

19 

4201 Patterson Ave, Baltimore MD

 

84,674

 

2.6

%

1.6

%

1.3

%

20 

2645 and 2655 Long Lake Road, Roseville MN

 

61,426

 

1.9

%

1.4

%

1.2

%

21 

4241 & 4300 NE 34th Street, Kansas City MO

 

98,073

 

3.0

%

1.9

%

3.0

%

22 

130-138 Delaware Avenue, Buffalo NY

 

124,647

 

3.8

%

3.8

%

2.9

%

23 

110 Centerview Drive, Columbia SC

 

71,580

 

2.2

%

1.3

%

1.3

%

24 

701 Clay Rd., Waco TX

 

137,782

 

4.2

%

2.8

%

1.9

%

25 

5600 Columbia Pike, Falls Church VA

 

164,746

 

5.0

%

4.8

%

4.0

%

26 

2420 Stevens Center Place, Richland WA

 

92,914

 

2.8

%

2.5

%

2.8

%

27 

2430 Stevens Center Place, Richland WA

 

47,238

 

1.4

%

1.3

%

1.4

%

28 

882 TJ Jackson Drive, Falling Waters WV

 

36,818

 

1.1

%

0.9

%

0.3

%

29 

5353 Yellowstone Road, Cheyenne WY

 

122,647

 

3.7

%

1.9

%

1.6

%

 

 

 

3,303,840

 

100.0

%

100.0

%

100.0

%

 


(1)

Rental income is the annualized rent from tenants pursuant to signed leases as of 6/30/2009, plus expense reimbursements; excludes lease value amortization.

(2)

Property net operating income, or NOI, is defined as property rental income less property operating expenses; see page 14 for the calculation and reconciliation of NOI to Net Income.

 

We compute NOI as shown above.  We consider NOI to be an appropriate supplemental measure to net income because it helps both investors and management to understand the operations of our properties.  We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are incurred at the property level.  Our management also uses NOI to evaluate individual and company wide property level performance.  NOI excludes certain components from the calculation of net income in order to provide results that are more closely related to our properties’ results of operations.  NOI does not represent cash generated by operating activities in accordance with GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance.

 

20



 

Government Properties Income Trust

Supplemental Operating and Financial Data

June 30, 2009

 

TENANT LIST

(sq. ft. in thousands)

 

 

 

 

 

% of Total

 

% of Rental

 

Tenant

 

Sq. Ft. (1)

 

Sq. Ft. (1)

 

Income (2)

 

 

US Government:

 

 

 

 

 

 

 

1  

Centers for Disease Control

 

481

 

15

%

13

%

2  

Internal Revenue Service

 

532

 

16

%

12

%

3  

Department of Justice

 

229

 

7

%

12

%

4  

Immigration and Customs Enforcement

 

235

 

7

%

11

%

5  

Federal Bureau of Investigation

 

191

 

6

%

7

%

6  

Department of Energy

 

206

 

6

%

6

%

7  

Food and Drug Administration

 

101

 

3

%

5

%

8  

Defense Information Systems Agency

 

163

 

5

%

5

%

9  

Bureau of Reclamation

 

142

 

4

%

4

%

10  

Drug Enforcement Administration

 

148

 

4

%

4

%

11  

Veteran’s Affairs

 

175

 

5

%

4

%

12  

Department of the Interior

 

71

 

2

%

2

%

13  

Environmental Protection Agency

 

43

 

1

%

2

%

14  

Bureau of Land Management

 

123

 

4

%

2

%

15  

Financial Management Service

 

88

 

3

%

2

%

 

 

 

 

 

 

 

 

 

 

State Government:

 

 

 

 

 

 

 

1  

State of Maryland Health & Human Services

 

85

 

3

%

2

%

2  

State of Minnesota - Lottery

 

61

 

2

%

1

%

3  

State of California - Department of Motor Vehicles & Department of Water Quality Control

 

44

 

1

%

1

%

4  

State of South Carolina

 

72

 

2

%

1

%