Government Properties Income Trust (NYSE: GOV) today announced its financial results for the quarter and year ended December 31, 2011. Results for the Quarter Ended December 31, 2011: Normalized funds from operations, or Normalized FFO, for the quarter ended December 31, 2011 were $26.1 million, or $0.56 per share, compared to Normalized FFO of $19.2 million, or $0.47 per share, for the quarter ended December 31, 2010. Net income for the quarter ended December 31, 2011 was $13.2 million, or $0.28 per share, compared to $6.5 million, or $0.16 per share, for the quarter ended December 31, 2010. Net income for the quarter ended December 31, 2010 included a $3.8 million, or $0.09 per share, loss on extinguishment of debt. GOV’s weighted average number of common shares outstanding was 47,051,650 and 40,500,800 for the quarters ended December 31, 2011 and 2010, respectively. A reconciliation of net income determined according to U.S. generally accepted accounting principles, or GAAP, to funds from operations, or FFO, and Normalized FFO for the quarters ended December 31, 2011 and 2010 appears later in this press release. Results for the Year Ended December 31, 2011: Normalized FFO for the year ended December 31, 2011 were $89.6 million, or $2.07 per share, compared to $61.6 million, or $1.79 per share, for the year ended December 31, 2010. Net income for the year ended December 31, 2011 was $46.0 million, or $1.06 per share, compared to $27.8 million, or $0.81 per share, for the year ended December 31, 2010. Net income for the year ended December 31, 2010 included a $3.8 million, or $0.11 per share, loss on extinguishment of debt. GOV’s weighted average number of common shares outstanding was 43,368,364 and 34,340,677 for the years ended December 31, 2011 and 2010, respectively. A reconciliation of net income determined according to GAAP to FFO and Normalized FFO for the years ended December 31, 2011 and 2010 appears later in this press release.
Recent Investment Activities:Since October 1, 2011, GOV has acquired four properties for an aggregate purchase price of $115.9 million, including the assumption of $49.4 million of mortgage debt and excluding acquisition costs, as follows:
- In October 2011, GOV acquired three previously disclosed office properties located in Indianapolis, IN with 433,927 rentable square feet. These properties are 94% leased to 15 tenants, of which 56% is leased to the U.S. Government and occupied by the U.S. Customs and Border Protection Agency. The purchase price was $85 million, including the assumption of $49.4 of mortgage debt and excluding acquisition costs.
- In December 2011, GOV acquired a previously disclosed office property located in Salem, OR with 233,358 rentable square feet. This property is 84% leased to five tenants, of which 70% is leased to the State of Oregon and occupied by the Oregon Department of Human Services, the Oregon Department of Justice and the Oregon Employment Department. The purchase price was $30.9 million, excluding acquisition costs.
- In October 2011, GOV amended its unsecured revolving credit facility to among other things, increase maximum borrowings under the facility from $500 million to $550 million, reduce the interest paid on drawings under the facility from LIBOR plus 210 basis points to LIBOR plus 150 basis points, each subject to adjustment based on changes to GOV’s senior unsecured debt ratings, and extend the stated maturity date of the facility from October 28, 2013 to October 19, 2015. Subject to certain conditions and the payment of a fee, GOV has the option to further extend the stated maturity date by one year to October 19, 2016.
- In January 2012, GOV entered into a five year $350 million unsecured term loan. The loan matures on January 11, 2017, and is prepayable without penalty at any time. The term loan bears interest at LIBOR plus 175 basis points, subject to adjustment based on changes to GOV's senior unsecured debt ratings. GOV used the net proceeds of the term loan to repay amounts outstanding under its revolving credit facility and expects to use the balance to fund general business activities, including possible future acquisitions.
The conference call telephone number is (877) 209-9920. Participants calling from outside the United States and Canada should dial (612) 332-0802. 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 11:59 p.m. Eastern Standard Time on Wednesday, February 29, 2012. To hear the replay, dial (320) 365-3844. The replay pass code is 227516.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 GOV’s website about five minutes before the call. The archived webcast will be available for replay on GOV’s website for about one week after the call. The recording and retransmission in any way of GOV’s fourth quarter conference call is strictly prohibited without the prior written consent of GOV. Supplemental Data: A copy of GOV’s Fourth Quarter 2011 Supplemental Operating and Financial Data is available for download at GOV’s website, www.govreit.com. GOV’s website is not incorporated as part of this press release. Government Properties Income Trust is a real estate investment trust, or REIT, which owns properties located throughout the United States which are majority leased to the U.S. Government and other government tenants. As of December 31, 2011, GOV owned 71 properties with 9.0 million rentable square feet. GOV is headquartered in Newton, Massachusetts. Please see the following pages for a more detailed statement of our operating results and financial condition.
|GOVERNMENT PROPERTIES INCOME TRUST|
|CONSOLIDATED STATEMENTS OF INCOME, FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS|
|(amounts in thousands, except per share data)|
|Three Months Ended December 31,||Year Ended December 31,|
|Real estate taxes||5,398||3,553||19,345||12,177|
|Other operating expenses||9,710||7,000||31,784||19,937|
|Depreciation and amortization||12,227||7,637||40,089||24,239|
|Acquisition related costs||658||1,208||3,504||5,750|
|General and administrative||3,243||2,146||10,898||7,061|
|Interest and other income||15||23||104||103|
|Interest expense (including net amortization of debt premiums and deferred|
|financing fees of $258, $492, $1,045 and $2,283, respectively)||(3,282||)||(2,169||)||(12,057||)||(7,351||)|
|Loss on extinguishment of debt||-||(3,786||)||-||(3,786||)|
|Equity in earnings (losses) of an investee||28||16||139||(1||)|
|Income before income tax expense||13,357||6,630||46,200||27,956|
|Income tax expense||(109||)||(90||)||(203||)||(161||)|
|Calculation of Funds from Operations (FFO) and Normalized FFO(1)|
|Plus: depreciation and amortization||12,227||7,637||40,089||24,239|
|Plus: acquisition related costs||658||1,208||3,504||5,750|
|Plus: loss on early extinguishment of debt||-||3,786||-||3,786|
|Weighted average common shares outstanding||47,052||40,501||43,368||34,341|
|Per common share|
|GOVERNMENT PROPERTIES INCOME TRUST|
|CONSOLIDATED BALANCE SHEETS|
|(amounts in thousands, except share data)|
|December 31,2011||December 31,2010|
|Real estate properties:|
|Buildings and improvements||1,129,994||833,719|
|Acquired real estate leases, net||117,596||60,097|
|Cash and cash equivalents||3,272||2,437|
|Rents receivable, net||29,000||19,200|
|Deferred leasing costs, net||3,074||1,002|
|Deferred financing costs, net||5,550||3,935|
|Other assets, net||10,297||16,622|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Revolving credit facility||$||345,500||$||118,000|
|Mortgage notes payable||95,383||46,428|
|Accounts payable and accrued expenses||20,691||14,436|
|Due to related persons||4,071||1,348|
|Assumed real estate lease obligations, net||11,262||13,679|
|Commitments and contingencies|
|Common shares of beneficial interest, $.01 par value:|
|70,000,000 shares authorized, 47,051,650 and 40,500,800|
|shares issued and outstanding, respectively||471||405|
|Additional paid in capital||935,438||776,913|
|Cumulative net income||87,333||41,336|
|Cumulative other comprehensive income||77||2|
|Cumulative common distributions||(131,651||)||(61,259||)|
|Total shareholders' equity||891,668||757,397|
|Total liabilities and shareholders' equity||$||1,368,575||$||951,288|
THIS PRESS RELEASE DISCUSSES THE INTEREST TO BE PAID ON DRAWINGS UNDER OUR REVOLVING CREDIT FACILITY AND AMOUNTS OUTSTANDING ON OUR TERM LOAN. HOWEVER, ACTUAL ANNUAL COSTS UNDER THE REVOLVING CREDIT FACILITY AND THE TERM LOAN WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF OTHER FEES AND EXPENSES ASSOCIATED WITH THE REVOLVING CREDIT FACILITY AND THE TERM LOAN.THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING UNDER “RISK FACTORS” IN OUR PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE STATED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS. OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION ARE AVAILABLE ON THE ITS WEBSITE AT WWW.SEC.GOV. YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS. EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.