-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PVcFXPyAQYha+7lP9Z07dgnExKlQsnTkwS4EYLuduQOi5aC7cW2B4EO6qJGTRI0X gGbz3rJngPG0BrAKtJN2ww== 0000950134-05-004034.txt : 20050302 0000950134-05-004034.hdr.sgml : 20050302 20050302060423 ACCESSION NUMBER: 0000950134-05-004034 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050302 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20050302 DATE AS OF CHANGE: 20050302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOVERNMENT PROPERTIES TRUST INC CENTRAL INDEX KEY: 0001266112 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 386777356 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31962 FILM NUMBER: 05652240 MAIL ADDRESS: STREET 1: 120 REGENCY PARKWAY STREET 2: STE 116 CITY: OMAHA STATE: NE ZIP: 68114 8-K 1 c92676e8vk.txt CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) March 2, 2005 -------------------------------- GOVERNMENT PROPERTIES TRUST, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 1-31962 20-0611663 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 10250 Regency Circle, Suite 100, Omaha, Nebraska 68114 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (402) 391-0010 ------------------------------ None - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On March 1, 2005, Government Properties Trust, Inc. (the "Company") announced its financial results for the three months and year ended December 31, 2004. A copy of the Company's earnings press release is furnished as Exhibit 99.1 to this report on Form 8-K. A copy of the Company's Supplemental Operating and Financial Data package is furnished as Exhibit 99.2 to this report on Form 8-K. The information contained in this report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GOVERNMENT PROPERTIES TRUST, INC. Date: March 2, 2005 By: /s/ Nancy D. Olson -------------------------------------- Nancy D. Olson Chief Financial Officer and Treasurer EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION 99.1 Government Properties Trust, Inc. Press Release dated March 1, 2005 99.2 Government Properties Trust, Inc. Quarter Ended December 31, 2004 Supplemental Operating and Financial Data EX-99.1 2 c92676exv99w1.txt PRESS RELEASE EXHIBIT 99.1 10250 Regency Circle, Suite 100 Omaha, Nebraska 68114 402-391-0010 Fax 402-391-4144 www.gptrust.com NYSE: GPP (GPT LOGO) FOR FURTHER INFORMATION: AT THE COMPANY: AT FINANCIAL RELATIONS BOARD: Nancy D. Olson Marilyn Windsor Diane Hettwer CFO/Treasurer General Inquiries Analyst Inquiries 402-391-0010 Ext. 202 702-515-1260 312-640-6760 FOR IMMEDIATE RELEASE TUESDAY, MARCH 1, 2005 GOVERNMENT PROPERTIES TRUST ANNOUNCES FOURTH-QUARTER, YEAR-END 2004 FINANCIAL RESULTS OMAHA, NEB.--MARCH 1, 2005--GOVERNMENT PROPERTIES TRUST, INC. (NYSE: GPP), a self-managed, self-administered real estate investment trust, today announced results for the fourth quarter and year ended December 31, 2004. FOURTH-QUARTER 2004 RESULTS Funds from operations (FFO) was $1.4 million, or $0.07 per diluted share, and net income was $526,000, or $0.03 per diluted share, for the quarter ended December 31, 2004. This compares with FFO for the quarter ended December 31, 2003 of $207,000, or $0.21 per diluted share, and a net loss of ($43,000), or ($0.04) per diluted share. The weighted average number of diluted shares outstanding was 20.7 million for the quarter ended December 31, 2004 and 975,552 for the same quarter in 2003. Total revenue for the three months ended December 31, 2004 was $4.2 million compared with $1.0 million for the same quarter in 2003. See the attachment to this press release for a reconciliation of FFO and net income (loss), the most directly comparable Generally Accepted Accounting Principles (GAAP) measure. SIGNIFICANT FOURTH-QUARTER EVENTS - - Completed the acquisition of the 79,000-square-foot Food and Drug Administration Building in College Park, Md., for a contract purchase price of $22.3 million. - - Completed the acquisition of the 81,000-square-foot Bureau of Public Debt Headquarters in Parkersburg, W.V., for a contract purchase price of $19.9 million. - - Completed the acquisition of the 33,000-square-foot U. S. Citizenship and Immigration Services Building in Pittsburgh, Pa., for a contract purchase price of $10.4 million. - - Completed the disposition of the Federal Express Building in Harahan, La., for $4.6 million. - - Declared fourth-quarter dividend of $0.15 per share payable in January. SIGNIFICANT ACCOMPLISHMENTS SUBSEQUENT TO DECEMBER 31, 2004 - - Completed a $14.6 million, 15-year loan for the Hollings Judicial Center Annex in Charleston, S.C. The loan carries a fixed rate of 5.867 percent amortized over 30 years. - - Completed a $4.8 million, 15-year loan for the Veterans Administration Outpatient Clinic in Baton Rouge, La. The loan carries a fixed rate of 5.867 percent amortized over 30 years. MORE GOVERNMENT PROPERTIES TRUST, INC. ADD 1 - - Completed a $1.4 million, 15-year loan for the Drug Enforcement Administration building in Bakersfield, Cailf. The loan carries a fixed rate of 5.867 percent amortized over 30 years. 2004 RESULTS FFO for the year ended December 31, 2004 was ($431,000) or ($0.02) per diluted share. This compares with FFO for the year ended December 31, 2003 of $375,000, or $0.45 per diluted share. Net loss for the year ended December 31, 2004 was ($2.7) million, or ($0.14) per diluted share. This compares with a net loss of ($382,000), or ($0.46) per diluted share, for the year ended December 31, 2003. The weighted average number of diluted shares outstanding during 2004 was 19.1 million compared with 836,133 for 2003. Revenue for 2004 was $9.5 million compared with $2.8 million for 2003. PORTFOLIO OVERVIEW On December 31, 2004, Government Properties Trust's portfolio consisted of 12 properties totaling approximately 627,000 rentable square feet with an aggregate contract purchase price of $155.0 million. The properties are 98 percent occupied and have a weighted average remaining lease term of approximately 12 years. ACQUISITION UPDATE Currently, Government Properties Trust has six properties consisting of approximately 710,000 square feet of rentable space under contract or letter of intent for an aggregate purchase price of approximately $176.0 million at an indicated weighted average capitalization rate of 8.31 percent. Assuming the Company is able to close the purchase of all of the foregoing properties as currently contemplated, these closings are expected to occur between March 2005 and the second quarter of 2006. Included in properties under contract are two properties, one priced at $49.0 million and the other at $71.0 million, consisting of 226,000 and 270,000 rentable square feet, respectively. These properties would represent the Company's largest acquisitions to date. Assuming Government Properties Trust is able to close the purchase of these properties as currently contemplated, the $49.0 million property is expected to close in March 2005 and the $71.0 million property is expected to close early in the second quarter of 2005. In addition, the Company has 14 acquisition prospects currently in various stages of internal underwriting and due diligence consisting of over 2.7 million square feet of rentable space, representing an aggregate purchase price of $643.0 million. "The foundation we built in 2004, our first year of operations, will allow us to focus on acquisitions and the deployment of our funds in 2005. Our goal remains to be fully deployed by year end, enjoying the full impact of these rental receipts in first quarter of 2006." stated Thomas D. Peschio, Government Properties Trust's President and Chief Executive Officer. FOURTH-QUARTER CONFERENCE CALL AND WEBCAST Government Properties Trust will hold a conference call to discuss fourth-quarter results at 11:00 a.m. Eastern time on Wednesday, March 2, 2005. The conference call will be simulcast live on the Internet, and can be accessed by logging onto www.vcall.com or the Company's Web site at www.gptrust.com. A replay will be available at the company's site. MORE GOVERNMENT PROPERTIES TRUST, INC. ADD 2 SUPPLEMENTAL QUARTERLY FINANCIAL AND OPERATING DATA Government Properties Trust publishes supplemental quarterly financial and operating data that can be found under the Investor Relations section of the company's Web site at www.gptrust.com. ABOUT GOVERNMENT PROPERTIES TRUST, INC. Government Properties Trust, Inc. invests primarily in single tenant properties under long-term leases to the U.S. government. Government Properties Trust, Inc. is a self-managed, self-administered real estate investment trust, or REIT. The company is located at 10250 Regency Circle, Suite 100, Omaha, NE 68114. LEGAL NOTICES Forward-looking information This press release contains forward-looking statements. These forward-looking statements include estimates regarding: - - the expected revenues from our properties, - - our use of Offering proceeds, and - - our growth strategy and intentions. These and other forward-looking statements can be identified by the use of words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "continue," or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including the fact that our management only recently joined us; we must invest the proceeds of our recent Offering on acceptable terms and timeframes; we depend on the U.S. government for a significant portion of our revenues; our properties may have a higher risk of terrorist attack because the U.S. government is our principal tenant; we plan to incur debt to finance, on average, approximately 75% of the acquisition cost of the properties we buy; some of our leases may not provide for a full pass-through of increases in property operating costs; we may make distributions that include a return of capital as well as the other the risks discussed from time to time in our SEC filings. All forward-looking statements included in this press release are based on information available to us on the date hereof. We assume no obligation to update any forward-looking statements. Non-GAAP Financial Information This press release contains non-GAAP financial information, including funds from operations (FFO). This press release also contains the most directly comparable GAAP information and a GAAP to non-GAAP reconciliation. We believe FFO is useful to investors as an indicator of our ability to service debt and pay cash distributions. We use FFO for internal budgeting and planning purposes. FFO, as calculated by us, may not be comparable to FFO reported by other companies that do not define these terms exactly as we define them. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income MORE GOVERNMENT PROPERTIES TRUST, INC. ADD 3 or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of liquidity. For additional information, please visit the Government Properties Trust, Inc. web site at www.gptrust.com. FINANCIAL TABLES AND NON-GAAP TO GAAP RECONCILIATIONS FOLLOW: MORE GOVERNMENT PROPERTIES TRUST, INC. ADD 4 GOVERNMENT PROPERTIES TRUST, INC. CONSOLIDATED BALANCE SHEETS
DECEMBER 31, ------------ 2004 2003 ------------- ------------- ASSETS Real estate at cost: Land .................................................................................. $ 13,713,237 $ 4,545,637 Buildings and improvements ............................................................ 117,069,518 24,050,859 Tenant origination costs .............................................................. 26,628,718 6,200,441 Real estate under development ......................................................... 1,180,523 -- Furniture and equipment ............................................................... 185,818 34,486 ------------- ------------- 158,777,814 34,831,423 Accumulated depreciation .............................................................. (3,407,147) (757,400) ------------- ------------- 155,370,667 34,074,023 Cash and cash equivalents .............................................................. 93,814,813 760,859 Restricted cash escrows ................................................................ 2,103,338 268,885 Tenant receivables ..................................................................... 1,501,850 332,651 Notes receivable from tenant ........................................................... 665,216 111,773 Deferred costs, net .................................................................... 937,156 1,948,350 Real estate deposits ................................................................... 685,993 500,000 Property held for sale ................................................................. -- 4,266,438 Other assets ........................................................................... 1,241,554 411,607 ------------- ------------- Total assets ........................................................................... $ 256,320,587 $ 42,674,586 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable and accrued expenses ................................................. $ 3,226,655 $ 2,116,101 Dividends payable ..................................................................... 3,104,340 147,536 Lines of credit ....................................................................... -- 3,047,655 Mortgage notes payable ................................................................ 77,584,897 24,647,478 Mortgage note payable-- affiliate ..................................................... -- 1,639,219 Liabilities related to property held for sale ......................................... -- 3,195,359 Advances from affiliate ............................................................... -- 102,873 ------------- ------------- Total liabilities ...................................................................... 83,915,892 34,896,221 Stockholders' equity: Common stock ($0.01 par value at December 31, 2004 and $10 par value at December 31, 2003; 50,000,000 shares authorized, 20,695,567 and 975,552 shares issued and outstanding at December 31, 2004 and 2003, respectively) ........................................................................ 205,223 8,682,228 Additional paid-in capital ............................................................ 188,259,230 -- Accumulated deficit ................................................................... (16,059,758) (903,863) ------------- ------------- Total stockholders' equity ............................................................. 172,404,695 7,778,365 ------------- ------------- Total liabilities and stockholders' equity ............................................. $ 256,320,587 $ 42,674,586 ============= =============
MORE GOVERNMENT PROPERTIES TRUST, INC. ADD 5 GOVERNMENT PROPERTIES TRUST, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, -------------------------------- -------------------------------- 2004 2003 2004 2003 ------------ ------------ ------------ ------------ Revenue: Rental income .................................... $ 4,031,516 $ 998,706 $ 9,091,592 $ 2,812,476 Tenant reimbursements ............................ 60,876 -- 366,727 -- ------------ ------------ ------------ ------------ Total revenue ...................................... 4,192,392 998,706 9,458,319 2,812,476 Expenses: Property operations .............................. 723,268 236,147 1,849,838 623,178 Real estate taxes ................................ 386,506 66,421 964,934 238,170 Depreciation and amortization .................... 1,212,756 253,677 2,649,747 764,089 General and administrative ....................... 994,204 39,159 4,020,414 440,668 ------------ ------------ ------------ ------------ Total expenses ..................................... 3,316,734 595,404 9,484,933 2,066,105 ------------ ------------ ------------ ------------ Operating (loss) income ............................ 875,658 403,302 (26,614) 746,371 Other income (expense): Interest income .................................. 481,508 (20,874) 1,719,925 21,635 Expense .......................................... (1,054,698) (433,272) (2,481,219) (1,188,050) Expense from issuance of warrant ................. -- -- (2,097,900) -- Amortization of deferred financing fees .......... (101,510) 5,231 (271,595) (9,230) ------------ ------------ ------------ ------------ Income (loss) from continuing operations ........... 200,958 (45,614) (3,157,403) (429,274) ------------ ------------ ------------ ------------ Discontinued operations: Gain from disposal of property ................... 313,857 -- 313,857 -- Income from property held for sale ............... 11,491 2,675 100,015 47,158 ------------ ------------ ------------ ------------ Income from discontinued operations ................ 325,348 2,675 413,872 47,158 ------------ ------------ ------------ ------------ Net income (loss) .................................. $ 526,306 $ (42,939) $ (2,743,531) $ (382,116) ============ ============ ============= ============ Earnings per share: Income (loss) from continuing operations.......... $ 0.01 $ (0.04) $ (0.16) $ (0.51) Income from discontinued operations .............. 0.02 0.00 0.02 0.05 ============ ============ ============ ============ Net income (loss) ................................ $ 0.03 $ (0.04) $ (0.14) $ (0.46) ============ ============ ============ ============ Distributions declared per share ................... $ 0.15 $ 0.15 $ 0.60 $ 0.60 ============ ============ ============ ============ Weighted average shares outstanding (1) ............ 20,693,202 975,552 19,071,652 836,133 ============ ============ ============ ============
(1) For the three months ended December 31, 2003 and for the years ended December 31, 2004 and 2003, basic and diluted weighted average shares outstanding are the same due to the net loss recorded for these periods. For the three months ended December 31, 2004 the basic and diluted weighted average shares outstanding were 20,518,535 and 20,693,202, respectively. MORE GOVERNMENT PROPERTIES TRUST, INC. ADD 6 GOVERNMENT PROPERTIES TRUST, INC CONSOLIDATED STATEMENTS OF CASH FLOWS
DECEMBER 31, ------------ 2004 2003 ------------- ------------- OPERATING ACTIVITIES Net loss ..................................................................... $ (2,743,531) $ (382,116) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization ............................................... 2,649,747 764,089 Amortization of deferred financing fees ..................................... 271,595 9,230 Expense from issuance of warrants ........................................... 2,097,900 -- Compensation expense ........................................................ 864,673 -- Gain from disposal of property .............................................. (313,857) -- Changes in assets and liabilities: Restricted cash escrows ................................................... (1,834,453) (268,885) Tenant receivables ........................................................ (1,169,199) (332,651) Note receivable from tenant ............................................... (553,443) (111,773) Other assets .............................................................. (829,947) (254,979) Accounts payable and accrued expenses ..................................... 1,527,457 193,804 ------------- ------------- Net cash (used in) provided by operating activities .................................................................. (33,058) (383,281) INVESTING ACTIVITIES Expenditures for real estate ................................................. (104,464,536) (34,702,876) Expenditures for furniture and equipment ..................................... (151,332) -- Development of real estate assets ............................................ (1,180,523) Proceeds from sale of real estate ............................................ 1,457,223 -- Deposits on future real estate purchases ..................................... (500,993) (500,000) ------------- ------------- Net cash used in investing activities ........................................ (104,840,161) (35,202,876) FINANCING ACTIVITIES Financing fees ............................................................... (1,113,289) (134,709) Net (repayments) borrowings under lines of credit ............................ (3,047,655) 2,709,788 Proceeds from mortgage notes payable ......................................... 37,000,000 24,821,134 (Repayments) proceeds of mortgage note payable -- affiliate ........................................................ (1,639,219) 1,639,219 (Repayments) proceeds of advances from affiliate ................................................................... (102,873) (93,589) Principal payments on mortgage notes payable ................................. (754,852) (173,656) Net proceeds from sale of common stock ....................................... 193,202,095 5,715,220 Deferred offering costs paid ................................................. (16,161,474) (80,969) Dividends paid ............................................................... (9,455,560) (369,741) ------------- ------------- Net cash provided by financing activities .................................................................. 197,927,173 34,032,697 ------------- ------------- Net increase (decrease) in cash .............................................. 93,053,954 (1,553,460) Cash, beginning of year ...................................................... 760,859 2,314,319 ------------- ------------- Cash, end of year ............................................................ $ 93,814,813 $ 760,859 ============= =============
MORE GOVERNMENT PROPERTIES TRUST, INC. ADD 0 GOVERNMENT PROPERTIES TRUST, INC FFO RECONCILIATION
THREE MONTHS YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, ------------------ ------------ 2004 2003 2004 2003 ------------ ------------ ------------ ------------ Net income (loss) .......................................... $ 526,306 $ (42,939) $ (2,743,531) $ (382,116) Adjustments to reconcile to funds from Operations: Gain from disposal of property ............................ (313,857) -- (313,857) -- Real estate depreciation and amortization (1) ............. 1,205,464 249,612 2,626,193 757,400 ------------ ------------ ------------ ------------ Funds from Operations ...................................... $ 1,417,913 $ 206,673 $ (431,195) $ 375,284 ============ ============ ============ ============ Funds from Operations per common share ..................... $ 0.07 $ 0.21 $ (0.02) $ 0.45 ============ ============ ============ ============ Weighted average shares outstanding (2) .................... 20,693,202 975,552 19,071,652 836,133 ============ ============ ============ ============
(1) Excludes depreciation of non-real estate assets of $7,293 and $4,065 for the three months ended December 31, 2004 and 2003, respectively, and $23,554 and $6,690 for the year ended December 31, 2004 and 2003, respectively. (2) For the three months ended December 31, 2003 and for the years ended December 31, 2004 and 2003, basic and diluted weighted average shares outstanding are the same due to the net loss for these periods. For the three months ended December 31, 2004, the basic and diluted shares outstanding were 20,518,535 and 20,693,202, respectively. ### EX-99.2 3 c92676exv99w2.txt SUPPLEMENTAL OPERATING AND FINANCIAL DATA EXHIBIT 99.2 GOVERNMENT PROPERTIES TRUST, INC. Supplemental Operating and Financial Data For the Quarter Ended December 31, 2004 [GPT LOGO] 1 TABLE OF CONTENTS CORPORATE DATA Company Background 3 Investor Information/Common Stock Data/Dividend Per Share 4 CONSOLIDATED FINANCIAL RESULTS Financial Highlights 5 Consolidated Balance Sheets 6 Consolidated Statements of Operations 7 Consolidated Statements of Cash Flows 8 Funds from Operations 9 Reconciliation of Earnings Before Interest, Taxes and Depreciation 10 and Amortization Debt Summary 11 PORTFOLIO DATA Portfolio Overview 12 Occupancy and Delinquency Rates 13 Forward-looking information and Non-GAAP information 14
[GPT LOGO] 2 COMPANY BACKGROUND Government Properties Trust, Inc. invests primarily in single tenant properties under long-term leases to the U.S. government, state governments, local governments, and government-sponsored enterprises. We are a self-managed, self-administered real estate investment trust, or REIT. We believe that we are the only public company focused solely on investing in government-leased properties. Our business consists of buying and managing recently built or renovated office properties primarily leased to the federal government, acting through the General Services Administration ("GSA"), the federal government's property management arm, under long-term leases. We began formal operations with our first property acquisition in December 2002. At December 31, 2004, we owned twelve GSA-leased properties located throughout the United States (one property acquired in the first quarter of 2003, three properties in the second quarter of 2003, one property acquired in the second quarter of 2004, two properties acquired in the second quarter of 2004, two properties acquired in the third quarter of 2004 and three properties acquired in the fourth quarter of 2004). These properties are 98% occupied and had a weighted-average remaining lease term of approximately 12 years based on the square footage of the properties as of December 31, 2004. We own each of our properties through separate wholly-owned entities. We intend to expand our portfolio by acquiring additional primarily government-leased properties. We completed an initial public offering of our common stock and listed our common stock on the NYSE in January 2004. In connection with this offering, we received net proceeds (after expenses) of approximately $177 million. At this time, we also reincorporated in Maryland and changed our name to Government Properties Trust, Inc. The historical operations included in the consolidated financial statements are those of our predecessor company (Gen-Net Lease Income Trust, Inc.). This Supplemental Operating and Financial Data package supplements the information provided in our annual and quarterly reports filed with the Securities and Exchange Commission (SEC). Additional information about us and our properties is also available at our website www.gptrust.com. [GPT LOGO] 3 INVESTOR INFORMATION BOARD OF DIRECTORS Jerry D. Bringard Robert M. Ames Chairman Spencer I. Browne Philip S. Cottone Robert A. Peck Thomas D. Peschio Richard H. Schwachter MANAGEMENT Thomas D. Peschio Nancy D. Olson President & Chief Executive Officer Chief Financial Officer, Treasurer Oscar Peterson D. Gary Marron Director of Asset Acquisition Director of Asset Management James E. Okell Edward C. Fuxa Director of Acquisition Processing Director of Accounting and Finance John D. Ellsworth General Counsel COMPANY INFORMATION CORPORATE HEADQUARTERS INVESTOR RELATIONS CONTACT 10250 Regency Circle Sharon D. Latham Suite 100 (402) 391-0010 ext. 207 Omaha, Nebraska 68114 (402) 391-4144 (fax) (402) 391-0010 slatham@gptrust.com TRADING MARKET Our common stock is traded on the New York Stock Exchange under the symbol "GPP." Our common stock began trading on January 27, 2004. DIVIDENDS We declared our initial dividend of $0.075 per share of common stock, which we paid on January 31, 2003. We paid subsequent quarterly dividends of $0.15 per share on April 15, 2003, July 15, 2003, October 15, 2003, January 15, 2004, April 15, 2004, July 15, 2004, October 15, 2004 and January 15, 2005. [GPT LOGO] 4 GOVERNMENT PROPERTIES TRUST, INC. FOURTH QUARTER 2004 FINANCIAL HIGHLIGHTS
(UNAUDITED) ----------- THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ------------ ------------ 2004 2003 2004 2003 ------------- ----------- ----------- ----------- INCOME ITEMS Total revenue ................................... $ 4,192,392 $ 998,706 $ 9,458,319 $ 2,812,476 Income(loss) from continuing operations(1) 200,958 (45,614) (3,157,403) (429,274) Net income(loss)................................. 526,306 (42,939) (2,743,531) (382,116) Income(loss) from continuing operations per share ..................................... 0.01 (0.04) (0.16) (0.51) Net income(loss) per common share ............... 0.03 (0.04) (0.14) (0.46) Funds from operations (FFO) ..................... 1,417,913 206,673 (431,195) 375,284 FFO per common share ............................ 0.07 0.21 (0.02) (0.02) Earnings before interest, taxes and depreciation and amortization (EBITDA) ........ 2,793,760 644,010 2,659,030 1,570,021 Dividends declared per share .................... 0.60 0.60 0.60 0.60
DECEMBER 31, DECEMBER 31, 2004 2003 ---- ---- BALANCE SHEET ITEMS Investment in real estate, net...................$ 155,370,667 $ 34,074,023 Total cash and cash equivalents.................. 95,918,151 1,029,744 Total debt....................................... 77,584,897 29,437,225 (1) Includes expense of $2,097,900 in the first quarter of 2004 for issuance of warrant. (2) For reconciliation of the difference between FFO and net loss, see page 9. (3) For reconciliation of the difference between EBITDA and net loss, see page 10.
[GPT LOGO] 5 GOVERNMENT PROPERTIES TRUST, INC. FOURTH QUARTER 2004 CONSOLIDATED BALANCE SHEETS
DECEMBER 31, DECEMBER 31, 2004 2003 ------------- ------------- ASSETS Real estate at cost: Land ................................................................... $ 13,713,237 $ 4,545,637 Buildings and improvements ............................................. 117,069,518 24,050,859 Tenant origination costs ............................................... 26,628,718 6,200,441 Real estate under development .......................................... 1,180,523 -- Furniture and equipment ................................................ 185,818 34,486 ------------- ------------- 158,777,814 34,831,423 Accumulated depreciation ............................................... (3,407,147) (757,400) ------------- ------------- 155,370,667 34,074,023 Cash and cash equivalents ................................................ 93,814,813 760,859 Restricted cash escrows .................................................. 2,103,338 268,885 Tenant receivables ....................................................... 1,501,850 332,651 Notes receivable from tenant ............................................. 665,216 111,773 Deferred costs, net ...................................................... 937,156 1,948,350 Real estate deposits ..................................................... 685,993 500,000 Property held for sale ................................................... -- 4,266,438 Other assets ............................................................. 1,241,554 411,607 ------------- ------------- Total assets ............................................................. $ 256,320,587 $ 42,674,586 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable and accrued expenses .................................. $ 3,226,655 $ 2,116,101 Dividends payable ...................................................... 3,104,340 147,536 Lines of credit ........................................................ -- 3,047,655 Mortgage notes payable ................................................. 77,584,897 24,647,478 Mortgage note payable-- affiliate ...................................... -- 1,639,219 Liabilities related to property held for sale .......................... -- 3,195,359 Advances from affiliate ................................................ -- 102,873 ------------- ------------- Total liabilities ........................................................ 83,915,892 34,896,221 Stockholders' equity: Common stock ($0.01 par value at December 31, 2004 and $10 par value at December 31, 2003; 50,000,000 shares authorized, 20,695,567 and 975,552 shares issued and outstanding at December 31, 2004 and 2003, respectively) ............................................... 205,223 8,682,228 Additional paid-in capital ............................................. 188,259,230 -- Accumulated deficit .................................................... (16,059,758) (903,863) ------------- ------------- Total stockholders' equity ............................................... 172,404,695 7,778,365 ------------- ------------- Total liabilities and stockholders' equity ............................... $ 256,320,587 $ 42,674,586 ============= =============
[GPT LOGO] 6 GOVERNMENT PROPERTIES TRUST, INC. FOURTH QUARTER 2004 CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ------------------------------- ------------------------------- 2004 2003 2004 2003 ------------------------------- ------------------------------- Revenue: Rental income ...................................... $ 4,031,516 $ 998,706 $ 9,091,592 $ 2,812,476 Tenant reimbursements .............................. 160,876 -- 366,727 -- ------------ ------------ ------------ ------------ Total revenue ......................................... 4,192,392 998,706 9,458,319 2,812,476 Expenses: Property operations ................................ 723,268 236,147 1,849,838 623,178 Real estate taxes .................................. 386,506 66,421 964,934 238,170 Depreciation and amortization ...................... 1,212,756 253,677 2,649,747 764,089 General and administrative ......................... 994,204 39,159 4,020,414 440,668 ------------ ------------ ------------ ------------ Total expenses ........................................ 3,316,734 595,404 9,484,933 2,066,105 ------------ ------------ ------------ ------------ Operating (loss) income ............................... 875,658 403,302 (26,614) 746,371 Other income (expense): Interest income .................................... 481,508 (20,874) 1,719,925 21,635 Expense ............................................ (1,054,698) (433,272) (2,481,219) (1,188,050) Expense from issuance of warrant ................... -- -- (2,097,900) -- Amortization of deferred financing fees ............ (101,510) 5,231 (271,595) (9,230) ------------ ------------ ------------ ------------ Income (loss) from continuing operations .............. 200,958 (45,614) (3,157,404) (429,274) ------------ ------------ ------------ ------------ Discontinued operations: Gain from disposal of property ..................... 313,857 -- 313,857 -- Income from property held for sale ................. 11,491 2,675 100,015 47,158 ------------ ------------ ------------ ------------ Income from discontinued operations ................... 325,348 2,675 413,872 47,158 ------------ ------------ ------------ ------------ Net income (loss) ..................................... $ 526,306 $ (42,939) $ (2,743,531) $ (382,116) ============ ============ ============ ============ Earnings per share: Income (loss) from continuing operations ........... $ 0.01 $ (0.04) $ (0.16) $ (0.51) Income from discontinued operations ................ 0.02 0.00 0.02 0.05 ============ ============ ============ ============ Net income (loss) .................................. $ 0.03 $ 0.04 $ (0.14) $ (0.46) ============ ============ ============ ============ Distributions declared per share ...................... $ 0.15 $ 0.15 $ 0.60 $ 0.60 ============ ============ ============ ============ Weighted average shares outstanding(1) ................ 20,693,202 975,552 19,071,652 836,133 ============ ============ ============ ============ (1) For the three months ended December 31, 2003 and for the years ended December 31, 2004 and 2003, basic and diluted weighted average shares outstanding are the same due to the net loss recorded for these periods. For the three months ended December 31, 2004 the basic and diluted weighted average shares outstanding were 20,518,535 and 20,693,202, respectively.
[GPT LOGO] 7 GOVERNMENT PROPERTIES TRUST, INC. FOURTH QUARTER 2004 CONSOLIDATED STATEMENTS OF CASH FLOWS
DECEMBER 31, ------------ 2004 2003 ------------- ------------- OPERATING ACTIVITIES Net loss .......................................... $ (2,743,531) $ (382,116) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization ................... 2,649,747 764,089 Amortization of deferred financing fees ........ 271,595 9,230 Expense from issuance of warrants ............... 2,097,900 -- Compensation expense ............................ 864,673 -- Gain from disposal of property .................. (313,857) -- Changes in assets and liabilities: Restricted cash escrows ...................... (1,834,453) (268,885) Tenant receivables ........................... (1,169,199) (332,651) Note receivable from tenant .................. (553,443) (111,773) Other assets ................................. (829,947) (254,979) Accounts payable and accrued expenses ........ 1,527,457 193,804 ------------- ------------- Net cash (used in) provided by operating activities ...................................... (33,058) (383,281) INVESTING ACTIVITIES Expenditures for real estate ...................... (104,464,536) (34,702,876) Expenditures for furniture and equipment .......... (151,332) -- Development of real estate assets ................. (1,180,523) Proceeds from sale of real estate ................. 1,457,223 -- Deposits on future real estate purchases .......... (500,993) (500,000) ------------- ------------- Net cash used in investing activities ............. (104,840,161) (35,202,876) FINANCING ACTIVITIES Financing fees .................................... (1,113,289) (134,709) Net (repayments) borrowings under lines of credit (3,047,655) 2,709,788 Proceeds from mortgage notes payable .............. 37,000,000 24,821,134 (Repayments) proceeds of mortgage note payable-- affiliate ............................. (1,639,219) 1,639,219 (Repayments) proceeds of advances from affiliate ....................................... (102,873) (93,589) Principal payments on mortgage notes payable ...... (754,852) (173,656) Net proceeds from sale of common stock ............ 193,202,095 5,715,220 Deferred offering costs paid ...................... (16,161,474) (80,969) Dividends paid .................................... (9,455,560) (369,741) ------------- Net cash provided by financing activities ...................................... 197,927,173 34,032,697 ------------- ------------- Net increase (decrease) in cash ................... 93,053,954 (1,553,460) Cash, beginning of year ........................... 760,859 2,314,319 ------------- ------------- Cash, end of year ................................. $ 93,814,813 $ 760,859 ============= =============
[GPT LOGO] 8 GOVERNMENT PROPERTIES TRUST, INC. FOURTH QUARTER 2004 FUNDS FROM OPERATIONS
THREE MONTHS YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, ------------------ ------------ 2004 2003 2004 2003 ------------ ------------ ------------ ------------ Net income (loss) ................................... $ 526,306 $ (42,939) $ (2,743,531) $ (382,116) Adjustments to reconcile to funds from Operations: Gain from disposal of property .................... (313,857) -- (313,857) -- Real estate depreciation and amortization (1) ..... 1,205,464 249,612 2,626,193 757,399 ------------ ------------ ------------ ------------ Funds from Operations ............................... $ 1,417,913 $ 206,673 $ (431,195) $ 375,283 ============ ============ ============ ============ Funds from Operations per common share .............. $ 0.07 $ 0.02 $ (0.02) $ 0.44 ============ ============ ============ ============ Weighted average shares outstanding (2) ............. 20,693,202 975,552 19,071,652 836,133 ============ ============ ============ ============ (1) Excludes depreciation of non-real estate assets of $7,293 and $4,065 for the three months ended December 31, 2004 and 2003, respectively, and $23,554 and $6,690 for the year ended December 31, 2004 and 2003, respectively. (2) For the three months ended December 31, 2003 and for the years ended December 31, 2004 and 2003, basic and diluted weighted average shares outstanding are the same due to the net loss for these periods. For the three months ended December 31, 2004, the basic and diluted weighted average shares outstanding were 20,518,535 and 20,693,202, respectively.
[GPT LOGO] 9 GOVERNMENT PROPERTIES TRUST, INC. FOURTH QUARTER 2004 EARNINGS BEFORE INTEREST, TAXES AND DEPRECIATION AND AMORTIZATION
THREE MONTHS YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, ------------------ ------------ 2004 2003 2004 2003 ----------- ----------- ----------- ----------- Net income (loss) ................................. $ 526,306 $ (42,939) $(2,743,531) $ (382,116) Adjustments for: Depreciation and amortization ................... 1,212,756 253,677 2,649,747 764,089 Interest expense ................................ 1,054,698 433,272 2,481,219 1,188,050 Expense from issuance of warrant (1) ............ -- -- 2,097,900 -- ----------- ----------- ----------- ----------- Earnings before interest, taxes and depreciation and amortization .............................. .. $ 2,793,760 $ 644,010 $ 4,485,335 $ 2,334,255 =========== =========== =========== ===========
(1) Relates to a non-cash expense for the issuance of a warrant in the first quarter of 2004. [GPT LOGO] 10 GOVERNMENT PROPERTIES TRUST, INC. FOURTH QUARTER 2004 DEBT SUMMARY
INTEREST PRINCIPAL MATURITY DUE AT RATE BALANCE DATE DATE ----------- ----------- ------------ ----------- FIXED INTEREST RATE DEBT Charleston SSA Property ........... 5.74% $13,732,629 05/01/2013 $11,868,419 Clarksburg GSA Property ........... 5.74% 8,166,010 05/01/2013 7,056,282 Kingsport SSA Property ............ 8.23% 2,249,002 04/01/2010 2,008,307 Lenexa FDA Property ............... 5.44% 7,958,571 08/11/2009 7,285,440 Pittsburgh FBI Property ........... 5.50% 20,883,988 08/01/2009 19,033,415 College Park FDA Property ......... 6.75% 16,594,698 01/01/2026 121,230 Pittsburgh USCIS Property ......... 5.13% 8,000,000 12/11/2011 6,893,021 ----------- ----------- $77,784,898 $54,266,114 =========== ===========
DEBT MATURITIES
YEAR ENDING DECEMBER 31 AMOUNT 2005........................ $ 16,996,272 2006........................ 16,996,272 2007........................ 17,049,916 2008........................ 17,157,204 2009........................ 17,157,204 Thereafter.................. 120,820,246 ------------- $ 206,177,114 =============
[GPT LOGO] 11 GOVERNMENT PROPERTIES TRUST, INC. FOURTH QUARTER 2004 PROPERTY PORTFOLIO
LEASE GROSS MATURITY/ TENANT/ YEAR BUILT/ SQ. FT. RENT/ ANNUALIZED EARLY LOCATION OCCUPANT RENOVATED LEASED SQ. FOOT RENT TERMINATION LEASE TYPE - ----------------------- -------------------- ------------ ---------- ---------- ------------ -------------- ----------- United States of American/Drug Bakersfield, California Enforcement Nov. 2010/ Modified Administration 2000 9,800 $ 32.11 $ 314,640 Nov. 2008 Gross Lease United States of America/Social Kingsport, Tennessee Security Oct. 2014/ Modified Administration 1999 22,848 $ 17.36 $ 396,624 Oct. 2009 Gross Lease United States of Charleston, West America/Social Virginia Security Dec. 2019/ Modified Administration 1959/1999 90,050 $ 22.25 $ 2,004,360 None Gross Lease United States of America/Department of Justice, Drug Enforcement Clarksburg, West Administration, Virginia Federal Bureau of Investigation, 1998 55,443 $ 23.26 $ 1,289,724 Jan. 2019/ Modified Social Security Jan. 2016 Gross Lease Administration United States of Mineral Wells, West America/Bureau of Sep. 2017/ Modified Virginia Public Debt 2003 38,324 $ 12.79 $ 490,056 Sep. 2012 Gross Lease United States of Pittsburgh, America/Federal Oct. 2016/ Modified Pennsylvania Bureau of 2001 87,178 $ 37.13 $ 3,236,880 None Gross Lease Investigation United States of Lenexa, Kansas America Food and 1991 53,500 $ 22.03 $ 1,178,340 Jun. 2012/ Modified Drug Administration None Gross Lease United States of Baton Rouge, Louisiana America/Veterans 2004 30,000 $ 24.12 $ 723,600 Jun. 2019/ Modified Administration None Gross Lease United States of Charleston, South America/Federal 1999 44,250 $ 37.93 $ 1,678,608 Jul. 2019/ Modified Carolina Courthouse None Net Lease United States of College Park, Maryland America Food and 2004 65,760 $ 36.17 $ 2,378,316 Aug. 2014/ Modified Drug Administration None Gross Lease United States Pittsburgh, Citizenship and 2004 36,153 $ 33.17 $ 1,199,208 Feb. 2014/ Modified Pennsylvania Immigration Services None Gross Lease United States of Parkersburg, West America/Bureau of Aug. 2019/ Modified Virginia Public Debt 2004 80,657 $ 26.11 $ 2,105,916 None Gross Lease
[GPT LOGO] 12 GOVERNMENT PROPERTIES TRUST, INC. FOURTH QUARTER 2004 OCCUPANCY AND DELINQUENCY RATES During all of 2004 and 2003 each of our properties had no delinquencies. As of December 31, 2004, our total Property Portfolio is 98% occupied. The only vacancy is approximately 13,000 square feet in our College Park FDA property. [GPT LOGO] 13 GOVERNMENT PROPERTIES TRUST, INC. LEGAL NOTICES Forward-looking information This report contains forward-looking statements. These forward-looking statements include estimates regarding our gross annualized rent. These and other forward-looking statements can be identified by the use of words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "continue," or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including the fact that our management only recently joined us; we must invest the proceeds of our recent IPO on acceptable terms and timeframes; we depend on the U.S. government for a significant portion of our revenues; our properties may have a higher risk of terrorist attack because the U.S. government is our principal tenant; we plan to incur debt to finance, on average, approximately 75% of the acquisition cost of the properties we buy; some of our leases may not provide for a full pass-through of increases in property operating costs; we may make distributions that include a return of capital as well as the other the risks discussed from time to time in our SEC filings. All forward-looking statements included in this report are based on information available to us on the date hereof. We assume no obligation to update any forward-looking statements. Non-GAAP Financial Information This report contains non-GAAP financial information, including funds from operations (FFO) and earnings before interest, taxes, depreciation and amortization (EBITDA). This report also contains the most directly comparable GAAP information and a GAAP to non-GAAP reconciliation. We believe FFO and EBITDA are useful to investors as indicators of our ability to service debt and pay cash distributions. We use FFO and EBITDA for internal budgeting and planning purposes. FFO and EBITDA, as calculated by us, may not be comparable to FFO and EBITDA reported by other companies that do not define these terms exactly as we define them. FFO and EBITDA do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of liquidity. [GPT LOGO] 14 -----END PRIVACY-ENHANCED MESSAGE-----