Government Properties Income Trust (NYSE: GOV) today announced its financial results for the quarter and year ended December 31, 2012. Results for the Quarter Ended December 31, 2012: Normalized funds from operations, or Normalized FFO, for the quarter ended December 31, 2012 were $28.1 million, or $0.53 per share, compared to Normalized FFO for the quarter ended December 31, 2011 of $26.1 million, or $0.56 per share. Net income was $13.2 million, or $0.25 per share, for the quarter ended December 31, 2012, compared to $13.2 million, or $0.28 per share, for the quarter ended December 31, 2011. GOV’s weighted average number of common shares outstanding was 53.2 million and 47.1 million for the quarters ended December 31, 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 December 31, 2012 and 2011 appears later in this press release. Results for the Year Ended December 31, 2012: Normalized FFO for the year ended December 31, 2012 were $103.2 million, or $2.12 per share, compared to Normalized FFO for the year ended December 31, 2011 of $89.6 million, or $2.07 per share. Net income was $50.0 million, or $1.03 per share, for the year ended December 31, 2012, compared to $46.0 million, or $1.06 per share, for the year ended December 31, 2011. GOV’s weighted average number of common shares outstanding was 48.6 million and 43.4 million for the years ended December 31, 2012 and 2011, respectively. A reconciliation of net income determined according to GAAP to FFO and Normalized FFO for the years ended December 31, 2012 and 2011 appears later in this press release. Occupancy and Leasing Results: As of December 31, 2012, 92.5% of GOV’s total rentable square feet was leased, compared to 95.0% leased as of December 31, 2011 and 92.4% leased as of September 30, 2012.
GOV entered lease renewals for 631,949 rentable square feet and new leases for 5,401 rentable square feet during the quarter ended December 31, 2012 which had weighted average rental rates that were 16.8% above prior rents for the same space. The weighted average lease term for leases entered during the fourth quarter of 2012 was 4.6 years. Commitments for tenant improvement, leasing commission costs and concessions for leases entered during the quarter ended December 31, 2012 totaled approximately $3.3 million, or approximately $1.15 per square foot per year of the weighted average lease term.Recent Acquisition Activities: Since October 1, 2012, GOV has acquired two properties for an aggregate purchase price of $33.0 million, excluding acquisition costs, as follows:
- In November 2012, GOV acquired a previously disclosed office property located in Windsor Mill, MD with 80,398 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 purchase price was $14.5 million, excluding acquisition costs.
- In December 2012, GOV acquired an office property located in Florence, KY with 167,939 rentable square feet. This property is 100% leased to the U.S. Government and occupied by the Internal Revenue Service. The purchase price was $18.5 million, excluding acquisition costs.
- In January 2013, GOV entered an agreement to sell an office property located in Oklahoma City, OK with 185,881 rentable square feet and a net book value of $8.0 million at December 31, 2012. The contract purchase price is $16.3 million, excluding closing costs.
- In February 2013, GOV entered an agreement to sell an office property located in Tucson, AZ with 31,051 rentable square feet and a net book value of $2.1 million (which includes the $0.5 million loss on asset impairment recognized in the fourth quarter of 2012) at December 31, 2012. The contract purchase price is $2.2 million, excluding closing costs.
Recent Financing Activities:In October 2012, GOV issued 7,500,000 common shares in a public offering at a price of $23.25 per share and raised net proceeds of approximately $166.7 million. The net proceeds from this offering were used to repay amounts outstanding under GOV's revolving credit facility. Conference Call: On Wednesday, February 20, 2013, 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 2012 fourth quarter and year end results. The conference call telephone number is (800) 553-0288. Participants calling from outside the United States and Canada should dial (612) 332-0530. 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 February 27, 2013. To hear the replay, dial (320) 365-3844. The replay pass code is 279892. 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 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 December 31, 2012, GOV owned 84 properties with approximately 10.2 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|
|CONSOLIDATED STATEMENTS OF INCOME, FUNDS FROM OPERATIONS AND|
|NORMALIZED FUNDS FROM OPERATIONS|
|(amounts in thousands, except per share data)|
|Three Months Ended||Year Ended|
|December 31,||December 31,|
|Real estate taxes||6,203||5,398||23,413||19,345|
|Other operating expenses||10,815||9,710||38,558||31,784|
|Depreciation and amortization||13,885||12,227||51,166||40,089|
|Loss on asset impairment||494||-||494||-|
|Acquisition related costs||557||658||1,614||3,504|
|General and administrative||2,960||3,243||12,355||10,898|
|Interest and other income||8||15||29||104|
|Interest expense (including net amortization of debt premiums and deferred financing fees of $334, $258, $1,332 and $1,045, respectively)||(4,243||)||(3,282||)||(16,892||)||(12,057||)|
|Equity in earnings of an investee||80||28||316||139|
|Income before income tax expense||13,231||13,357||50,119||46,200|
|Income tax expense||(40||)||(109||)||(159||)||(203||)|
|Calculation of Funds from Operations (FFO) and Normalized FFO(1)|
|Plus: depreciation and amortization||13,885||12,227||51,166||40,089|
|Plus: loss on asset impairment||494||-||494||-|
|Plus: acquisition related costs||557||658||1,614||3,504|
|Weighted average common shares outstanding||53,176||47,052||48,617||43,368|
|Per common share|
|GOVERNMENT PROPERTIES INCOME TRUST|
|CONSOLIDATED BALANCE SHEETS|
|(amounts in thousands, except share data)|
|December 31,||December 31,|
|Real estate properties:|
|Buildings and improvements||1,288,813||1,129,994|
|Acquired real estate leases, net||144,484||117,596|
|Cash and cash equivalents||5,255||3,272|
|Rents receivable, net||29,099||29,000|
|Deferred leasing costs, net||7,661||3,074|
|Deferred financing costs, net||5,718||5,550|
|Other assets, net||10,378||10,297|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Unsecured revolving credit facility||$||49,500||$||345,500|
|Unsecured term loan||350,000||-|
|Mortgage notes payable||93,127||95,383|
|Accounts payable and accrued expenses||19,208||20,691|
|Due to related persons||3,719||4,071|
|Assumed real estate lease obligations, net||19,129||11,262|
|Commitments and contingencies|
|Common shares of beneficial interest, $.01 par value: 70,000,000 shares authorized, 54,643,888 and 47,051,650 shares issued and outstanding, respectively||547||471|
|Additional paid in capital||1,103,982||935,438|
|Cumulative net income||137,293||87,333|
|Cumulative other comprehensive income||99||77|
|Cumulative common distributions||(214,470||)||(131,651||)|
|Total shareholders' equity||1,027,451||891,668|
|Total liabilities and shareholders' equity||$||1,562,134||$||1,368,575|
- THIS PRESS RELEASE STATES THAT WE HAVE ENTERED AGREEMENTS TO SELL TWO PROPERTIES. THESE TRANSACTIONS ARE SUBJECT TO VARIOUS TERMS AND CONDITIONS TYPICAL OF COMMERCIAL REAL ESTATE TRANSACTIONS. THESE TERMS AND CONDITIONS MAY NOT BE MET. AS A RESULT, THESE TRANSACTIONS MAY NOT OCCUR OR MAY BE DELAYED OR THEIR TERMS MAY CHANGE.
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. 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.