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First Potomac Realty Trust Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 8, 2010 04:49PM

First Potomac Realty Trust (FPO) filed Quarterly Report for the period ended 2010-09-30. First Potomac Realty Trust has a market cap of $640.17 million; its shares were traded at around $16.87 with a P/E ratio of 12.78 and P/S ratio of 4.78. The dividend yield of First Potomac Realty Trust stocks is 4.74%. First Potomac Realty Trust had an annual average earning growth of 5.3% over the past 5 years.

FPO is in the portfolios of Pioneer Investments, Third Avenue Management.

Highlight of Business Operations:

The Company incurred a net loss attributable to common shareholders of $2.9 million, or $0.08 per diluted share, during the third quarter of 2010 compared with net income attributable to common shareholders of $0.6 million, or $0.02 per diluted share, during the third quarter of 2009. The Company’s funds from operations (“FFO”) for the third quarter of 2010 was $8.1 million, or $0.21 per diluted share, compared with FFO of $10.7 million, or $0.37 per diluted share, during the third quarter of 2009. FFO is a non-GAAP financial measure. For a description of FFO, including why management believes its presentation is useful and a reconciliation of FFO to net (loss) income attributable to common shareholders, see “Funds From Operations.”

For the nine months ended September 30, 2010, the Company incurred a net loss attributable to common shareholders of $5.0 million, or $0.16 per diluted share, compared with net income of $7.2 million, or $0.25 per diluted share, during the nine months ended September 30, 2009. The Company’s FFO for the nine months ended September 30, 2010 was $26.3 million, or $0.74 per diluted share, compared with FFO of $37.1 million, or $1.31 per diluted share, during the nine months ended September 30, 2009.

The decline in FFO and net (loss) income attributable to common shareholders for the three months ended September 30, 2010 compared with 2009 is primarily due to a $3.4 million impairment charge related a reduction in the Company’s intended holding period of its Old Courthouse Square property. The decline in FFO and net (loss) income attributable to common shareholders for the nine months ended September 30, 2010 compared with 2009 is primarily due to the Company reporting a $6.3 million gain on early retirement of debt during the nine months ended September 30, 2009, compared with a $0.2 million gain for the nine months ended September 30, 2010 and the $3.4 million impairment charge. Further, the Company’s FFO and net (loss) income attributable to common shareholders declined due to $0.7 million of additional snow and ice removal costs, net of recoveries, incurred in the first quarter of 2010 and acquisition costs totaling $2.0 million for the nine months ended September 30, 2010 compared with $0.1 million incurred during the same period in 2009. These costs were partially offset by a reduction in reserves for bad debt expense for the nine months ended September 30, 2010 compared with the same period in 2009.

Rental revenue is comprised of contractual rent, the impacts of straight-line revenue and the amortization of intangible assets and liabilities representing above and below-market leases. Rental revenue increased $1.5 million and $3.3 million for the three and nine months ended September 30, 2010, respectively, compared with the same periods in 2009, which was due to increased revenues resulting from the Company’s new acquisitions. The Non-comparable Properties contributed $2.1 million and $3.7 million of additional rental revenue for the three and nine months ended September 30, 2010, respectively. For the Comparable Portfolio, rental revenue decreased $0.6 million and $0.4 million for the three and nine months ended September 30, 2010, respectively, compared with 2009, primarily due to an increase in vacancy. The weighted average occupancy of the Comparable Portfolio was 84.6% and 86.9% for the three months ended and 85.0% and 86.8% for the nine months ended September 30, 2010 and 2009, respectively.

The increase in rental revenue for the three and nine months ended September 30, 2010 compared with 2009 includes $0.5 million and $0.9 million, respectively, for the Company’s Maryland reporting segment and $1.4 million and $2.6 million, respectively, for the Northern Virginia reporting segment. The Southern Virginia reporting segment experienced a decrease in rental revenue of $0.4 million and $0.2 million for the three and nine months ended September 30, 2010, respectively, compared with the same period in 2009.

The increases in tenant reimbursements and other revenues for the three and nine months ended September 30, 2010 compared with 2009 includes $0.4 million and $1.3 million, respectively, for the Company’s Maryland reporting segment, $0.1 million and $0.6 million, respectively, for the Northern Virginia reporting segment and $0.2 million and $0.4 million, respectively, for the Southern Virginia reporting segment.

Read the The complete Report



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