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Factors that could cause actual results to differ materially include, without limitation, the ability to renew or re-lease space under favorable terms, regulatory changes, changes in the economy, the successful and timely completion of dispositions, acquisitions and development projects, changes in interest rates, and other risks associated with the commercial real estate business, as detailed in our filings with the SEC.I would now like to turn the call over to Roger for his formal remarks. Roger Waesche Thank you Michelle and good morning. 2012 is starting off well as evidenced by our better than expected quarterly results. Our FFO per share as adjusted for comparability for the first quarter was $0.53, which is $0.02 above our guidance range and $0.04 above the $0.49 we achieved in 2011. The quarter's modest outperformance was primarily driven by lower than budget property operating expenses associated with the mild winter in the Mid Atlantic state and higher than excepted development fee income. We are reaffirming our 2012 annual FFO guidance of $2.02 to $2.18 per share. The fact that existing and potential strategic tenant in the government and defense IT industries have been operating this fiscal year with a budget rather than other under a continuing resolution as modestly increased leasing activity. We are tracking over 300,000 square feet of potential development leasing activity at the National Business Park area, Patriot Ridge and Red Stone Gateway that we expect to result in further leasing during 2012. This is in addition to 86,000 square feet of development space leased in the first quarter and 60,000 square feet already started in this quarter that Steve Budorick will provide additional color. That said, we believe the potential federal budget cut in fiscal year 2013 generated by the possible application of (inaudible) cuts to the defense budget under the Budget Control Act is causing agencies and some contractors to be more deliberate about making long term large scale space commitment.
Compounding this uncertainty is the increasing likelihood that the fiscal 2013 defense budget will not be passed before the November elections. Ultimately we expect to see our markets benefit by continued growth in support of cyber and priority programs as well as the remaining contractor tail following the recent government BRAC moves.In the meantime we will keep working hard for every deal in each of our markets. The good news is that everything we hear regarding potential budget cuts to defense in fiscal 2013 indicates the primary affected areas will be large weapon systems and force structure. Program cuts to intelligence activities are expected to be minimal by comparison and we believe cyber initiatives will grow. We expect the agencies that have moved to locations near our parks as a result of BRAC to create a trail of contractors that will follow them through to 2014. While the defense pie is likely to modestly shrink in 2013 our tenants portion is likely to grow. Additional a potential slowdown in DOD building acquisitions and construction or mil con ultimately may lead to additional leasing demand by the government. Our piece of dispositions through the Strategic Reallocation Plan or SRP we launched in April 2011 is in line with our expectation. First quarter sales totaled $63 million gross and $61 million after closing cost. These sales were comprised of 7 stabilized operating properties at a weighted average cap rate of 7.4% for net proceeds of $23 million. These buildings contained 63 leases and were 80% leased. We also sold two non-revenue producing building at Century Gateway and San Antonio in Candlewood and Hanover, Maryland and some land in San Antonio for net proceeds of $38 million. Since announcing the $562 million SRP we have executed $139 million or property sales which is approximately 25% of the overall plan. The sales included $100 million of operating properties at an average exit cap rate of 7.8% with the balance comprised of non-operating property. Read the rest of this transcript for free on seekingalpha.com