press release
May 15, 2012, 6:27 p.m. EDT
First Potomac Realty Trust Reports First Quarter 2012 Results
Schedules Conference Call for May 16th at 9:00 a.m.
WASHINGTON, May 15, 2012 (BUSINESS WIRE) --
First Potomac Realty Trust
FPO
-0.97%
, a leader in the ownership,
management, development and redevelopment of office and industrial
properties in the greater Washington, D.C. region, reported results for
the three months ended March 31, 2012.
Highlights:
--
Core Funds From Operations of $14.5 million, or $0.28 per diluted
share.
--
Same-property net operating income increased by 2.0% on an accrual
basis and 2.8% on a cash basis.
--
Executed 576,000 square feet of leases, generating over 134,000
square feet of positive net absorption.
--
Increased leased and occupancy rates over prior quarter to 84.9%
and 83.0%, respectively.
--
Expanded unsecured term loan from $225 million to $300 million.
--
Raised net proceeds of approximately $44 million through the
issuance of 1.8 million additional 7.750% Series A Preferred Shares.
Core FFO and FFO increased for the three months ended March 31, 2012
compared with the same period in 2011 primarily due to an increase in
the Company's net operating income. The Company's net loss decreased for
the three months ended March 31, 2012 compared with the same period in
2011 primarily due to a decrease in acquisition costs. The Company did
not acquire any properties during the three months ended March 31, 2012
compared with the acquisition of three properties during the three
months ended March 31, 2011, which resulted in $2.2 million in
acquisition costs.
The Company's consolidated portfolio was 84.9% leased and 83.0% occupied
at March 31, 2012 compared with 84.3% leased and 81.8% occupied at
December 31, 2011. A list of the Company's properties, as well as
additional information regarding the Company's results of operations can
be found in the Company's First Quarter 2012 Supplemental Financial
Report, which is posted on the Company's website,
www.first-potomac.com .
A reconciliation of net loss to FFO and Core FFO, as well as definitions
and statements of purpose, is included below under "Non-GAAP Financial
Measures" and in the financial tables accompanying this press release.
Internal Investigation
As previously disclosed in the Company's Annual Report on Form 10-K for
the year ended December 31, 2011, management identified a material
weakness in the Company's internal control over financial reporting as
of December 31, 2011. In response to this material weakness, on March
20, 2012, the Company's Board of Trustees appointed a special committee
of independent trustees to review the facts and circumstances relating
to the material weakness determination and the Company's processes
surrounding the monitoring and oversight of compliance with the
Company's financial covenants. The Board of Trustees determined in late
April that a more detailed, internal investigation of these matters
should be undertaken by the Audit Committee of the Board of Trustees
(the "Internal Investigation"), with the assistance of independent
outside professionals, which Internal Investigation is ongoing. The
filing of the Company's Form 10-Q for the quarter ended March 31, 2012
and the release of the Company's financial results for the same period
were delayed due to the time required to address various matters prior
to the filing thereof, including those relating to the Internal
Investigation and the execution of various waivers and amendments to
certain bank debt agreements. For more information regarding these
matters, see the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2012. The Company is unable to predict the ultimate
outcome of the Internal Investigation, or the timing of its completion.
Property Operations
During the first quarter, the Company executed 576,000 square feet of
leases, which consisted of 340,000 square feet of new leases and 236,000
square feet of renewal leases. Significant new leases included 37,000
square feet at Gateway 270 West, 32,000 square feet at Frederick
Industrial Park, 28,500 square feet at Campus at Metro Park North and
24,000 square feet at Redland Corporate Center, which are all located in
the Company's Maryland region and 35,000 square feet at River's Bend
Center in the Company's Southern Virginia region. Rent from these new
leases is expected to commence by the end of the third quarter of 2012.
The 236,000 square feet of renewal leases in the quarter reflects a 51%
retention rate. The renewal rate during first-quarter 2012 was lower
than our historical renewal rates primarily due to the timing of several
known larger lease expirations. The Company anticipates the renewal rate
will increase to more in-line with our prior levels throughout the
balance of 2012. Renewal leases during the quarter included 54,000
square feet at Gateway 270 West, 35,000 square feet at Worman's Mill
Court and 32,500 square feet at Cavalier Industrial Park.
Same-property net operating income ("Same-Property NOI") increased 2.0%
for the three months ended March 31, 2012 compared with the same period
in 2011. Same-Property NOI increased 9.7% and 8.6% for the Company's
Maryland and Northern Virginia regions, respectively, for the three
months ended March 31, 2012, primarily due to an increase in rental
rates. Same-Property NOI increased 3.6% for the Company's Washington,
D.C. region for the three months ended March 31, 2012, primarily due to
a decline in real estate taxes. Same-Property NOI decreased 10.4% for
the Company's Southern Virginia region for the three months ended March
31, 2012 due to an increase in vacancy.
A reconciliation of net loss to Same-Property NOI, as well as a
definition and statement of purpose, is included below under "Non-GAAP
Financial Measures" and in the financial tables accompanying this press
release.
Dispositions
On March 22, 2012, the Company sold Airpark Place Business Center, a
three-building, 82,400 square foot business park in Gaithersburg,
Maryland for net sale proceeds of $5.2 million. The operating results of
the property are reflected as discontinued operations in the Company's
consolidated statements of operations for each of the periods presented
in this press release.
In April 2012, the Company entered into a binding contract to sell
Woodlands Business Center, a 38,000 square foot office building in
Largo, Maryland, which the Company acquired as part of a portfolio
acquisition in 2004. The sale was completed in May 2012. At March 31,
2012, the Company classified the property as held-for-sale and reflected
its operating results as discontinued operations in its consolidated
statements of operations for each of the periods presented in this press
release.
During the first quarter of 2012, the Company reduced its anticipated
holding period for its Owings Mills Business Park, a six-building,
219,300 square foot business park in Owings Mills, Maryland. Based on an
analysis of the property's cash flows over the Company's reduced holding
period for the property, the Company recorded an impairment charge of
$2.8 million.
Financing Activity
In February 2012, the Company repaid a $21.6 million mortgage loan
encumbering Campus at Metro Park North with borrowings under its
unsecured revolving credit facility. In addition, the Company further
expanded its unsecured term loan from $225.0 million to $300.0 million
and used the proceeds to pay down $73.0 million of the outstanding
balance under its unsecured revolving credit facility and for other
general corporate purposes.
In March 2012, the Company issued 1.8 million additional Series A
Cumulative Redeemable Perpetual Preferred Shares (the "Series A
Preferred Shares") with a liquidation preference of $25.00 per share,
which generated net proceeds of approximately $44 million. Dividends on
the additional Series A Preferred Shares are cumulative and payable on a
quarterly basis beginning May 15, 2012, at a rate of 7.750%. The Company
used the net proceeds from the issuance of the additional Series A
Preferred Shares to repay a portion of the outstanding balance on its
unsecured revolving credit facility. The offering was a reopening of the
Company's original issuance of the Series A Preferred Shares, which
occurred in January 2011.
During the first quarter of 2012, the Company entered into four interest
rate swap agreements that fixed LIBOR on $75.0 million of its variable
rate debt. At March 31, 2012, the Company had fixed LIBOR, at a weighted
average rate of 1.6328%, on $275.0 million of its variable rate debt
through ten interest rate swap agreements. After accounting for the
interest rate swap agreements, the Company's total debt had a weighted
average effective interest rate of 4.9% at March 31, 2012. The Company's
interest coverage ratio for the quarter ended March 31, 2012 was 2.4
times.
During the first quarter, the Company sold 245,000 common shares through
its controlled equity offering program at a weighted average offering
price of $14.83 per common share, generating net proceeds of $3.6
million. The Company used the proceeds for general corporate purposes.
As of the date of this release, the Company had 4.3 million common
shares available for issuance under its controlled equity offering
program.
Balance Sheet
The Company had $910.2 million of debt outstanding at March 31, 2012. Of
the total debt outstanding, $483.2 million was fixed-rate debt and
$275.0 million was variable-rate debt that had been swapped to a fixed
interest rate. The balance of the Company's debt, $152.0 million, was
variable rate debt consisting of borrowings under unsecured and secured
term loans and its unsecured revolving credit facility.
On May 10, 2012, the Company and its bank lenders amended the Company's
unsecured revolving credit facility, unsecured term loan and secured
loan (together, the "Bank Debt") to, among other things, revise certain
financial and other covenants to provide additional operating
flexibility for the Company to execute its business strategy and clarify
the treatment of certain covenant compliance-related definitions. In
addition, the unsecured revolving credit facility and the unsecured term
loan were amended to give the lenders the right, at their option, to
record mortgages on substantially all of the Company's unencumbered
properties. The unsecured term loan also was amended to convert the
facility from a fixed interest rate spread over LIBOR to an interest
rate spread that is floating based on the Company's leverage levels,
which will have the effect of initially increasing the pricing of the
unsecured term loan by 25 basis points. Pricing can increase by an
additional 25 basis points to the extent the Company's leverage levels
increase further or can revert to the original pricing if the Company's
leverage ratio improves. In connection with the foregoing amendments,
the Company will pay a fee of 20 basis points on the amount of each of
the facilities.
In connection with the Internal Investigation and the review of the
Company's financial and other non-financial covenants in its Bank Debt
and its 6.41% Series A Senior Notes and 6.55% Series B Senior Notes
(collectively, the "Senior Notes"), the Company determined it would not
have been in compliance with certain of the financial covenants under
the documents governing the Senior Notes, as of March 31, 2012, and for
one or more prior periods, including the fourth quarter of 2010.
However, in connection with the amendments to the Bank Debt agreements,
the lenders under the Bank Debt agreements waived, among other things,
any cross-defaults with respect to financial covenant non-compliance
under the Senior Notes that may have existed with respect to periods
prior to the date of such amendments. As a result, any financial
covenant non-compliance under the Senior Notes would not create an event
of default under the Company's Bank Debt agreements. Furthermore, the
sole remedy available to the holders of the Senior Notes upon the
occurrence of an event of default is to accelerate the maturity thereof
and to receive a make-whole amount in connection therewith. On May 11,
2012, the Company delivered notices regarding its intention to prepay in
full the $37.5 million principal amount outstanding under each of the
Series A and Series B Senior Notes, for an aggregate principal amount of
$75.0 million, plus accrued interest to the prepayment date and an
estimated $10.5 million make-whole amount, in accordance with the
optional prepayment provisions governing the Senior Notes. The Company
intends to draw on its unsecured revolving credit facility to finance
the prepayment, which is expected to occur on or prior to June 11, 2012.
The $10.5 million make-whole payment and the extinguishment of
unamortized deferred financing costs of $0.1 million will be recorded as
a loss on early debt extinguishment in the second quarter of 2012, which
is expected to be partially offset by a decrease in interest expense as
a result of the lower interest rate on the Company's unsecured credit
facility, compared with the interest rate of the Senior Notes.
Dividends
On April 24, 2012, the Company declared a dividend of $0.20 per common
share, equating to an annualized dividend of $0.80 per common share. The
dividend was paid on May 11, 2012, to common shareholders of record as
of May 4, 2012. The Company also declared a dividend of $0.484375 per
share on its Series A Preferred Shares. The dividend was paid on May 15,
2012 to preferred shareholders of record as of May 4, 2012.
Core FFO Guidance
As a result of the 1.8 million additional Series A Cumulative Redeemable
Perpetual Prefer red Shares issued in March 2012, the Company has
updated its full-year 2012 Core FFO guidance to $1.06 to $1.12 per
diluted share. The following is a summary of the assumptions that the
Company used, which were updated based on the Company's first quarter
activity, in arriving at its guidance (unaudited, amounts in thousands
except per share amounts):
Expected Ranges(1)
------------------------------
Portfolio NOI $ 123,000 - $ 125,000
Interest and Other Income 5,500 - 6,500
FFO from Unconsolidated Joint Ventures 4,500 - 5,000
Interest Expense $ (45,000) - $ (47,000)
G&A (18,000) - (19,000)
Preferred Dividends (11,964) - (11,964)
Weighted Average Shares 53,000 - 54,000
Average Occupancy 83 % - 84 %
Same-Property NOI Growth - Accrual Basis 3 % - 5 %
---------------------------------------- ------- - - ------- -
(1) Does not take into consideration any additional acquisitions in
2012. The Company's guidance also excludes any potential gains or
asset impairments associated with property dispositions.
The Company's guidance does not take into account the costs associated
with the Internal Investigation which may be substantial. The Company's
guidance is also based on a number of other assumptions, many of which
are outside the Company's control and all of which are subject to
change. The Company may change its guidance as actual and anticipated
results vary from these assumptions.
Guidance Range for 2012 Low Range High Range
----------------------------------------------------------------- -------------- --------------
Net loss attributable to common shareholders per diluted share(1) $ (0.45) $ (0.39)
Real estate depreciation, net loss attributable to
1.48 1.55
noncontrolling interests and items excluded from Core FFO per
diluted share(2)
----- -----
Core FFO per diluted share $ 1.03 $ 1.16
=== ===== === =====
(1) Net loss attributable to common shareholders includes
approximately $14 million of costs associated with the prepayment
of the Senior Notes and the write-off of costs primarily
associated with amending the unsecured term loan in May 2012.
(2) Items excluded from Core FFO include acquisition costs, contingent
consideration, debt retirement charges and debt modification
charges incurred through December 31, 2012.
Investor Conference Call and Webcast
First Potomac Realty Trust will host a conference call on Wednesday, May
16, 2012 at 9:00 a.m. ET, to discuss first quarter results. The
conference call can be accessed by dialing (877) 705-6003 or (201)
493-6725 for international participants. A replay of the conference call
will be available from 12:00 Noon ET on Wednesday May 16, 2012 until
midnight ET on Wednesday May 23, 2012. The replay can be accessed by
dialing (877) 870-5176 or (858) 384-5517 for international callers, and
entering pin number 394640.
A live broadcast of the conference call will also be available online
and can be accessed from the Investor Information page of the Company's
website,
www.first-potomac.com ,
on Wednesday, May 16, 2012, beginning at 9:00 a.m. ET. An online replay
will be available on the above site shortly after the call and will
continue for 90 days.
Annual Meeting of Shareholders
First Potomac Realty Trust will hold its 2012 Annual Meeting of
Shareholders on Wednesday, May 23, 2012, at 11:00 a.m. ET at the
Company's corporate headquarters at 7600 Wisconsin Avenue, 11th
Floor in Bethesda, Maryland for shareholders of record as of the close
of business on March 16, 2012. The Company's proxy statement was filed
on April 5, 2012 with the Securities and Exchange Commission.
About First Potomac Realty Trust
First Potomac Realty Trust is a self-administered, self-managed real
estate investment trust that focuses on owning, operating, developing
and redeveloping office and industrial properties in the greater
Washington, D.C. region. As of March 31, 2012, the Company's
consolidated portfolio totaled approximately 14 million square feet.
Based on annualized cash basis rent, the Company's portfolio consists of
43% office properties, 36% business parks and 21% industrial properties.
FPO common shares
FPO
-0.97%
and preferred shares are
publicly traded on the New York Stock Exchange.
Non-GAAP Financial Measures
Funds from Operations -- Funds from operations ("FFO") represents
net income (computed in accordance with U.S. generally accepted
accounting principles ("GAAP")), excluding gains (losses) on sales of
real estate and impairments of real estate assets, plus real
estate-related depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. On October 31, 2011,
NAREIT issued revised guidance regarding the exclusion of impairment
write-downs of depreciable assets reported in FFO. As a result, the
Company began excluding impairment losses from FFO in the fourth quarter
of 2011 and has restated FFO from prior periods to exclude such charges
consistent with NAREIT's guidance. The Company also excludes, from its
FFO calculation, any depreciation and amortization related to third
parties from its consolidated joint ventures. The Company considers FFO
a useful measure of performance for an equity REIT because it
facilitates an understanding of the operating performance of its
properties without giving effect to real estate depreciation and
amortization, which assume that the value of real estate assets
diminishes predictably over time. Since real estate values have
historically risen or fallen with market conditions, the Company
believes that FFO provides a meaningful indication of its performance.
The Company also considers FFO an appropriate performance measure given
its wide use by investors and analysts. The Company computes FFO in
accordance with standards established by the Board of Governors of
NAREIT in its March 1995 White Paper (as amended in November 1999, April
2002 and January 2012), which may differ from the methodology for
calculating FFO utilized by other equity real estate investment trusts
("REITs") and, accordingly, may not be comparable to such other REITs.
Further, FFO does not represent amounts available for management's
discretionary use because of needed capital replacement or expansion,
debt service obligations or other commitments and uncertainties, nor is
it indicative of funds available to fund the Company's cash needs,
including its ability to make distributions. The Company presents FFO
per diluted share calculations that are based on the outstanding
dilutive common shares plus the outstanding Operating Partnership units
for the periods presented.
The Company's presentation of FFO in accordance with the NAREIT white
paper, or as adjusted by the Company, should not be considered as an
alternative to net income (computed in accordance with GAAP) as an
indicator of the Company's financial performance or to cash flow from
operating activities (computed in accordance with GAAP) as an indicator
of its liquidity. The Company's FFO calculations are reconciled to net
income in the Company's Consolidated Statements of Operations included
in this release.
Core FFO -- Management believes that the computation of FFO in
accordance with NAREIT's definition includes certain items that are not
indicative of the results provided by the Company's operating portfolio
and affect the comparability of the Company's period-over-period
performance. These items include, but are not limited to, gains and
losses on the retirement of debt, contingent consideration charges and
acquisition costs. The Company provides a reconciliation of FFO to Core
FFO in the financial tables accompanying this press release.
NOI -- The Company defines net operating income ("NOI") as
operating revenues (rental income, tenant reimbursements and other
income) less property and related expenses (property expenses, real
estate taxes and insurance). Management believes that NOI is a useful
measure of the Company's property operating performance as it provides a
performance measure of the revenues and expenses directly associated
with owning, operating, developing and redeveloping office and
industrial properties, and provides a perspective not immediately
apparent from net income or FFO. Other REITs may use different
methodologies for calculating NOI, and accordingly, the Company's NOI
may not be comparable to other REITs. The Company's NOI calculations are
reconciled to total revenues and total operating expenses at the end of
this release.
Same-Property NOI -- Same-Property Net Operating Income
("Same-Property NOI"), defined as operating revenues (rental, tenant
reimbursements and other revenues) less operating expenses (property
operating expenses, real estate taxes and insurance) from the properties
owned by the Company for the entirety of the periods presented, is a
primary performance measure the Company uses to assess the results of
operations at its properties. As an indication of the Company's
operating performance, Same-Property NOI should not be considered an
alternative to net income calculated in accordance with GAAP. A
reconciliation of the Company's Same-Property NOI to net income from its
consolidated statements of operations is presented below. The
Same-Property NOI results exclude corporate-level expenses, as well as
certain transactions, such as the collection of termination fees, as
these items vary significantly period-over-period thus impacting trends
and comparability. Also, the Company eliminates depreciation and
amortization expense, which are property level expenses, in computing
Same-Property NOI as these are non-cash expenses that are based on
historical cost accounting assumptions and do not offer the investor
significant insight into the operations of the property. This
presentation allows management and investors to distinguish whether
growth or declines in net operating income are a result of increases or
decreases in property operations or the acquisition of additional
properties. While this presentation provides useful information to
management and investors, the results below should be read in
conjunction with the results from the consolidated statements of
operations to provide a complete depiction of total Company performance.
Forward Looking Statements
The forward-looking statements contained in this press release are
subject to various risks and uncertainties. Although the Company
believes the expectations reflected in such forward-looking statements
are based on reasonable assumptions, there can be no assurance that its
expectations will be achieved. Certain factors that could cause actual
results to differ materially from the Company's expectations include
changes in general or regional economic conditions; the Company's
ability to timely lease or re-lease space at current or anticipated
rents; changes in interest rates; changes in operating costs; the
Company's ability to complete acquisitions on acceptable terms; the
Company's ability to manage its current debt levels and repay or
refinance its indebtedness upon maturity or other required payment
dates; the Company's ability to maintain financial covenant compliance
under its debt agreements; the Company's ability to remediate the
material weakness in its internal controls over financial reporting
described in its 10-K for the year ended December 31, 2011 and to
re-establish and maintain effective internal controls over financial
reporting and disclosure controls and procedures; the outcome and
potential impact of the ongoing Internal Investigation, including any
remedial actions that may be required as a result of the Internal
Investigation; the Company's ability to obtain debt and/or financing on
attractive terms, or at all; changes in the assumptions underlying the
Company's earnings and FFO guidance and other risks detailed in the
Company's Annual Report on Form 10-K and described from time to time in
the Company's filings with the SEC. Many of these factors are beyond the
Company's ability to control or predict. Forward-looking statements are
not guarantees of performance. For forward-looking statements herein,
the Company claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995. The Company assumes no obligation to update or supplement
forward-looking statements that become untrue because of subsequent
events.
FIRST POTOMAC REALTY TRUST
Consolidated Statements of Operations
(unaudited, amounts in thousands, except per share amounts)
Three Months Ended March 31,
2012 2011
--------------- ---------------
Revenues:
Rental $ 37,573 $ 31,639
Tenant reimbursements and other 9,199 7,902
------ ------
Total revenues 46,772 39,541
------ ------
Operating expenses:
Property operating 11,509 10,546
Real estate taxes and insurance 4,846 3,898
General and administrative 4,897 4,008
Acquisition costs 17 2,185
Depreciation and amortization 16,091 12,504
Impairment of real estate assets 2,751 -
------ ------
Total operating expenses 40,111 33,141
------ ------
Operating income 6,661 6,400
------ ------
Other expenses, net:
Interest expense 11,239 8,626
Interest and other income (1,508) (824)
Equity in losses of affiliates 46 32
------ ------
Total other expenses, net 9,777 7,834
------ ------
Loss from continuing operations before income taxes (3,116) (1,434)
(Provision) benefit for income taxes (61) 313
------ - ------
Loss from continuing operations (3,177) (1,121)
Loss from discontinued operations (297) (2,771)
------ - ------ -
Net loss (3,474) (3,892)
------ - ------ -
Less: Net loss attributable to noncontrolling interests 318 138
------ ------
Net loss attributable to First Potomac Realty Trust (3,156) (3,754)
Less: Dividends on preferred shares (2,664) (1,783)
------ - ------ -
Net loss available to common shareholders $ (5,820) $ (5,537)
----- ------ - ----- ------ -
Depreciation and amortization:
Real estate assets 16,091 12,504
Discontinued operations 30 395
Unconsolidated joint ventures 1,484 524
Consolidated joint ventures (38) (19)
Impairment of real estate assets 3,021 2,711
Net loss attributable to noncontrolling interests in the Operating (335) (136)
Partnership
------ - ------ -
Funds from operations (FFO) available to common shareholders $ 14,433 $ 10,442
===== ====== ===== ======
FIRST POTOMAC REALTY TRUST
Consolidated Statements of Operations
(unaudited, amounts in thousands, except per share amounts)
Three Months Ended March 31,
2012 2011
--------------- ---------------
Funds from operations (FFO) $ 17,097 $ 12,225
Dividends on preferred shares (2,664) (1,783)
------ - ------ -
FFO available to common shareholders 14,433 10,442
Debt modification fees 105 -
Acquisition costs 17 2,185
------ ------
Core FFO $ 14,555 $ 12,627
===== ====== ===== ======
Basic and diluted earnings per common share:
Loss from continuing operations $ (0.11) $ (0.06)
Loss from discontinued operations (0.01) (0.06)
------ - ------ -
Net loss $ (0.12) $ (0.12)
===== ====== = ===== ====== =
Weighted average common shares outstanding:
Basic and diluted 49,781 49,234
FFO available to common shareholders per share - basic and diluted $ 0.27 $ 0.21
Core FFO per share - diluted $ 0.28 $ 0.25
Weighted average common shares and units outstanding:
Basic 52,701 50,302
Diluted 52,805 50,506
FIRST POTOMAC REALTY TRUST
Consolidated Balance Sheets
(Amounts in thousands, except per share amounts)
March 31, 2012 December 31, 2011
-------------------- ------------------
(unaudited)
Assets:
Rental property, net $ 1,437,847 $ 1,439,661
Assets held for sale 2,933 5,297
Cash and cash equivalents 17,157 16,749
Escrows and reserves 18,097 18,455
Accounts and other receivables, net of allowance for doubtful 10,701 11,404
accounts of $2,991 and $3,065, respectively
Accrued straight-line rents, net of allowance for doubtful accounts 19,814 18,028
of $299 and $369, respectively
Notes receivable, net 54,679 54,661
Investment in affiliates 73,300 72,518
Deferred costs, net 37,241 34,683
Prepaid expenses and other assets 10,821 9,275
Intangible assets, net 56,020 59,021
--------- ---------
Total assets $ 1,738,610 $ 1,739,752
==== ========= ===== =========
Liabilities:
Mortgage loans $ 408,241 $ 432,023
Senior notes 75,000 75,000
Secured term loans 20,000 30,000
Unsecured term loan 300,000 225,000
Unsecured revolving credit facility 107,000 183,000
Accounts payable and other liabilities 54,984 53,507
Accrued interest 3,765 2,782
Rents received in advance 11,326 11,550
Tenant security deposits 5,740 5,603
Deferred market rent, net 4,537 4,815
--------- ---------
Total liabilities 990,593 1,023,280
--------- ---------
Noncontrolling interests in the Operating Partnership 40,044 39,981
Equity:
160,000 115,000
Series A Preferred Shares, $25 par value, 50,000 shares
authorized; 6,400 and 4,600 shares issued and outstanding,
respectively
51 50
Common shares, $0.001 par value, 150,000 shares authorized; 50,722
and 50,321 shares issued and outstanding, respectively
Additional paid-in capital 799,605 798,171
Noncontrolling interests in consolidated partnerships 4,270 4,245
Accumulated other comprehensive loss (5,161) (5,849)
Dividends in excess of accumulated earnings (250,792) (235,126)
--------- ---- --------- -
Total equity 707,973 676,491
--------- ---------
Total liabilities, noncontrolling interests and equity $ 1,738,610 $ 1,739,752
==== ========= ===== =========
FIRST POTOMAC REALTY TRUST
Same-Property Analysis
(unaudited, dollars in thousands)
Same-Property NOI(1) Three Months Ended March 31,
2012 2011
---------------------- ------------------
Total base rent $ 31,491 $ 31,031
Tenant reimbursements and other 6,534 7,372
Property operating expenses (9,136) (9,974)
Real estate taxes and insurance (3,750) (3,790)
------- ------ ------- ----
Same-Property NOI - accrual basis(2) 25,139 24,639
Straight-line revenue, net (106) (62)
Deferred market rental revenue, net (181) (395)
------- ------ ------- ----
Same-Property NOI - cash basis(2) $ 24,852 $ 24,182
------ ------- ---- -------
Change in same-property NOI - accrual basis 2.0 %
Change in same-property NOI - cash basis 2.8 %
Changes in Same-Property NOI - accrual basis
Rental revenue increase $ 460
Tenant reimbursements and other decrease (838)
Expense decrease 878
-------
$ 500
====== =======
Same-property percentage of total portfolio (sf) 92.1 %
Reconciliation of Consolidated NOI to Same-property NOI
Three Months Ended March 31,
2012 2011
---------------------- ------------------
Total revenues $ 46,772 $ 39,541
Property operating expenses (11,509) (10,546)
Real estate taxes and insurance (4,846) (3,898)
------- ------ ------- ----
NOI 30,417 25,097
Less: Non-same property NOI(2) (5,278) (458)
------- ------ ------- ----
Same-propertyNOI - accrual basis $ 25,139 $ 24,639
====== ======= ==== =======
Change in Same-Property NOI by Region Three Months Ended Percentage
March 31, 2012 of Base Rent
---------------------- ------------------
Washington, D.C. 3.6 % 8 %
Maryland 9.7 % 33 %
Northern Virginia 8.6 % 29 %
Southern Virginia (10.4)% 30 %
Three Months Ended Percentage
Change in Same-Property NOI by Property Type March 31, 2012 of Base Rent
------------------- ---------------
Business Park (0.7)% 42 %
Industrial (2.9)% 25 %
Office 11.9 % 33 %
(1) Same-property comparisons are based upon those consolidated
properties owned for the entirety of the periods presented.
Same-property results exclude the results of the following non
same-properties: Three Flint Hill, 440 First Street, NW, Cedar
Hill I & III, Merrill Lynch, 840 First Street, NE, One Fair Oaks,
Greenbrier Towers I & II, 1005 First Street, NE, Hillside Center,
Davis Drive and Woodlands Business Center.
(2) Non-same property NOI has been adjusted reflect a normalized
management fee percentage in lieu of an administrative overhead
allocation for comparative purposes.
SOURCE: First Potomac Realty Trust
First Potomac Realty Trust
Jaime Marcus, 301-986-9200
Manager, Investor Relations
jmarcus@first-potomac.com
Copyright Business Wire 2012
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