Government Properties Income Trust (NYSE: GOV) today announced its financial results for the quarter and nine months ended September 30, 2012. Results for the Quarter Ended September 30, 2012: Normalized funds from operations, or Normalized FFO, for the quarter ended September 30, 2012 were $25.6 million, or $0.54 per share, compared to Normalized FFO for the quarter ended September 30, 2011 of $23.0 million, or $0.51 per share. Net income was $11.8 million, or $0.25 per share, for the quarter ended September 30, 2012, compared to $11.6 million, or $0.26 per share, for the same quarter last year. GOV’s weighted average number of common shares outstanding was 47.1 million and 45.3 million for the quarters ended September 30, 2012 and 2011, 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 September 30, 2012 and 2011 appears later in this press release. Results for the Nine Months Ended September 30, 2012: Normalized FFO for the nine months ended September 30, 2012 were $75.1 million, or $1.60 per share, compared to Normalized FFO for the nine months ended September 30, 2011 of $63.5 million, or $1.51 per share. Net income was $36.8 million, or $0.78 per share, for the nine months ended September 30, 2012, compared to $32.7 million, or $0.78 per share, for the same period last year. GOV’s weighted average number of common shares outstanding was 47.1 million and 42.1 million for the nine months ended September 30, 2012 and 2011, respectively. A reconciliation of net income determined according to GAAP to FFO and Normalized FFO for the nine months ended September 30, 2012 and 2011 appears later in this press release. Recent Investment Activities: Since July 1, 2012, GOV has acquired or has entered into an agreement to acquire nine properties for an aggregate purchase price of $166.7 million, excluding acquisition costs, as follows:
- In July 2012, GOV acquired a previously disclosed office property located in Stockton, CA with 22,012 rentable square feet. This property is 100% leased to the U.S. Government and occupied by the Department of Immigration and Customs Enforcement. The purchase price was $8.3 million, excluding acquisition costs.
- Also in July 2012, GOV acquired two previously disclosed office properties located in Atlanta, GA and Jackson, MS and an office warehouse property located in Ellenwood, GA with a combined total of 552,571 rentable square feet. These properties are 100% leased to the U.S. Government and occupied by the Department of Homeland Security, Immigration and Customs Enforcement, the Federal Bureau of Investigation and the National Archives and Records Administration. The aggregate purchase price was $88.0 million, excluding acquisition costs.
- In September 2012, GOV acquired three office properties located in Boise, ID with 180,952 rentable square feet. These properties are 100% leased to the U.S. Government and occupied by the National Resource Center and the Department of Homeland Security. The aggregate purchase price was $40.2 million, excluding acquisition costs.
- Also in September 2012, GOV acquired an office property located in Kansas City, MO with 86,739 rentable square feet. This property is 100% leased to the U.S. Government and occupied by the Federal Bureau of Investigation. The purchase price was $15.7 million, excluding acquisition costs.
- In October 2012, GOV entered an agreement to acquire an office property located in Windsor Mill, MD with 78,131 rentable square feet. This property is 100% leased to two tenants, of which 97% is leased to the U.S. Government and occupied by the Centers for Medicare and Medicaid. The contract purchase price is $14.5 million, excluding acquisition costs. This pending acquisition is subject to GOV’s satisfactory completion of diligence and other customary closing conditions; accordingly, GOV can provide no assurance that it will acquire this property.
Conference Call:On Tuesday, October 30, 2012, at 1:00 p.m. Eastern Time, David Blackman, President and Chief Operating Officer, and Mark Kleifges, Treasurer and Chief Financial Officer, will host a conference call to discuss the third quarter 2012 results. The conference call telephone number is (800) 230-1074. Participants calling from outside the United States and Canada should dial (612) 234-9960. 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 Time on November 6, 2012. To hear the replay, dial (320) 365-3844. The replay pass code is 260114. 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 third quarter conference call is strictly prohibited without the prior written consent of GOV. Supplemental Data: A copy of GOV’s Third Quarter 2012 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 that are majority leased to the U.S. Government and other government tenants. As of September 30, 2012, GOV owned 82 properties with approximately 10.0 million rentable square feet. GOV is headquartered in Newton, Massachusetts. Please see the following pages for a more detailed statement of GOV’s operating results and financial condition and for an explanation of GOV’s calculation of FFO and Normalized FFO.
|GOVERNMENT PROPERTIES INCOME TRUST|
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME, FUNDS FROM OPERATIONS AND|
|NORMALIZED FUNDS FROM OPERATIONS|
|(amounts in thousands, except per share data)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Real estate taxes||5,728||4,853||17,210||13,947|
|Other operating expenses||9,565||7,893||27,743||22,074|
|Depreciation and amortization||13,056||10,379||37,281||27,862|
|Acquisition related costs||763||1,008||1,057||2,846|
|General and administrative||3,637||2,746||9,395||7,655|
|Interest and other income||7||54||21||89|
|Interest expense (including net amortization of debt premiums and deferred|
|financing fees of $339, $266, $998 and $787, respectively)||(4,530||)||(3,162||)||(12,649||)||(8,775||)|
|Equity in earnings of an investee||115||28||236||111|
|Income before income tax benefit (expense)||11,786||11,555||36,888||32,843|
|Income tax benefit (expense)||(30||)||8||(119||)||(94||)|
|Calculation of Funds from Operations (FFO) and Normalized FFO(1)|
|Plus: depreciation and amortization||13,056||10,379||37,281||27,862|
|Plus: acquisition related costs||763||1,008||1,057||2,846|
|Weighted average common shares outstanding||47,108||45,322||47,086||42,127|
|Per common share|
|GOVERNMENT PROPERTIES INCOME TRUST|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(amounts in thousands, except share data)|
|September 30,||December 31,|
|Real estate properties:|
|Buildings and improvements||1,268,730||1,129,994|
|Acquired real estate leases, net||131,159||117,596|
|Cash and cash equivalents||3,169||3,272|
|Rents receivable, net||26,806||29,000|
|Deferred leasing costs, net||5,696||3,074|
|Deferred financing costs, net||6,169||5,550|
|Other assets, net||11,641||10,297|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Unsecured revolving credit facility||$||167,000||$||345,500|
|Unsecured term loan||350,000||-|
|Mortgage notes payable||93,709||95,383|
|Accounts payable and accrued expenses||21,816||20,691|
|Due to related persons||7,231||4,071|
|Assumed real estate lease obligations, net||14,038||11,262|
|Commitments and contingencies|
|Common shares of beneficial interest, $.01 par value:|
|70,000,000 shares authorized, 47,143,888 and 47,051,650|
|shares issued and outstanding, respectively||471||471|
|Additional paid in capital||937,285||935,438|
|Cumulative net income||124,102||87,333|
|Cumulative other comprehensive income||108||77|
|Cumulative common distributions||(190,973||)||(131,651||)|
|Total shareholders' equity||870,993||891,668|
|Total liabilities and shareholders' equity||$||1,524,787||$||1,368,575|
- THIS PRESS RELEASE STATES THAT WE HAVE ENTERED AN AGREEMENT TO PURCHASE A PROPERTY. THIS TRANSACTION IS SUBJECT TO VARIOUS TERMS AND CONDITIONS TYPICAL OF COMMERCIAL REAL ESTATE TRANSACTIONS. THESE TERMS AND CONDITIONS MAY NOT BE MET. AS A RESULT, THIS TRANSACTION MAY NOT OCCUR OR MAY BE DELAYED.
- THIS PRESS RELEASE STATES THAT WE HAVE GRANTED THE UNDERWRITERS OF OUR COMMON SHARE OFFERING AN OPTION TO PURCHASE UP TO AN ADDITIONAL 1,125,000 COMMON SHARES. AN IMPLICATION OF THIS STATEMENT MAY BE THAT THIS OPTION MAY BE EXERCISED IN WHOLE OR IN PART. IN FACT, THE COMPANY DOES NOT KNOW WHETHER THIS OPTION, OR ANY PART OF IT, WILL BE EXERCISED, AND THE UNDERWRITERS MAY ELECT NOT TO DO SO.
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.